Metro is confronting an unprecedented $750 million budget deficit in the coming fiscal year, beginning July 1, 2024. We're committed to being open and transparent about the impact on service and the region if we can't close the budget gap.
Metro is legally required to present a balanced budget each year, and the Fiscal Year 2025 budget proposals reflect our current funding situation. Our proposed budget eliminates the $750 million deficit through drastic service and administrative cuts, fare increases, transferring money from our preventative maintenance program, and cost savings initiatives. We acknowledge the proposed budget would be painful to our customers and employees and would severely limit the services we provide to the community. Just as ridership is accelerating, we would have to reduce rail and bus service below what is needed for the number of people currently riding Metro.
Our budget deficit is the result of several factors, including the end of pandemic relief money and historic inflation that has pushed costs for everyone even higher.
What we're doing to close the funding gap
We've looked for every opportunity to reduce costs and become more efficient while seeking additional support from our funding jurisdictions in the District of Columbia, Maryland, and Virginia. Here are some of the steps we're taking to close the budget gap:
We identified $145 million in savings ($95 million in one-time savings and an additional $50 million in annual recurring operating budget savings) from reduced contractor and consultant support, vacancy/staffing management, lease terminations, and other administrative efficiencies-all while not impacting service.
Shifting capital funds to cover operating expenses
Reluctantly, we are also proposing to shift $253 million in capital funding to cover operating maintenance expenses. The capital budget funds projects that help to maintain the system and keep it in a state of good repair. Capital projects also fund improvements that make Metro a world-class system. The operating budget largely supports staff needed to implement daily service on Metrobus and Metrorail. Most of the operating budget's costs are fixed, meaning they do not vary directly with service levels. Shifting money from our capital budget to our operating budget is a very consequential choice that means potentially deferring essential projects that keep our system safe and reliable.
The budget proposal includes a 25% fare increase and a 20% parking rate increase, which would generate about $34 million in revenue. While we established Metro Lift in 2023 to assist low-income residents in obtaining lower-cost fares, we know that a significant fare increase will impact Metro's affordability for our customers.
Reducing fare evasion
Fares are an important source of revenue, and reducing fare evasion is a priority. Over the past year, station fare gate upgrades have reduced fare evasion by 70%. We continue to focus on lowering fare evasion by adding new bus fare boxes and new fare gates at stations and Transit Police enforcement. More than recovering fares is needed to close the budget gap, as fare evasion accounts for only 1.6% of our operating budget.
Even with pre-pandemic ridership levels and reduced fare evasion, Metro, like every other transit agency, is a public service that relies on funding from federal and regional partners to deliver our mission. We remain optimistic that our regional partners will join us to help solve our budget crisis. If funding is committed to help solve Metro's budget, we can adjust the potential impacts on service.
Please review and provide feedback on our budget proposal for Fiscal Year 2025 (July 1, 2024 - June 30, 2025). Detailed information about the entire proposed operating and capital budget can be found in the docket materials, including:
- Notice of Public Hearing
- Proposed Capital Budget
- Proposed Metrobus Changes
- Proposed Metrorail Changes
- Proposed MetroAccess Changes
- Proposed Fare and Parking Changes
- Read our FY25 Proposed Budget Book that includes a message from our General Manager and CEO
- Learn more about our FY25 budget and proposed changes
- Watch our Board of Directors discuss the proposed FY25 budget
Revised FY2025 Budget with Jurisdictional Funding
On Thursday, February 8, 2024, Metro's General Manager released a revised budget based on preliminary financial commitments from Metro's jurisdictional partners.
- Read the General Manager's Letter to the Board
- Revised FY2025 Proposed Budget and FY2026 Forecast
- Revised Budget Proposal
- Docket for Public Feedback