By Eric Curl
April 19, 2026 – Chatham Area Transit officials are projecting an $8.4 million budget deficit for the 2027 fiscal year, driven by declining tax revenue, the expiration of federal relief funds and rising costs tied to service and capital needs.
The preliminary figures, presented during an April 14 budget workshop, show projected revenues of about $32.2 million against $40.6 million in expenses.
Executive Director Stephanie Cutter said the shortfall reflects multiple pressures, including a reduction in the transit millage rate, the end of American Rescue Plan Act funding and ongoing obligations tied to ferry operations, bus replacements and grant matching requirements.
CAT had requested a millage rate of 1.056 mills for fiscal year 2026, which ends in at the end of June, but the Chatham County Commission opted for 0.94 mills instead. That decrease resulted in an initial projected revenue reduction of about $1.9 million, but based on current trends, Cutter said the decrease could reach roughly $4.2 million.
“These figures are based on the revenue side on year-to-date receipts,” Cutter said. “As we move along April, May, and June, revenues may increase or they may decrease same as expenditures, but this is the snapshot as of today.”
Chatham County also excluded CAT from the most recent SPLOST referendum last year, despite Cutter’s request for a share of the funding she said was crucial for funding vehicle replacements and other capital needs. The prior referendum, which expires on September 30, included a $10 million SPLOST allocation to CAT for vehicles, bus stop improvements and equipment.
2026-04-14 Board of Directors – Full Agenda-2268.pdf
Recently appointed CAT Board member Aaron “Adot” Whitely, a Chatham County Commissioner, said he did not receive any request for CAT to be included in the SPLOST referendum, but that the agency should not rely on uncertain sources like future SPLOST revenues when applying for grants. Instead, the agency should identify more reliable local match funding upfront, Whitely said.
“It’s like going to a car lot, knowing that you need at least $2,000 down, and come up with nothing,” Whitely said.
At the same time, CAT will lose about $3.1 million in annual federal operating support as ARPA funding, used to assist agencies after the Covid-19 pandemic, expires at the end of fiscal year 2026.
Cutter said she has submitted a request to the county for a millage rate increase to 1.2 mills., which she estimates would generate roughly $18.3 million in transit tax revenue.
In addition, CAT is seeking federal earmarks through U.S. Sens. Jon Ossoff and Raphael Warnock, including a $1.255 million request from Ossoff’s office to restore three aging ferry vessels and a $4.375 million request from Warnock’s office to replace five aging fixed-route buses with newer vehicles and onboard technology.
CAT is considering new revenue sources that include expanded advertising such as bus wraps and digital signage, naming rights opportunities like a ferry boat, and larger share of hotel/motel room fees.
Agency leaders said ridership growth will be critical to boosting federal formula funding, which is partially tied to usage. Planned improvements include upgraded bus stops, expanded digital signage and efforts to restore the university pass program to increase student ridership.
On the cost side, officials pointed to wage and benefit increases, fleet replacement needs, ferry restoration and the implementation of the agency’s long-range transit master plan as key drivers of spending.
The agency is also preparing to launch a pilot microtransit program focused on connecting Hunter Army Airfield, Savannah/Hilton Head International Airport and the Enmarket Arena area to existing fixed routes.
Meanwhile, several programs face uncertain funding. CAT Connect, a transportation service for seniors funded through a $796,000 state grant, is set to run out of money by June 30. Officials said they plan to seek outside partners to sustain the program.
The agency is also managing a complex portfolio of grants. CAT reported about $35.8 million in executed Federal Transit Administration grants, many of which require local matching funds to fully utilize. Additional federal highway and state grants bring total available funding higher, but officials warned that projects cannot move forward without local contributions.
“If we don’t have local money, we are going to lose the federal dollars,” Cutter told board members during the workshop.
The funding challenges come amid an ongoing dispute over CAT’s governance, with Chatham County officials challenging a state law that restructured the agency’s board last year and eliminated the commission’s majority control, a change the county is contesting in court.
In February, the commission voted to direct staff to begin the process of identifying and evaluating potential providers for paratransit and other transit services, including issuing a request for qualifications. Commissioners said the move was intended to ensure continuity of service and explore competitive options, not to eliminate public transit. The paratransit request for qualifications is listed under “chairman’s items” on the agenda for their meeting on Tuesday, although no details are provided.
Meanwhile, the budget workshop was Whitely’s second as a member of the CAT board, after Chatham County Commission voted to appoint him and Commissioner Marsha Buford during their Feb. 27 meeting. The commission also appointed John Taylor as a representative of residents with disabilities. There seats had remained vacant since the new board was formed last July.
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