Budget (Operating & Capital)

Metro’s financial situation

Since 2008, the poor economy has caused a severe shortfall in the revenue Metro receives from sales tax, the largest single source of Metro’s funding.

Metro and the County have followed a comprehensive action plan to manage this difficult financial situation and preserve as much transit service as possible. Steps have included cutting staff positions, postponing most plans to expand service, canceling replacement bus purchases, digging deeply into reserves, and making some reductions in bus service that had relatively little impact on riders. Metro adopted efficiency measures recommended in a performance audit that are yielding ongoing savings of about $20 million annually. Metro and its unions negotiated cost-cutting labor agreements.

The County Council approved four fare increases—a total 80 percent increase—in 2008, 2009, 2010, and 2011. The Council also increased revenue for transit through a shift in property tax from county ferries to Metro.

In August 2011, the Council approved a temporary congestion reduction charge to help fund transit service for two years. This is a $20 charge on vehicles licensed in King County. The Washington Legislature authorized this funding tool knowing that Metro service is critical to support economic recovery, give people an alternative to paying high gas prices, and relieve traffic congestion—especially during major regional road and bridge construction projects. The Legislature also recognized the reforms Metro has made to reduce costs and operate more efficiently.

All of these actions made it possible for the County Council to adopt a budget that preserves Metro’s overall level of transit service and provides a period of stability in 2012 and 2013. During this time Metro is using its new strategic plan and service guidelines to make the transit system more productive and effective. Metro is restructuring parts of the bus system and also reinvesting service hours from low-performing routes to heavily used corridors to reduce crowding on buses and improve on-time performance.

Metro’s heavy reliance on sales tax means that it continues to be vulnerable to poor economic conditions after the 2012-2013 biennium. Stable long-term funding is necessary to enable Metro to maintain service and meet the public transportation needs of the region’s growing population. The Washington Governor, Legislature, and other regional leaders are considering funding options for transportation needs throughout the state, including transit.

2012-2013 budget planning

Metro Transit is a division of the King County Department of Transportation. All county departments prepare their own budgets and submit them to the King County Executive.

To develop a budget, Metro forecasts its expected revenues from sales tax receipts, fares, and other sources, and its expected expenditures for diesel fuel, wages and benefits, inflation, and costs for services. Based on these assumptions and established financial policies, Metro recommends the level of bus service it can provide.

The Executive reviews Metro’s proposed budget and may modify it before compiling it into the whole King County budget. The Executive submits the proposed county budget to the Metropolitan King County Council in the fall. The Council takes public testimony and usually amends the budget before adopting it by the end of November.

Metro’s budget for 2012-2013 was developed and adopted in 2011. Metro had moved to a two-year budget schedule before other divisions of county government. The entire county is moving to a biennial budget cycle, so Metro is developing a new two-year budget in 2012 to synchronize with the rest of the county.

The two-year budgets are reviewed and may be modified after the first year.

Metro's funding structure has changed over the years, affecting the level of services it has been able to provide.

1972

The Seattle Transit System and Metropolitan Transit Corporation merged to form Metro Transit. King County voters approved a 0.3 percent sales tax to fund Metro.

1976

Metro began collecting funds from the motor vehicle excise tax.

1980

Voters approved an increase in Metro’s sales tax to 0.6 percent.

1999

After voters passed Initiative 695, the state Legislature repealed the motor vehicle excise tax which had provided about one-third of Metro’s total revenue.

2000

The state legislature gave King County $36 million in one-time “bridge” funding for Metro and allowed King County to ask voters to raise local transit sales tax levies to a maximum of 0.9 percent. Later that year, King County voters approved a 0.2 percent increase in the local sales tax to restore service cuts made after the repeal of the motor vehicle excise tax. Metro then began collecting 0.8 percent sales tax in King County.

2001

The “dot.com bust” resulted in two years of declining sales tax receipts requiring Metro to scale back plans to increase bus service. Service would still increase over the next few years, but by a smaller amount.

2006

King County voters approved the Transit Now initiative, increasing local sales tax by 0.1 percent to the maximum allowable level of 0.9 percent for public transportation.

2008

The escalating economic downturn caused Metro Transit to lose more than 15 percent of its sales tax base in 2009, requiring Metro to take steps to reduce the size and cost of the system.

2011

Recognizing the work of King County’s Regional Transit Task Force and the County’s commitment to comply with its recommendations for making Metro more efficient and productive, the 2011 Washington Legislature authorized King County to impose a congestion reduction charge to help fund transit service. The King County Council approved a temporary, $20 congestion reduction charge to help maintain the overall level of transit service for two years.