CHATTANOOGA, TN (August 21, 2025) - A public hearing will be held on
Tuesday, August 26, on Councilmember Chip Henderson’s 1.69 property tax
rate proposal before Council takes its first vote on setting a new tax
rate. Henderson has declined to discuss the impacts of the cuts to city
services in his proposal, but the Kelly Administration feels it’s important
for Chattanoogans to know what’s at stake before City Council votes.
“Councilmember Henderson’s slash-and-burn plan is the worst of both worlds;
it makes painful cuts to city services and would still result in a
significant increase in property tax bills,” said Eric Holl, senior advisor
to Mayor Tim Kelly. “The Kelly administration does not believe it is
responsible to cut road paving, 311, violence prevention and the new fire
company that would serve East Brainerd. We are asking Council to support
Mayor Kelly’s compromise 1.93 plan, which raises enough revenue to combat
the rampant inflation since Mayor Kelly took office in 2021 while still
funding critical services.”
Henderson’s proposal mandates mid-year budget cuts to city departments,
which could result in the following impacts to services:
- Layoffs across departments with insufficient funding to support current
staff levels. - A scale-down of 311 and Constituent Services, preventing residents from
easily reporting potholes and clogged drains, or requesting brush pick-up,
for example. - Defunding the expansion of the 423 Chain Breakers Violence Interruption
Program, which has helped drive historic crime reduction
<https://www.local3news.com/local-news/local-group-called-the-423-chain-breakers-curb-east-chattanooga-crime-down-12/article_dfb982c6-e1a5-11ee-8d17-f7e3427f7d9b.html>
in our community. - Not hiring needed technology staff to execute the very strategy approved
in the FY26 Budget to protect Chattanooga from cyber attacks, exposing the
City to dangerous ransomware threats, and putting your vulnerable personal
data at risk. - Elimination of accounting and internal auditing staff, undermining the
City’s fiscal stability and that could result in waste, fraud, cost
overruns – or the need for more cuts or tax increases to combat future
deficits. - Cuts to job training programs that help reduce crime and empower
Chattanoogans to escape poverty.
Chattanoogans overwhelmingly
<https://x.com/wdefnews12/status/1957910632092602866> spoke in favor of
Mayor Kelly’s 1.93 compromise proposal at Tuesday’s budget hearing. Here
are a few of the things Henderson wants to cut from Mayor Kelly’s 1.93
compromise proposal:
- Cuts $7.5 million for road paving, so we fall further behind on our
paving backlog as our streets degrade - Leaves Chattanoogans in East Brainerd at heightened fire risk by
eliminating funding for the Chattanooga Fire Department’s Station 21, a new
fire company that CFD has been requesting for years to eliminate a
15-minute gap in fire response in the area - Increases homelessness by slashing funding for eviction prevention and
affordable housing, pushing more working Chattanoogans out of the city. - Places Chattanooga’s families at risk by eliminating $2 million in
funding to address the backlog of maintenance in our parks.
Despite making all of those painful cuts, Councilman Henderson’s proposal
still raises the median property tax bill by $216 per year.
Under Mayor Kelly’s proposal, the total state and local tax burden in
Chattanooga would still rank among the very lowest in the nation, with our
operating budget per resident lower than any of Tennessee’s major cities,
except Memphis.
The 1.93 proposal is measured, reasonable, and affordable, while
Henderson’s proposal is reckless and irresponsible.