Chattanooga, TN – The Kelly administration has officially presented its proposed Fiscal Year 2025–2026 budget to the Chattanooga City Council, outlining a balanced plan that targets key city priorities while accounting for economic challenges. The proposed budget includes significant investments in infrastructure, public safety, affordable housing, and transit, while implementing cost-saving strategies to address the impacts of inflation and the expiration of federal pandemic relief funding.

Mayor Tim Kelly emphasized the city’s long-term commitment to progress in his budget message, stating, “Since coming into office, my core focus has been tackling Chattanooga’s structural challenges and setting our city on a path toward shared prosperity and common purpose — and that commitment remains as strong as ever.”

He added that the city’s reorganization around resident priorities and the One Chattanooga roadmap continue to shape the administration’s approach. “We continue to have a strong foundation for progress. I’m proud to continue building on that foundation with this budget,” Kelly wrote.

Key highlights of the proposed budget include:

  • Public safety and public works: 59% of the total budget is allocated to police, fire, and public works services, reinforcing the city’s commitment to meeting essential community needs.

  • Road improvements: For the fifth consecutive year, the budget earmarks at least $10 million to enhance local roadways.

  • Affordable housing: A $2 million investment is planned to preserve existing affordable housing throughout Chattanooga.

  • City workforce compensation: The proposal includes cost-of-living and step increases for non-sworn city employees.

  • Transit infrastructure: $10 million is set aside for public transit capital and operational investments.

  • Neighborhood development: Funds will support major developments such as the South Broad and One Westside projects, which aim to create new downtown neighborhoods.

  • Traffic light modernization: $150,000 is proposed for a traffic signal system upgrade to improve timing and efficiency.

  • Bridge replacement: The budget fully funds the city’s $5.1 million share of the Wilcox Bridge replacement.

  • Early education: More than $1 million is allocated for early learning centers to support young children and working families.

Adjusted for inflation, the proposed budget is lower than Chattanooga’s budget from two years ago, reflecting the administration’s efforts to maintain fiscal responsibility while investing in the city’s long-term future. The City Council will now review and deliberate on the budget ahead of final approval.