Politics
Chattanooga Sales Tax Referendum Sets 2027 Collection Date for Road Projects
Voters in Hamilton County will decide the measure on November 3, with any approved tax increase taking effect January 1, 2027, and first project bids expected by mid-2028.
How we reported this
The Chattanooga sales tax referendum on the November 3 ballot asks Hamilton County residents to approve a one-cent increase dedicated to transportation infrastructure. The measure would raise the combined local rate from 2.25 percent to 3.25 percent on taxable purchases within the county.
The proposal arrives as the city faces a documented shortfall in road maintenance funding, according to the 2025 Chattanooga Public Works capital improvement plan. Federal highway dollars allocated to Tennessee have declined by 8 percent since 2023, leaving local governments to cover a larger share of resurfacing and bridge work.
When Residents Would See Changes
Tax collection would begin with the first sales reports filed after January 1, 2027. Motorists driving on US 27 and SR 153 would encounter construction zones starting in the second half of 2028, once the city completes environmental reviews and awards contracts. Property owners near planned bus rapid transit corridors on Brainerd Road could notice new stops and shelters by early 2029.
City budget documents project the increase would generate $48 million annually once fully implemented. Those funds are earmarked for 12 miles of pavement rehabilitation, two bridge replacements over South Chickamauga Creek, and the purchase of 15 new transit buses for Chattanooga Area Regional Transportation Authority routes.
Local businesses would remit the higher rate through their existing state sales tax filings, with the additional revenue transferred monthly to a dedicated Hamilton County transportation account. Residents would first notice the change on receipts for items such as groceries, vehicle repairs, and restaurant meals.
Remaining Steps in the Process
The Hamilton County Election Commission will mail sample ballots to registered voters by October 15. If the measure passes, the Chattanooga City Council must adopt an implementing ordinance by December 15 to lock in the January collection start. The first quarterly report on fund expenditures is scheduled for release in April 2028.