Council sponsors set alternate FY26 budget to fund fire and police raises, propose 1.69 tax rate

An ad hoc committee of the Chattanooga City Council met to draft an alternate FY26 amended budget that would combine departmental cuts and frozen vacancies with a modest property tax increase to fund fire and police pay raises.

Councilman Henderson, who called the meeting to order, said the goal was "to find some cuts or reallocations from the budget while considering a modest tax increase in order to find a much needed fire police pay raise." He and Councilman Davis are the amendment—s sponsor and co-sponsor.

The alternate version the sponsors described would protect core operational departments from cuts (fire, police, public works, parks), restore community development and early-learning funding, and propose an effective tax rate of 1.69 (referred to throughout the meeting as "1.69"). Councilwoman Hill, who prepared a detailed worksheet for the ad hoc group, told members she had identified roughly $18 million in budgeted but unfilled city positions and reduced that list to about $3.9 million of vacancies she recommended as potential freezes or reallocations.

Nut graf: Sponsors said the combination of targeted cuts, vacancy freezes and a modest tax increase would move the council roughly halfway toward the total cost of the pay plan for fire and police the administration has requested. Hill estimated the reductions she proposed total about $10.1 million; adding the tax increase to the same package would generate roughly $15 million, which the sponsors said would cover the first-year funding need and leave a small cushion for reinstating some line items or adding priorities such as information-technology and executive-branch positions.

Discussion and specifics

Council members debated the mechanics and consequences of percentage-based, department-level cuts versus line-item reductions. Councilwoman Dotley and other members pressed for line-item detail, arguing that blanket percentage reductions make it impossible to describe the concrete operational impacts for individual districts and programs such as community centers, Head Start partnerships, and the Family Justice Center. Dotley said she chairs Community Development and objected that her committee was not consulted before cuts were proposed.

Hill said her worksheet showed how numbers were derived and that some reductions were aimed at underperforming programs or unfilled roles. She told the committee she worked with Chief Financial Officer Weston Porter to identify "untouchable" items such as debt service and grant commitments and that the council had previously set aside $5,000,000 to help reach a midpoint on raises. Hill said her recommended cuts plus the council—s $5 million commitment produced about $10.1 million in reductions.

Henderson and Hill described the alternate package as: restore community development funding (about $1.6 million restored), restore early-learning funding (about $167,000), and divide the remaining unallocated funds (roughly $368,000) between the mayor—s office (executive branch) and information technology. The sponsors said fire and police would receive the pay increases in the alternate version.

Vacancies and layoffs

Hill and Henderson repeatedly emphasized that the vacancy list shows positions that are budgeted but currently unfilled; their proposal is to freeze or reallocate the budget for some of those positions rather than cause immediate layoffs. Hill said the administration highlighted a subset of vacancies that were actively being filled (shown in yellow on the worksheet) and that the spreadsheet was intended to show scope and options, not to specify which employees would be laid off.

Tax-rate options and longer-term questions

Council members discussed several tax-rate scenarios and multi-year approaches. The group referenced earlier figures discussed in public sessions including $1.67 and $1.99 as alternatives; multiple members said they would prefer a more modest immediate increase to avoid repeating similar increases in future years. One council member proposed a plan to secure funding for fire and police for multiple years to reduce the likelihood of additional increases in subsequent budgets.

Process, legal guidance and next steps

The city attorney advised the group on legal requirements for amendments and appropriations, referencing Ordinance No. 14239 (first reading June 3; second reading June 10) and provisions of the city charter about how the council must appropriate amounts and how the mayor must propose amendments if receipts fall short. The attorney noted deadlines for publishing rates and distributing tax bills and stressed that revenues and expenditures must be balanced in any amendment.

Outcome and administration follow-up

The sponsor and co-sponsor said they would place the alternate version on the council agenda (the package as described above, with the 1.69 tax-rate proposal and the restorations to community development and early learning). No formal roll-call vote was taken at the ad hoc meeting; sponsors characterized the decision as setting an alternate version to be debated in public meeting. The updated worksheet will be revised and sent to council members and the administration for review.

Ending

Members agreed to reconvene for the public hearing and additional budget sessions on the council calendar. The sponsors asked the administration to review the amended worksheet and provide operational feedback before the item is formally placed on a public agenda.