Chattanooga, TN – On July 29, 2025, the Kelly Administration introduced a supplemental budget proposal that aims to significantly raise pay for Chattanooga’s police officers and firefighters while cutting the city’s property tax rate from $2.25 to $1.99 per $100 of assessed valuation. The plan also accounts for 22.5% inflation since the city’s last revenue adjustment in 2021.

If approved, the proposal would mark the largest property tax rate reduction in Chattanooga in decades. Residential properties are assessed at 25% of appraised value, while commercial properties are assessed at 40%.

“This is a balanced proposal that funds police and fire pay raises and critical government services like road paving while making a historic cut to the property tax rate,” said Mayor Tim Kelly. “We have a generational opportunity to ensure Chattanooga is the city of its full potential—a city with safe neighborhoods, good roads, and the best quality of life. If we fail to act accordingly, we will lose our great momentum and fall further behind.”

City officials stressed the urgency of the situation during a recent City Council education session, where leadership from both the Chattanooga Police and Fire Departments highlighted growing recruitment and retention challenges tied to uncompetitive pay.

Police Chief John Chambers said he recently received a resignation letter from an officer leaving CPD for better pay elsewhere. “I know from speaking with our officers that many more will do the same if we don’t significantly increase pay now,” Chambers said. “Our officers love Chattanooga, and love serving the people of our city. But they have to be able to provide for themselves and their families.”

Chattanooga Fire Chief Terry Knowles, whose appointment is still pending City Council confirmation, also expressed gratitude for the proposal. “Being a firefighter is one of the toughest jobs there is, but our men and women are struggling just to make ends meet,” Knowles said. “As more of our most experienced firefighters reach retirement age, we are at serious risk of losing our ability to adequately protect Chattanooga. I don’t want the day to come where we have to start figuring out which fire stations to close on which days because we don’t have the staffing.”

The proposed supplemental budget now awaits City Council approval.