Budget (Operating & Capital)

Where the Funding Comes From

The data shown above are from the adopted 2013-2014 budget and represent the estimates for 2013.

About Metro's funding sources for operations

The largest source of funding for Metro comes from a share of the retail sales tax collected in its service area. Depending on other assumptions, the portion of sales tax for the program ranges from 54 percent to 60 percent. For the year 2013, sales tax represents 54 percent of the funding available for the program. Because of Metro’s heavy reliance on this source, its operations funding is vulnerable to any economic conditions that cause consumers to spend less. Since 2008, the weak economy has caused spending to fall dramatically, and so have Metro’s sales tax revenues.

Learn more about Metro's reliance on sales tax.

Metro's reliance on sales tax makes bus service vulnerable to economic slowdowns

Before 1999, the Motor Vehicle Excise Tax (MVET) was a major source of funding for Metro. The MVET was relatively stable and grew roughly in line with Metro's service growth. After the MVET was reduced in 2000, Metro lost about one-third of its funding.

In 2000, King County voters approved a 0.2 percent sales tax increase that replaced much of Metro's lost MVET revenues. (Approximately $100 million in relatively stable revenue was replaced by $80 million from a more volatile source.) While the 0.2 percent measure was intended to support all Metro service, proponents had hoped Metro could expand service by up to 575,000 hours if the economy stayed strong. However, by 2002, the dot.com bust had forced Metro to scale back service expansion to 165,000 hours.

Metro got an additional 0.1 percent sales tax boost after voters approved the Transit Now initiative in 2006. This initiative was intended to support an expansion of Metro bus service, but a major economic downturn ensued. Between 2007 and 2009, sales tax revenue was only 94.3 percent of forecasted revenues — $76 million less than expected. Metro is continuing to deliver RapidRide, a major part of the Transit Now program, but had to suspend other elements of Transit Now midway through the program.

Metro has taken many steps since the recession to manage the financial downturn without making major service cuts. Actions include cutting staff positions and programs, tapping reserves, finding new operating efficiencies, and increasing fares. In August 2011, the County Council approved a temporary congestion reduction charge (CRC) to provide supplemental funding for Metro. The CRC will result in approximately $52 million in revenue during a 24-month period from mid-2012 into 2014.

The value of all the actions taken from 2009 through 2013 is projected to be $798 million. The CRC will expire in mid 2014, and one-time actions such as using reserve funds will be exhausted at the end of 2014.

The second largest source of funding is passenger fares. Metro raised fares in 2008, 2009, 2010 and 2011 (a total $1 increase). The current one-zone peak adult fare is $2.50. Fares are Metro’s second largest source of funding.

Approximately 4 percent of Metro's operating funding comes from property tax. This is a new source that Metro began receiving in 2010, when a portion of property tax was shifted from King County ferry services to Metro (without causing a tax increase). One cent of the property tax is used to fund additional bus service on SR-520.

Other sources of budgeted operating funds include advertising and interest earnings.

Finally, based on the financial policies adopted in 2011, funds not necessary to meet projected obligations of the capital and revenue fleet replacement funds are held by the operating fund. Each year, these funds are transferred to the operating program and are held in the revenue stabilization reserve. 

Metro also receives funding from Sound Transit (and some small King County agencies) to cover the cost of services Metro provides for them under contract. This funding is not shown above.

The data shown above represent the six-year capital program (2013-2018).

About Metro’s funding sources for the capital program

Federal and state grants are a major source of funding for Metro’s capital program; most require a local match of approximately 20 percent. Although Metro has been successful in obtaining grants, this source can be unpredictable. RapidRide is an example of a program that has received federal and state grant funding.

One-fourth of the sales tax collected for Metro is assigned to the capital program.

Transfers are made from the Revenue Fleet Replacement Fund to the capital program in years when fleet vehicles are purchased.

Other sources include investment income and contributions from service partners and vanpool operations.

Updated: September 29, 2013