City of Chattanooga ponders tax breaks

The City Council unanimously approved a resolution Tuesday night to assess tax break programs on an individual basis until the Chattanooga Area Chamber of Commerce completes a study on how other municipalities handle tax incentives.

The city backtracked from a previous resolution set forth that called for a moratorium on payment in lieu of tax, or PILOT, programs.

"Let's take on each as an individual," said Dan Johnson, chief of staff for Mayor Ron Littlefield.

Some council members said this week the current formula for PILOTS is unfair to the city. Job creation tax breaks requires some money to be spent on education, but no property tax money flows to the city or county general funds.

Council members said that is problematic because the city provides fire and police protection to those industries or businesses getting the breaks.

Daisy Madison, the city's chief financial officer, said the time has come for city tax breaks to be re-evaluated.

"Our tax base is not growing enough to continuously support them," she said.

Chamber officials were present at the council's regularly scheduled business meeting and said a study of the tax breaks and suggestions for different formulas could be ready by next spring.

"We're not at odds over this," said Ron Harr, president and CEO of the Chamber. "We agree we should look at it."

Contact staff writer Cliff Hightower at chightower@timesfreepress.com or 423-757-6480. Follow him at twitter.com/cliffhightower or facebook.com/cliff.hightower.