Chattanooga, TN – The Chattanooga City Council unanimously approved Mayor Tim Kelly’s fiscal year 2025-2026 budget, a plan designed to do more with less while sustaining key investments in public safety, infrastructure, and affordable housing.
Presented as the first budget of Mayor Kelly’s second term, the proposal accounts for the expiration of federal pandemic relief funds and addresses a 22% inflation rate since he took office in 2021. Despite financial challenges, the budget reflects a continued commitment to the city’s “One Chattanooga” vision.
“The first budget of my second term reflects a laser focus on delivering outcomes for residents, driving efficiencies in local government, and advancing the values of One Chattanooga,” Kelly said. “With unanimous support from the City Council, this budget meets today’s challenges and helps to shape a future that delivers on the promise and potential of our city for all Chattanoogans.”
Key highlights include the creation of an in-house construction inspector team within the Department of Public Works, aimed at reducing outsourcing costs. The budget, covering July 1, 2025, through June 30, 2026, dedicates resources to several priority areas.
More than $1 million is allocated to early learning centers to support educational access. The budget invests in infrastructure for the South Broad and One Westside developments, which will build new downtown neighborhoods. Two million dollars are dedicated to preserving existing affordable housing throughout the city.
For infrastructure improvements, the budget continues a five-year trend of investing at least $10 million in road repairs. An additional $150,000 is set aside for modernizing and re-timing traffic light systems. Ten million dollars will support public transit capital and operations, while $5.1 million is allocated for the city’s share of the Wilcox Bridge replacement project.
The budget also focuses on public health by supporting the transition of community centers into community resource hubs. Funding for Outdoor Chattanooga is increased, along with continued support for local sports programs.
To provide responsive and effective local government, 59% of the budget is directed toward police, fire, and public works to meet essential community needs. Support is also increased for garbage and recycling collection, refuse centers, and the compost waste facility. Non-sworn city employees will receive cost-of-living and step pay increases.
The budget reinforces Mayor Kelly’s commitment to fiscal responsibility while continuing to drive investments that benefit all residents under the banner of One Chattanooga.