Chattanooga, August 6, 2025
News Summary
Chattanooga Mayor Tim Kelly proposes a major reduction in the property tax rate from $2.25 to $1.99 per $100 of assessed valuation while also increasing salaries for first responders. This plan aims to raise an additional $50 million in revenue to enhance compensation for police and firefighters. Concerns rise as current salaries are significantly lower than competing agencies, leading to retention challenges. The proposal also highlights the financial impact for homeowners and the importance of balancing municipal funding with homeowner responsibilities.
Chattanooga Mayor Tim Kelly has introduced a supplemental budget proposing a significant decrease in the property tax rate alongside pay increases for first responders. The suggested change would lower the property tax rate from $2.25 to $1.99 per $100 of assessed valuation, marking the largest reduction in Chattanooga’s property tax rate in decades. This measure is expected to generate an additional $50 million in revenue, which aims to enhance salaries for police officers and firefighters in the city.
Currently, Chattanooga police officers start earning $45,000 per year, while firefighters receive a starting salary of $43,000. According to Mayor Kelly’s administration, these figures are substantially lower than salaries offered by competing agencies, leading to significant retention challenges. City Council members have voiced their concerns about potential staffing shortages in both departments unless wages are increased, particularly after witnessing a recent resignation of a police officer attributed to the low pay scale.
The property tax rates in Chattanooga are assessed differently for residential and commercial properties. Residential properties are taxed at 25% of their appraised value, while commercial properties are assessed at 40%. The proposed tax rate adjustment aims to alleviate the pressure of inflation while enabling the city to maintain critical services like road maintenance.
Should the proposed tax rate be accepted, homeowners with an average house valued at $400,000 could see an approximate increase of $440 annually in property taxes. This potential increase in financial responsibility has sparked discussions among residents regarding the balance between supporting municipal funding for essential public safety services and the burden placed upon property owners.
Police Chief John Chambers has emphasized the urgency of increasing wages to retain dedicated officers who are committed to serving the Chattanooga community. Likewise, Fire Chief Terry Knowles has expressed concerns about firefighters’ challenges to make ends meet, indicating a threat of losing seasoned personnel as many begin to retire. This context of compensation and retention highlights the critical decision facing city officials as they navigate the proposed tax rate decrease and budget increase for first responders.
In summary, Mayor Kelly’s plan encompasses a strategic effort to improve the salaries of first responders while simultaneously reducing the property tax rate, aiming to strike a balance between fiscal responsibility and public safety needs.
FAQ
What is the proposed property tax rate change in Chattanooga?
Mayor Tim Kelly has proposed reducing the property tax rate from $2.25 to $1.99 per $100 of assessed valuation, which would represent the largest decrease in decades.
How will the proposed budget affect first responders’ salaries?
The proposed budget aims to increase salaries for police officers and firefighters due to their current pay lagging behind competing agencies.
What financial impact could homeowners expect from the proposed tax rate?
Homeowners with a $400,000 house could see an increase of approximately $440 per year in property taxes if the new rate is implemented.
Why are pay raises for first responders necessary?
The need for pay raises is driven by significant wage discrepancies compared to competing agencies, which has contributed to retention issues and staffing shortages in the police and fire departments.
Chart of Key Features
| Feature | Details |
|---|---|
| Proposed Property Tax Rate | $2.25 to $1.99 per $100 assessed valuation |
| Projected Revenue Increase | $50 million |
| Starting Salary – Police | $45,000 per year |
| Starting Salary – Firefighters | $43,000 per year |
| Impact on Homeowner with $400,000 House | Approximate increase of $440 annually |
Deeper Dive: News & Info About This Topic
HERE Resources
Chattanooga’s Proposed Budget Aims for Police and Fire Pay Raises
Chattanooga Proposes Property Tax Rate Increase for Public Safety Raises
Chattanooga Sees $14 Billion Increase in Property Value
Chattanooga’s Housing Market Faces Unpermitted Construction Issues
Tensions Rise Over Hamilton County School Funding
Hamilton County Announces Significant Property Tax Rate Reduction
Chattanooga Companies to Receive Over $10,000 in Tax Refunds
Major Real Estate Transactions in Hamilton County
Chattanooga City Takes Big Steps Towards Affordable Housing
Chattanooga City Council Votes on Revamped PILOT Program
Additional Resources
- Times Free Press: Chattanooga Mayor’s Proposed Tax Rate
- Wikipedia: Chattanooga
- Local 3 News: Mayor Kelly Proposes Raises
- Google Search: Chattanooga property tax
- Chattanooga Pulse: City Budget Proposal
- Google Scholar: Chattanooga property tax proposals
- Local 3 News: Tim Kelly’s Tax Proposal
- Encyclopedia Britannica: Chattanooga
- Times Free Press: City Council Spars Over Property Tax
- Google News: Chattanooga budget 2025
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.
