The Chattanooga Area Regional Transportation Authority board of directors on Thursday voted to approve preliminary capital and operating budgets for fiscal year 2026, while seeking much more help from local governments and raising several fares.
CARTA asks for $1.2 million from Hamilton County this year after County Mayor Weston Wamp left nothing for CARTA in last year’s budget. The money would subsidize Care-A-Van paratransit service in Red Bank and East Ridge, who are asking for another $150,000 together, and fund pilot service in the unincorporated county, plus fund some capital projects.
The $58 million capital budget is only 25 percent funded at this point. CARTA President and CEO Charles Frazier said he will aggressively pursue up to $45 million in “critical” federal and state grants to begin replacing CARTA’s aging fleet. Most Care-A-Van and Carta Go vehicles are past their useful life, he said.
CARTA asks for $10.5 million from the city of Chattanooga, specifying $2.9 million toward unfunded capital projects.
Mr. Frazier said there will be no cuts in service and no fare increases on fixed routes, but fares for the Incline Railway, Care-A-Van and Carta GO are set for significant increases.
CARTA loses more than half of expiring American Rescue Plan Act funding this year – $1.1 million – and seeks to make up the difference with a 33 percent increase in requests from local municipalities, a 32 percent increase in parking meter revenues, and a 21 percent increase in fares, among other small increases.
“This is probably the best possible outcome,” said board Chair Johan de Nysschen.
Board member Bill Nye abstained from the vote after disagreeing with a $3 Incline ticket increase. Ticket prices increased from $15 to $20 in July 2024, and he said the public won’t be that empathetic to CARTA’s funding woes.
“I don’t want to price us out of business,” he said. Mr. Frazier said CARTA worked with Incline concessionaire See Rock City to set a reasonable increase.
Board member LeAndrea Sanderfur argued against fare hikes for Care-A-Van, which would range from $0.50 to $1.50.
“The range is very concerning to me whether you are ADA or not,” she said.
Mr. Frazier said the increase is within guidance from the National Council on Disability but hinted that the increase would be gentle if local municipalities come through with funding.
All fare increases would be subject to Title VI impact studies and community forums.
The operating budget is $32.7 million, 9.6 percent higher than last year’s operating budget. It focuses on rising health care and insurance costs, plus cost-of-living increases, and adding new key positions.
“Budgets reflect priorities,” Mr. Frazier said.
He said CARTA is working aggressively this year to fix its foundation, a victim of “chronic underfunding,” while it builds a region-wide comprehensive mobility plan and chooses a spot for a new downtown bus station.
Kimley-Horn engineering, planning and design consultant and the Chattanooga-Hamilton County Regional Planning Agency are using three transit studies from 2017 to 2023 to build the plan, which should be complete in the next nine months, Mr. Frazier said.
The CARTA board will vote to approve a final budget in June.