Funding

As a Metro rider, you cover part of the cost of operating Metro by paying your fare. But to keep the system running, we need to do a range of things beyond just operating trains and buses.

Below, learn more about where the money comes from that makes sure your train or bus is there when you need it.

Learn more about where the money goes 

Who pays the cost of Metro? 

In addition to your fares, Metro receives money from the following jurisdictions:

• All the cities and counties in the WMATA Compact (see the map below)
• The Maryland, Virginia, and D.C. governments
• The federal government

The WMATA Compact is the 1967 interstate agreement that created Metro and set the terms for its operation. Learn more >>

Metro’s funding breakdown

Metro’s funding falls into two categories: capital and operating. The region and the federal government fund these two budgets separately and, with limited exceptions, Metro cannot spend capital funds on operating costs.

Operating funds

Operating funds cover the typical day-to-day expenses of delivering transit service, such as the salaries of bus and rail operators, electricity and fuel, and the costs of repairing equipment.

Metro makes a new operating budget for every fiscal year (FY). In our budget, we project how much money we will receive from each source, and we decide how we will spend it. Our fiscal year runs from July 1 to June 30. (So, for example, FY2025 runs from July 1, 2024 through June 30, 2025.) 

Capital funds

Capital funds pay for long-term projects that make our system more reliable, efficient, and accessible. These include things like buying new rail cars, building new stations and lines, and making improvements to tracks and bridges. Because capital projects often take a long time to complete, capital planning happens on a cycle longer than one year.

Sources of operating funds

As of January 2024, Metro’s operating funding comes from three sources:

• 22% comes from the fares you pay, and other revenue streams like parking fees and advertising revenue
• 54% comes from state and local governments in our region
• 24% comes from federal relief in response to the COVID-19 pandemic, which will all be spent by June 2024 (the end of FY2024)

Customer fares and other revenue streams  

At Metro, like at other U.S. transit agencies, the fares our riders pay only cover part of our operating costs. For instance, in 2022, fares covered about 21% of the costs of running the New York City Subway, and about 19% of the costs of running the MBTA system in Boston.

Before the pandemic, customer fares covered over 40% of Metro’s operating budget. With the drop in ridership during the pandemic and changing trip patterns, fares only cover 10% to 15% today.

We anticipate that this will improve, but we expect that ridership in FY2025 (July 2024 through June 2025) will still be about 25% lower than it was before the pandemic, meaning that fare revenue will be lower, too. And riders today are taking fewer long-distance and weekday trips and more short-distance and weekend trips than they used to, meaning that the average fare per trip is also lower. (That’s good for riders! But it’s not good for Metro’s revenues.)

And with fewer riders, Metro also makes less from secondary revenue streams like parking fees and advertising. Under our current Strategic Plan, we are trying to find ways to make more money from advertising, and to identify new secondary revenue streams, like by placing retail in our stations.

Learn more about the Strategic Plan

State and local funding 

Since fares don’t cover Metro’s operating costs, state and local governments fund Metro’s operations, too. There are various funding formulas that describe how much each jurisdiction should chip in. While the funding formulas are complicated, each jurisdiction generally pays based on the amount of service that Metro provides in the area and the number of people who ride that service. Importantly, there are limits to how much jurisdictions need to increase their contributions each year, even if our costs go up faster. You can learn more about the  funding formulas in Metro’s FY2024 operating budget.

Learn more about the operating budget

Unlike all other large transit agencies in North America, Metro does not have any dedicated sources of operating funds. Without dedicated funding, Metro must compete against other state and local priorities for funding each year, making it difficult to plan for the future.

The fiscal cliff

Until the pandemic, the federal government did not fund transit operations for large transit agencies. After the large ridership drop in early 2020, the federal government stepped in and provided relief funds to help keep agencies afloat. Unfortunately, Metro will exhaust these relief funds at the end of FY2024.

This is all compounded by the effects of inflation, which is increasing our costs. The state and local governments that provide funding to Metro don’t increase their contributions as quickly as our costs go up, which means that we are facing a “fiscal cliff” — a point of crisis where the money coming in won’t cover the money going out, with no obvious resolution other than to change the way Metro is funded by state and local governments and the federal government.

Sources of capital funds

Metro’s Capital Investment Program funds major improvements to the rail or bus systems — such as the purchase of 8000 series railcars and zero-emission buses, the construction of new Metrorail stations, and major track and bridge upgrade and replacement work.

Learn more about the Capital Investment Program, and the kinds of projects currently underway 

Capital projects often take many years to complete. To account for long project timelines, Metro typically shares a 6-year outlook for the capital budget. The current capital budget lays out spending plans through FY2029.

Most of the funding for Metro’s Capital Improvement Program comes from federal grant programs and local jurisdictions. In the current six-year budget:

• 27% comes from the federal government
• 21% comes from dedicated state and local funding
• 20% comes from other state and local funding sources
• 32% is borrowed, through the issuance of bonds to investors

Federal capital funding 

Much of Metro’s federal funding comes as a result of the Passenger Rail Investment and Improvement Act (PRIIA), as well as formula grants, which typically come through the Federal Transit Administration (FTA). Metro receives about $150 million annually in federal grants from the PRIAA, but the District of Columbia. Maryland, and Virginia must match the federal contributions for Metro to receive the funding. The jurisdictions share the contributions according to the FY 2022-2027 Capital Funding Agreement. 

FY 2022-2027 Capital Funding Agreement (PDF) >>

Metro also applies for a variety of competitive grants each year, such as:

• The U.S. Department of Transportation's Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grant program
• The FTA’s Bus and Bus Facilities or Low- or No- Emission Vehicle grant programs
• The Department of Homeland Security's Transit Security Grant Program (TSGP)

State and local funding 

Since 2018, Virginia, Maryland, and D.C. have contributed a combined $500 million per year to Metro in dedicated capital funding. This guaranteed funding makes it easy for Metro to plan its capital spending, since we know exactly how much money we will receive each year from this source. If a project needs more money than Metro will receive in a single year, we can also borrow against these funds in future years to help pay for big projects today.