The City Council is weighing whether or not to approve a property tax increase above the new certified tax rate - as it did in 2021 - to raise pay for sworn firefighters and police.
In that last reappraisal year, the council unanimously approved a 40-cent property tax increase above the new rate that has just been certified. That increase raised some $30 million in new income dedicated mainly to improving the pay of fire, police, public works and other city employees.
Since then a gap has grown between sworn officers and civilian ones, Kevin Roig, Mayor Tim Kelly's chief of staff, said. The gap is 30 percent on the fire side and 20 percent on the police side.
He said $18.5 million in additional income is needed to cover the gap.
Civilian fire and police are included in three percent raises under the Kelly budget presented recently to the council, but there was not enough revenue to fund the sworn side, officials said.
Chief of Staff Roig is not recommending that the council pass a "continuing resolution" and deal with the entire budget at a later date. He said the Comptroller's Office advised that a budget needs to be approved by the end of August or the city would risk lowering of its bond rate.
He is recommending that the council approve the budget that was just presented, then begin working with the administration on solving the sworn pay issue.
Mr. Roig said, "It would be more prudent to go ahead and pass a budget now. It would be very difficult to come up with the kind of savings we need" (prior to the end of August). He said the council could always amend the budget.
He said "a guiding principle" of the search for the extra funds would be "not to RIF (lay off) people."
Also, he said officials are seeking a solution "that minimally affects the taxpayers." He added, "I know this is going to be difficult." He said the administration is loath to cut a number of budget improvements that were made.
Mr. Roig said, "Ordinarily, at this time we would be spiking the ball and saying No Tax Increase." But he noted that the sworn fire and police pay issue looms.
Councilman Cody Harvey said, "This is a very important decision for the taxpayers. On the one hand, we don't want to put this on the taxpayers. On the other hand, our fire and police have a tough job and deserve all we can give them."
He added, "I would like to see proposals that don't put it on the taxpayers. Let's do everything we can to take a good, hard look" (not to have to do that."
Mr. Roig said, "It would be easy to put it all on the taxpayers. We're not going to do that. We want to minimize the effect on the taxpayers."
He said, "Let's pass this budget, then go to work" to find a way to fund the sworn fire and police pay.
Chair Jenny Hill noted that some residents of her District 2 have seen their reappraisals go up 143 percent.
Mr. Roig said the city this year had a growth rate of 2.59 percent that yielded $8.75 million in new revenue.
In a reappraisal year, governments in Tennessee are required to change the property tax rate (certified tax rate) to ensure the amount of total taxes collected remain the same after a reappraisal, even if the combined value of all property in the county rose or fell following the reappraisal.