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Clarksville Mayor Pitts proposes tax increase, hike in commercial building permits

The Clarksville City Council is set to cast first vote on the budget June 20



Clarksville City Hall. CHERI REEVES

As the Clarksville City Council prepares its vote on the Fiscal Year 2025 Budget, Clarksville Mayor Joe Pitts said Fiscal Year 2024 has been unlike any year he has seen in his years in office.

The mayor has proposed a tax increase for the city, but has not said how much that increase will be.

Late Monday afternoon, City Chief Financial Officer Laurie Matta received the unofficial draft property tax rate from the Montgomery County Property Assessor’s Office.

“As we work through the verification process, we will have the final certified property tax rate soon,” Matta said. 

In a recorded news release, Mayor Pitts detailed some of the struggles preparing this year’s budget.

“The hangover from the pandemic includes record inflation and a salary and wage competition that has us laser-focused on pay, just to keep pace with the market and region to recruit and retain our workforce,” Pitts said. “Those two items alone are heavily influencing our budget for Fiscal Year 2025.”

The third factor is the impact of the state-mandated countywide revaluation of property that occurs every five years.

Since the 2019 revaluation, the City of Clarksville has experienced tremendous growth, yielding some of the highest property values to date.

The City of Clarksville FY2025 Budget calls for a proposed increase in permitting fees for commercial building projects only. CHART IS COURTESY OF CITY OF CLARKSVILLE

Pitts said the higher property values have presented the city with, “a fierce headwind” going into setting the city’s certified tax rate for the year.

“Despite popular belief, this process is revenue neutral, meaning municipalities do not gain any additional tax revenue in this reappraisal,” Pitts said. “The budget proposal is based on modest tax rate adjustments and an increase in permitting fees for commercial building projects only.”

Pitts said the city will not be increasing residential permitting fees.

“We are proposing a property tax increase and an increase in the commercial building permit fees, primarily to fund public safety departments,” Pitts said. “As our city continues on a torrid pace of growth, public safety, including codes enforcement and abatement, is a top priority in this proposal.”

The budget includes:

  • A property tax increase
  • An increase in commercial building permit fees  
  • A 5% raise for city employees
  • A limit to the number of new positions
  • A curtailing of new capital projects in all departments except the street department

Pitts said the city has worked hard to present a budget that is balanced and maintains a healthy fund balance that meets the needs of policy, invests in the workforce and reflects the diverse set of priorities within the city.

Matta presented the proposed budget to the Clarksville City Council in a workshop on Thursday, June 6.

She said budgeted expenditures in the General Fund will total $160,067,087 in Fiscal Year 2025.

Matta said when the city began working with departments, with a shortfall in the budget, it requested the departments reduce funds in their operating expenses, including any new hire requests that would not impact operations.

“We went from 43 new hire requests down to 22,” Matta said. “Departments cut nearly $9.7 million from their budgets.”

Matta said with such deep cuts from the departments, the other funded entities would need to operate with the same budget as the previous year.

“At that point, we felt there was nothing else we could cut without reducing services,” Matta said. “That’s when the tough decision had to be made to not accept the Certified Tax Rate.”

22 New Hires proposed for FY2025:

3 with Clarksville Fire Rescue

12 with Clarksville Police

3 with Building & Codes

1 in Finance & Revenue (changing a part-time position to full-time)

1 in I.T.

1 in Human Resources – security

1 Street Department

Clarksville Gas & Water and CDE are both requesting nine new positions in the revenues they generate.

At the close of the workshop, Mayor Pitts said this year’s budget has been one of the most difficult budgets the city has faced in his years as mayor.  

“With revenues flat, our departments have really stepped up,” Pitts said. He thanked the department heads for helping. “We’ll be a better city for it.”

After receiving the Certified Tax Rate on Monday, Pitts decided on Tuesday to amend the times for the budget readings before city council, which had been scheduled to begin this week.

The first reading of the budget is now scheduled for Thursday, June 20 at 4:30 p.m. in the Clarksville City Council chambers. The anticipated second reading and final vote has been moved to Tuesday, June 25 at 4:30 p.m.

Fiscal Year 2025 begins July 1.