Franklin approves $243.3 million FY2026 budget, sets property tax at 32¢ and raises hotel tax to 5%

The Franklin Board of Mayor and Aldermen on Tuesday approved a $243.3 million budget for fiscal 2026, voted to levy municipal property taxes at 32 cents per $100 of assessed value and increased the hotel-occupancy tax from 4% to 5%.

Chief Budget and Performance Officer Michael Walters Young told the board the proposed budget is balanced and available online, and described the total as "The budget itself is $243,300,000 across all funds," while outlining a recommended property-tax structure that dedicates most of the certified rate to existing operations and designates new capacity for capital projects and public safety.

Why it matters: The board's action uses capacity created by a 2025 county reappraisal that raised the city's assessed base to roughly $10.75 billion. The board's decision to set the rate at 32 cents funds a new capital program called Invest Franklin 2 — including the city's $50 million commitment to a partnership for widening Mack Hatcher Southeast with the Tennessee Department of Transportation — and adds smaller operational and public-safety enhancements.

Budget and tax details The FY26 budget totals $243.3 million; the general fund is $128.1 million. Staff described the property-tax recommendation as three parts: a revised certified baseline of 23.1 cents per $100 of assessed value (adjusted after reappraisal), 6.8 cents dedicated to Invest Franklin 2 capital projects (including the Mack Hatcher Southeast match), and 2.1 cents for city operations, primarily public safety. The administration also proposed raising the hotel-occupancy tax from 4% to 5% to fund parks and tourism-related projects; the increase would take effect January 1 if final approvals and legal checks are completed.

Board debate and votes The property-tax proposal prompted several hours of discussion among aldermen about timing, project receipts and whether to collect the full Invest Franklin 2 amount now or a smaller increment and return to voters later. Resident David Lurie urged caution, saying, "What am I gonna actually have to pay in taxes?"

After debate, the board approved the FY26 budget ordinance (Ordinance 2025-13) unanimously. The municipal tax levy ordinance (Ordinance 2025-14) setting the property-tax rate at 32 cents passed 5-3. The recorded yes votes were Aldermen Barnhill, Blanton, Peterson, Brown and Vice Mayor Potts; Aldermen Caesar, Burger and Baggett voted no. The hotel-occupancy tax ordinance (Ordinance 2025-15) increasing the rate to 5% passed (tally recorded in the minutes: passed 7-1).

Other fiscal items approved - Final amendment to FY25 budget (Ordinance 2025-12), approved unanimously; staff described $3,885,838 in general-fund revenue and expense changes and transfers across multiple funds to maintain required year-end balances. Key moves included a $1.5 million personnel funding adjustment and a $1.5 million transfer into the stormwater fund. - Water and sewer fee updates for 2026'28 (Ordinance 2025-09), approved unanimously; those rate changes are scheduled to take effect January 1 as previously read.

Board and staff comments Mayor Ken Moore and multiple aldermen framed the actions as investments in traffic and infrastructure and public safety, with proponents saying the full Invest Franklin 2 capacity positions the city for state partnership funding and for delivering spot improvements where needed. Several aldermen argued for a more incremental approach or asked staff for itemized "receipts" showing exactly which projects the new revenue will pay for; others countered that holding capacity now strengthens the city's negotiating position with TDOT and supports planned capital commitments.

What happens next The tax and budget ordinances will return for final readings per the city's standard process. The hotel-occupancy tax increase is slated to take effect January 1 if legal review confirms the city's authority and the board completes the remaining reading. Staff said they will continue work on priority capital projects and provide further detail on project-level spending and timing.

Votes at a glance - Ordinance 2025-12 (FY25 budget amendment): motion to approve; outcome: passed unanimously. - Ordinance 2025-13 (FY26 budget adoption): motion to approve; outcome: passed unanimously. - Ordinance 2025-14 (municipal tax levy for FY26): motion to set levy at 32 cents per $100 assessed valuation; outcome: passed 5-3 (Yes: Barnhill, Blanton, Peterson, Brown, Vice Mayor Potts; No: Caesar, Burger, Baggett). - Ordinance 2025-15 (increase hotel-occupancy tax from 4% to 5%): motion to approve; outcome: passed (tally in minutes recorded as 7-1). - Ordinance 2025-09 (water and sewer fee updates 2026-28): motion to approve; outcome: passed unanimously.

Sources and next steps Actions and votes recorded at the June 2025 Board of Mayor and Aldermen meeting. Staff said project-level funding and a five-year projection will be provided as the capital program is implemented; the board and administration reiterated they will return with additional detail to the public and the budget-and-finance committee as projects are prioritized.