Chattanooga council adopts 2025–26 budget, raises property tax rate to $1.93 after heated public hearing

The Chattanooga City Council on Aug. 26 adopted an amended fiscal-year 2025–26 budget that raises the city property tax rate to $1.93 per $100 of assessed value, following a public hearing with extended remarks from residents, labor groups and first-responder unions.

The council voted 5–4 to approve the mayor’s budget amendment after an alternative proposal from Councilman Henderson — which would have capped the rate at $1.69 and later was amended on the floor to $1.73 to add funding for Fire Station 21 — failed to gain a majority. Council members debated competing priorities including police and fire pay, fleet replacement and program cuts across departments.

Why it matters: Council and the public framed the vote as a tradeoff between bolstering pay and equipment for first responders, preserving public services such as 311 and community programs, and limiting a near-term tax increase for homeowners facing steep reappraisals. Mayor Kelly and administration officials argued that inflation and higher municipal procurement costs make the increase necessary to maintain service levels and recruit and retain personnel.

Councilman Henderson, sponsor of the alternate budget, told the hearing his plan would raise roughly $15 million per year at the proposed lower rate and combine that with $5 million set aside and approximately $3 million in departmental cuts to cover priorities. “This is a property tax increase,” Henderson said in his public presentation, adding the alternate plan was intended as a “first amendment to item 8a.”

Residents and organizations filled the council chamber for the hearing. Some speakers, including a number of…