City Council members voted 8-1 on first reading on Tuesday night to approve the upcoming fiscal year budget that includes a 22-cent property tax increase above the new certified tax rate.
At the same time, a senior tax freeze program will be offered to qualified applicants.
Councilman Chip Henderson, who chaired the budget committee, cast the only no vote.
In favor were Carol Berz, Russell Gilbert, Demetrus Coonrod, Ken Smith, Anthony Byrd, Darrin Ledford, Jerry Mitchell and Erskine Oglesby.
The city tax rate was at $2.3090 per $100 of assessed valuation.
The new certified rate after the reappraisal is $2.0573 per $100 of assessed valuation.
The new budget sets a tax rate of $2.277 per $100 of assessed valuation.
Officials said the budget includes $5 million for road improvements, "competitive pay" for city employees, a career pay plan for sworn officers, salary help for Head Start workers, and an expanded Baby University.
Officials said the budget "is focused on building a stronger, safer Chattanooga.
Based on community priorities, Mayor Andy Berke’s FY2018 Budget invests in safety, economic growth, strong neighborhoods, student and family stability, and government efficiency."
“Our investments are leading to a growing prosperity and quality of life,” said Mayor Andy Berke. “This budget makes key investments in safety, families, neighborhoods, and our economy, which will continue to move Chattanooga forward.
“Our senior citizens, when faced with rising costs of an improving economy, should not have to worry about where they are going to live out the best years of their life. Thanks to the leadership of City Council, we can provide an opportunity to help senior citizens in our community.”
Daisy Madison, chief financial officer, said, “Rising costs is one of the significant budget challenges we addressed this year, which also included growing benefits costs, revenue reductions, and reallocations. But with the mayor’s vision, dedicated city staff, and engaged council members, we have finalized a budget that invests in our people, Chattanooga’s neighborhoods, and our youth.”
City officials said the budget "funds key initiatives to increase safety across Chattanooga by using technology and additional dedicated officers to get illegal guns off the city’s streets. It invests in removing blight from neighborhoods by cleaning up brownfields, and supports small businesses through an effective loan program.
"Continuing the success of programs like Baby University, this budget recognizes the importance of early learning initiatives and investing in Head Start teachers. It also focuses on Chattanooga’s safety by improving the pay scale so that the city can recruit and retain quality officers to protect and serve the community.
"Recognizing the importance of infrastructure and safe roads to the wellbeing of businesses and citizens, Mayor Berke proposed the largest amount yet for paving in this budget. To maintain the roads, the budget sets aside a record $5 million for paving and street improvements, almost tripling the amount from five years ago.
The council is scheduled to vote a final time on the FY2018 budget next Tuesday night.
Chairman Mitchell noted that an increase of up to $15 million in the new budget related to salaries, benefits and pensions could not be sustained. "We cannot keep that up next year."
Council members said a committee will be formed to look into steps to curb costs related to that item.
Councilman Byrd, a new member of the council, said there were some items in the budget he would not include. But he said, "We will not get a 100 percent perfect budget."
Councilman Ledford, who is also new to the council, said, "There is a lot of hope in this budget. There is a lot of forward thinking. It is pretty bold in moving our city forward."
Ms. Madison said the senior tax freeze applies to those 65 or older with an income not exceeding $38,720.
The property must be their principal residence.
They must reapply each year.
If approved, the property tax rate would be frozen at the rate for the year they first qualified for the program.
Ms. Madison said it appears the program would cause about $30,500 in lost revenue per one-cent of tax increase.
She said other projected city costs would be $30,000 for a part-time clerk and $10,000 for supplies.
For more information on the budget, visit budget.chattanooga.gov.