Revenue loss predicted in Chattanooga’s financial future

CHATTANOOGA, Tenn. (WDEF) – The city was supposed see growth then came the COVID-19 pandemic and destructive storms.

Now, Chattanooga is grappling with shortcomings in an 8.4 million dollar reduction in projected revenue compared to last year.

“Our unanticipated expenses are rising and our revenues from sales tax, fees and other taxes are declining, and it’s budget time,” COO Maura Sullivan said.

The Mayor’s administration presents a FY2021 budget to city council members on Tuesday.

It’s one with no tax increase, employee layoffs or salary cuts.

“The big reason that we’re able to do this to present this type of budget to you, even though other cities across the country are facing large layoffs and property tax increases this year, it’s because our city was in excellent fiscal health prior to this crisis,” Sullivan said.

But, the budget does reduce agency funding by 2 percent, freezes hiring and employee salaries and postpones ladder increases for fire and police officials for one year.

“Challenging times call for hard choices and we’ve made the choices that were needed to balance our budget,” Sullivan said.

City officials are expecting all major sources of revenue to be down including state and local sales tax revenue.

“Sales tax shows a loss of 6 million dollars or 8.9 percent due to the pandemic. Our second largest source of revenue, we are suffering a 6 million dollar loss,” CFO Daisy Madison said.

Chattanooga City Council Members are planning to “dive deeper” in specific areas of the proposed budget before taking a vote later on.