Chattanooga, Tennessee, August 16, 2025
News Summary
Chattanooga’s Mayor Tim Kelly has proposed a significant reduction in the property tax rate from $2.25 to $1.93 per $100 assessed value, marking the largest decrease in decades. This reduction aims to alleviate financial pressures due to inflation while ensuring funding for critical city services, including public safety and affordable housing initiatives. The proposal is expected to generate $44.8 million in revenue and will be discussed in a public hearing on August 19th.
Chattanooga, Tennessee – Chattanooga Mayor Tim Kelly’s office has announced a proposal to significantly reduce the city’s property tax rate from $2.25 to $1.93 per $100 of assessed value. This historic reduction is the largest in decades, aiming to address the financial pressures brought about by rising inflation and to secure necessary funding for essential services like public safety and community infrastructure.
The proposed tax rate is expected to generate approximately $44.8 million in revenue, which the city plans to use to protect local community centers, invest in affordable housing initiatives, and provide competitive salaries for its police and firefighters. Mayor Kelly’s proposal comes in the wake of recent historic rainfall and flooding, underscoring the city’s need for emergency services and robust infrastructure.
A public hearing to discuss the proposal will take place on Tuesday, August 19th. This meeting will allow citizens to voice their opinions and concerns before the final decision is made. The new tax structure has been meticulously designed to enhance public safety, as it includes funding for 15 new firefighting positions and a modern fire truck for Station 21 located in East Brainerd.
In addition to funding for the fire department, the budget proposal allocates $7.5 million towards paving projects and adds staffing to improve the city’s Public Works department. Moreover, it designates $5 million specifically for affordable housing and resources for eviction prevention, addressing a growing concern among residents facing housing insecurity.
The proposed decrease in property tax comes in light of a 22.5% inflation rate observed since the last adjustment in 2021. Mayor Kelly emphasizes the complexity of budget negotiations, aiming to balance the affordability for taxpayers against the rising costs of living. Despite this decrease, the average tax burden remains lower than rates in other major Tennessee cities like Knoxville, Nashville, and Memphis, translating to an estimated new cost of around $1.10 per household per day.
Furthermore, the proposal aims to rectify shortcomings from the previous administration regarding budget estimations. After a series of discussions and edits from the City Council, the final proposal reflects a commitment to responsible fiscal management. Adjustments include cutting unnecessary expenses, such as certain technology licenses, and reallocating funds to prioritize critical services.
If approved, the budget would also prioritize increasing starting salaries for police officers to $54,021 and firefighters to $50,421. This initiative seeks to attract and retain qualified personnel in critical public safety roles, reinforcing the city’s commitment to maintaining a well-staffed and equipped emergency service.
This significant property tax reduction proposal represents a proactive approach to local governance, aiming to provide economic relief for residents while ensuring vital community services are fully funded and operational.
FAQ Section
What is the proposed new property tax rate for Chattanooga?
The proposed new property tax rate is $1.93 per $100 of assessed value, down from the current rate of $2.25.
What will the revenue from the new tax rate be used for?
The revenue is expected to fund community centers, affordable housing, public safety salaries, and infrastructure projects.
When will the public hearing for the proposal take place?
A public hearing is scheduled for Tuesday, August 19th, where citizens can express their views on the proposal.
How does the proposed tax reduction compare to other Tennessee cities?
The proposed tax burden will remain lower than those in Knoxville, Nashville, and Memphis, with an estimated cost of about $1.10 per day for households.
What changes have been made to the budget process under Mayor Kelly?
The new proposal addresses previous budgeting errors and includes cuts to unnecessary expenses while reallocating funds to essential services.
Key Features Chart
| Feature | Details |
|---|---|
| Proposed Tax Rate | $1.93 per $100 assessed value |
| Current Tax Rate | $2.25 per $100 assessed value |
| Projected Revenue | $44.8 million |
| Funding for New Firefighters | 15 new positions and a new truck for Station 21 |
| Paving Projects Funding | $7.5 million |
| Affordable Housing Allocation | $5 million for housing and eviction prevention |
| Average Tax Cost per Household | Approximately $1.10 per day |
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Additional Resources
Author: STAFF HERE CHATTANOOGA WRITER
The CHATTANOOGA STAFF WRITER represents the experienced team at HEREChattanooga.com, your go-to source for actionable local news and information in Chattanooga, Hamilton County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Riverbend Festival, Chattanooga Oktoberfest, and Moon River Festival. Our coverage extends to key organizations like the Chattanooga Area Chamber of Commerce and United Way of Greater Chattanooga, plus leading businesses in manufacturing, insurance, and utilities that power the local economy such as Volkswagen Chattanooga, BlueCross BlueShield of Tennessee, and EPB. As part of the broader HERE network, including HEREBristol.com, HEREKnoxville.com, HEREMemphis.com, and HERENashville.com, we provide comprehensive, credible insights into Tennessee's dynamic landscape.
