CLARKSVILLE, TN (CLARKSVILLE NOW) – The City of Clarksville has released a proposed fiscal year 2026-27 budget, and it includes a 31-cent property tax increase.
The city has proposed to increase the property tax rate to $1.23 per $100 of assessed value, after a 4-cent tax rate increase during the last budget cycle. In a letter to the City Council, Mayor Joe Pitts said that growth, inflation and the critical need to support city government operations are contributing factors to the 31-cent increase.
“This is the final budget that I will deliver to you as mayor, and it is by far the most difficult during my nearly eight-year tenure. In keeping with my tradition, however, I want to begin by commending our city departments and their leaders for their work, during what can only be described as a year of challenge and opportunity,” said Pitts in his letter, sent to the council Friday afternoon.
“I am not minimizing the impact of this increase on our citizens, but the Montgomery County Trustee implements the state property tax freeze and relief programs for low-income or disabled residents,” he said, referring to a program that excludes those needy residents from tax increases.
The current rate is 92 cents per $100 of assessed value. A 31-cent increase to $1.23 is a 33.7% increase in property taxes.
$187.8 million general fund budget, capital projects put on hold
Going into the new fiscal year, the proposed budget is made up of $187.8 million for the general fund.
Pitts said based on the guidance of city Chief Financial Officer Christen Wilcox and Deputy CFO Regina Hampton, the city is taking a “hard, but realistic view of” capital projects as they look to implement a 10-year planning cycle instead of the current five-year approach.
“A 10-year plan gives the city and our bond underwriters a more-realistic view of when projects can be started based on the debt load and subsequent debt service in our annual budget,” said Pitts.
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Within the proposed fiscal year budget, while there are several capital projects requested, these projects, along with many of the already planned projects, will be and have been suspended, said Pitts in his letter.
“Until we stabilize our financial situation, we cannot absorb additional costs associated with the overall improvements,” he said. “You will notice these changes in the aforementioned 10-year Capital Improvement Plan (CIP). We will make some necessary repairs to existing buildings, but we will not launch any new projects until our financial condition improves.”
Two high-profile City projects in the pipeline are the sports/athletic complex at Exit 8, the Performing Arts Center downtown. Clarksville Now has reached out to the city on which specific projects are being put on hold.
On starting pay for firefighters, police officers
As part of the proposed fiscal year budget, Pitts said city departments worked hard to address the issue involving starting pay for new firefighters, as well as police officers.
“We made changes that were recently reported to you, but we knew it would put considerable upward pressure on our budget since payroll is a recurring expense,” Pitts said in the letter to the council. “Bottom line, you wanted us to address the disparity and we made that change. This is a significant part of why we need additional revenue to keep pace with wages,” said Pitts.
An overall 3% general wage increase for all city employees has also been proposed, which would take effect January 2027. “We must continue investing in our employees or we will face the very real issue of increasing vacancies across every department, especially in our police and fire rescue departments,” Pitts said.
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He said one important change is the unavoidable increase in health insurance contributions to the city’s health fund, which will be absorbed by the City of Clarksville. “We continue to make changes to our health insurance plans, to contribute to the health and well-being of our employee family.”
Looking to recapture some sales tax from CMCSS
Pitts said the City is looking to recapture some of the sales tax collected, beyond what the state requires, that is paid by the City to CMCSS, which is estimated at around $3 million annually.
Clarksville Now has reached out to the City on the specific amount proposed.
“This will help offset the cost of some of the services we are providing, including crossing guards, installation of sidewalks, and other infrastructure improvements. This is, without a doubt, the most difficult part of this budget,” said Pitts.
“Property tax revenue comprises less than one-third of the revenue for our city. Sales & Use taxes and state-shared revenues account for the next two-largest segments of budget income. While Sales and Use taxes are steady, the state of Tennessee has projected slow-to-no growth of this important revenue stream for the city, having a dramatic impact on our operations.”
Pitts said the City of Clarksville has worked hard to present a budget proposal that is balanced, maintains a healthy, but realistic fund balance that meets their tried-and-true policy, invests in their workforce, and that reflects their best effort to serve and support stakeholders.
“This is a difficult budget proposal that will require some hard choices. I look forward to working with you on the passage of this budget, and planning for a brighter future for all in our city,” said Pitts in his letter.
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