The City Council voted 5-4 on Tuesday night in favor of a 38-cent property tax increase that was sought by Mayor Tim Kelly. The new rate will bring the city an additional $44.8 million.
In favor were Jenni Berz, Raquetta Dotley, Dennis Clark, Marvene Noel and Ron Elliott.
Opposed were Chip Henderson, Jeff Davis, Jenny Hill and Cody Harvey.
The new Chattanooga property tax rate will be $1.93 per $100 of assessed valuation. It was moved back to a $1.55 Certified Tax Rate after the recent reappraisal, which shot up values on many properties.
Narrowly voted down was an alternate budget by Councilman Henderson that would limit the increase to 14 cents. Councilman Harvey had amended the alternate budget by four cents to include over $4 million to cover the cost of personnel and a new ladder truck for Fire Station 21 in District 4. That brought the alternate tax proposal to 18 cents at $1.73.
The alternate budget included cutting 10 percent of the City Council budget $99,666), 10 percent from the mayor's budget ($771,898), and a five percent reduction from other city departments
Councilwoman Berz, who had been considered the swing vote, said she acted "because I believe it's the right thing to do, not because I've been pressured or intimidated."
She said she did so "though I'm not proud of the way this budget was presented to us." She stated, "We've got to do better. We've got to have full information."
Councilwoman Berz said she had been concerned that to act otherwise "we would be right back where we are now in nine months."
Councilman Henderson opened the budget session with a brief presentation in which he said his proposal would lessen the blow on home owners, and also there would be no cuts to the budgets of city departments. He said $9 million would go to police and $14 million to fire for higher pay.
He said under his plan city income would have gone from $345 million to $360,292,340.
Councilman Henderson said approving the smaller amount of tax increase would be favorable to seniors applying for a tax freeze.
Mayor Kelly told the council the city administration had faced "the worst spike in inflation in the last 40 years." He said inflation had added up to 22 percent since 2021, "and it is worse in the goods we buy."
Saying the cost to citizens would be a median $1 per day, he said, "You can't tell me that this is going to fill the streets with homeless people."
He added, "It's not a champagne budget. It's a Budweiser budget."
Mayor Kelly told the council, "We need you to pass it so we can continue to make Chattanooga the best city in America."
Councilman Henderson said the council did not hear requests related to police vehicles and Fire Station 21 until recently. He said, after the council agreed to set aside $5 million toward fire and police pay, that the city administration had pledged to seek to find a similar amount.
Kevin Roig, the mayor's chief of staff, told Councilman Henderson, "I do not appreciate you impugning my integrity by saying I told you a lie."
Councilman Henderson replied, "I never said you lied. You indicated you were going to find more savings, but you came back with more increases."
Mr. Roig told the council, "It's a good budget, Y'all."
Chair Jenny Hill told the council that "some relationships need to be rebuilt" between the council and the administration. "We can't do that if we are at loggerheads with one another."
She said, "Neither one of these budgets is a panacea."
Both, she said, "will affect the lives of people across Chattanooga."
Earlier in the afternoon, the council conducted a public hearing on the Henderson plan, getting pleas from both sides of the issue. Several speakers from fire and police urged approval of the Kelly budget.
Mayor Kelly said after the vote, “I want to thank the majority of City Council for voting in support of a plan that enables us to keep our momentum as we work to make Chattanooga the best city in America. Inflation since 2021 has taken a huge toll on our ability to fund crucial services. This new property tax rate, combined with the new property assessments, will allow us to keep our city safe and prosperous.”