Compromise plan includes Fire and Police pay raises, funding for new fire truck and staff, investments in road paving and affordable housing
CHATTANOOGA, TN (September 9, 2025) - Today, the Chattanooga City Council passed Mayor Tim Kelly’s 1.93 property tax rate and supplemental budget plan, giving final passage to the crucial government funding legislation.
The 1.93 property tax rate is the lowest ever under the city’s mayor-council form of government. Because of the historic increase in property values under this year’s county property tax assessment, the lower rate will still increase revenue by $44.8 million, with an increase to the median household’s property tax bill of $1.10 per day. This new funding will allow the city to keep pace with the 22.5% inflation since 2021, protecting community centers, investing in affordable housing and securing
more competitive wages for police and firefighters.
The supplemental budget will also:
- fund 15 new firefighting positions and a new fire truck for Station 21 in East Brainerd
- provide $7.5 million in additional funding for paving, moving up important projects that would otherwise go unfunded for years
- add staffing to improve the effectiveness of Public Works, boosting important efforts like road paving and traffic signal re-timing
- provide $5 million for affordable housing and eviction prevention resources for Chattanooga’s most vulnerable
“This was a difficult but necessary process, and we are now in position to catch up to the inflation that has hollowed out the buying power of our city budget since 2021,” said Mayor Tim Kelly. “I want to thank the City Council members who voted in favor of our proposal. Thanks to your courage, we’ll be able to fund the services that Chattanoogans expect from their government and, perhaps most importantly, give our police and firefighters the pay raises they need and deserve.”
Chattanooga’s property tax rate will remain lower than the tax rate for residents in Knoxville, Nashville and Memphis and would stay in line with Tennessee’s nationally-recognized low rate of taxation. Chattanooga’s tax burden per resident will also remain lower than Nashville and Knoxville’s.
