FAQ and Community Resources

Frequently Asked Questions

Why is Metro confronting a budget deficit?

Metro like many transit agencies across the country experienced funding challenges during the pandemic. Because of Metro's unique funding structure, several factors have also accelerated the FY25 (July 1, 2024 - June 30, 2025) funding challenges:

Ridership and farebox collection due to the COVID-19 Pandemic has not fully recovered.
Delays in return to office work have decimated commuter travel and changed travel patterns in the region.
During the pandemic, Metro granted jurisdictional partners a multi-year financial waiver of reduced subsidy payments to ease financial hardship and uncertainty. Those waivers accelerated Metro's financial hardship.
In Virginia and Maryland, the existing Subsidy Allocation for Metro payments is capped at 3%, making it unlawful for Metro to accept any amount over the 3% Subsidy Allocation. This cap has made it difficult for Metro to address inflation and normal cost of living increases that have far outpaced 3%.
Federal funding that was provided to transit agencies to address pandemic ridership challenges will soon be completely exhausted and no permanent funding has been allocated from Congress.
All factors listed helped to accelerate funding challenges that have to be addressed this year to close Metro's budget deficit.

What is the current budget gap?

The current budget gap is estimated at $750 Million.

How does Metro plan to address the budget gap?

Metro's General Manager and Chief Executive Officer recently released the proposed FY25 budget which looks at various mechanisms to close the current $750 Million budget gap. The following are being proposed:

Financial Management - A one-time savings of $95 Million and an additional $50 Million in reoccurring savings related to contract services management, office consolidation efficiencies, vacancy and personnel expense management
No salary increases for employees (administrative staff and union staff)
Service cuts and fare increases
Shrinking MetroAccess service area
Early closures for rail system
Station closures
Turn back half of Red Line Trains at Grosvenor and Silver Spring
Turn back Silver Line Trains at Stadium-Armory
Use of Capital funds for Preventive Maintenance expenses which occur in the Operating Budget put other priority Capital investments at risk

What's the difference between operating and capital budgets?

Metro has two budgets: Operating expense and Capital expense. The Operating budget largely supports staff who are 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. Whether one customer or 100,000 customers ride Metro, the Authority still has a responsibility to maintain all trains, buses, MetroAccess vehicles, and track, stations, other transit facilities for service.

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. There are instances where Capital funds can be used to reimburse Preventive Maintenance expenses which occur in the Operating Budget, and while it's not a best practice, it is not uncommon across transit authorities.

How are Metro's operations funded?

For the FY2024 (July 1, 2023 - June 30, 2024) operating budget, 22% of funding is from fares and other revenues generated by Metro, 54% is from contributions from Metro's funding jurisdictions in the District of Columbia, Maryland, and Virginia, and 24% is from the federal government in the form of pandemic relief funding. Federal relief will be exhausted next fiscal year and would force Metro to severely cut service and raise fares absent additional funding being found.

Is Metro allowed to carry a financial deficit into a new budget year?

According to Metro's Compact, the Authority is not allowed to carry an operating budget deficit into a new fiscal year. Metro must adopt a balanced budget by July 1, 2024. Compact Language: Article VIII - #24 - '"The Board shall annually adopt a current expense budget for each fiscal year. Such budget shall include the Board's estimated expenditures for administration, operation, maintenance and repairs, debt service requirements and payments to be made into any funds required to be maintained. The total of such expenses shall be balanced by the Board's estimated revenues and receipts from all sources, excluding funds included in the capital budget or otherwise earmarked for other purposes."

What measures will Metro be required to take if the budget crisis is not resolved?

Metro is proposing the following measures which still don't fully address the crisis. These changes would go into effect July 1, 2024:

Financial Management - $95 Million in contract services management, office consolidation efficiencies, vacancy, and personnel expense management
No salary increases for employees (administrative staff and union staff)
Half of bus routes eliminated
Train frequency increases to trains every 15 minutes on weekdays, 20 minutes on weekends
25% fare increase
MetroAccess service area limited
10 p.m. early closures for rail system
Close 10 stations (exact stations TBD)
Turn back half of Red Line Trains at Grosvenor and Silver Spring
Turn back Silver Line Trains at Stadium-Armory
Use of Capital funds for Preventive Maintenance expenses which occur in the Operating Budget

External factors like Jurisdictional funding, federal relief, federal revenue recovery and ridership passenger revenue can help close the deficit.

What impact will this have on the region?

Metro is a huge part of the region's economic development and tourism success. Additionally, Metro helps to drive jobs and sustainability efforts. Without Metro, the region would suffer in every way: more traffic congestion, less parking, lost sustainability efforts, diminished economic drivers that influence the relocation of companies and deepen the economic disparity for customers who truly depend on Metro for service. With more cars on the road there are more collisions, more wear and tear on roads and bridges, more smog, and it makes traveling and living in the region less desirable.

What impact will this have on customers?

Customers will experience a dramatic cut in services which will impact their ability to travel throughout the region. Customers who are unable to make alternative options such as drive a car or pay for ride share options will be forced to wait longer for bus and train service and experience more crowded buses and trains. In some instances, MetroAccess customers will be unable to schedule transportation outside of selected service areas.

What impact will this have on employees?

It's difficult to highlight the amazing service accomplishments of employees while communicating the reward will be forgoing salary increases. Budget cuts will also trigger hiring freezes, requiring many positions to go unfilled and additional workloads to be absorbed by existing employees. We must plan for the budget we currently have which means issuing layoff notices to employees as early as January as stated by the Collective Bargaining Agreement that's currently in place. We are aware that the impact of layoff notices, services cuts, and no salary increases to staff may diminish morale and make Metro a less desirable workplace.

Why does Metro need to resolve this budget crisis now?

Metro is not able to carry a deficit into a new fiscal year. Metro must resolve the funding challenges of FY25 now. If our regional partners fail to act, all the proposed measures must be implemented which will significantly diminish access to transit in the region.

If every customer paid their fare on Metrobus and Metrorail, would the budget deficit be addressed?

No, fare recovery is an important yet small part of Metro's operating funds. If every person in the region paid their fares on Metrobus and Metrorail, it would still not be enough to impact the significant deficit that faces the Authority.

Does using Capital funds for Preventive Maintenance expenses which occur in the Operating Budget help or hurt Metro?

While using capital funds for preventive maintenance helps close some of the funding gap, it is not a long-term solution for solving the funding crisis. Additionally, using these Capital funds to address Operating expenses reduces the amount of funding for other capital projects to improve Metro and keep the system safe and reliable. Use of these Capital funds in this manner also accelerates future Capital Funding challenges.

Why doesn't Metro have dedicated funding beyond the allocated jurisdictional subsidy?

Metro is one of the only large transit agencies without dedicated funding. This makes planning difficult and places the burden on the District, Maryland and Virginia to address Metro's budget needs in addition to their own jurisdictional priorities. Dedicated funding would provide Metro with stability and allow for assurances to address future long-term planning.

What would solve the funding challenges Metro faces?

Metro is not prescriptive in how the financial crisis should be solved. There are immediate legislative challenges that must be addressed in Virginia and Maryland to raise the 3% subsidy allocation so those jurisdictions can fund Metro beyond today's 3%. Other solutions will be up to regional leaders and decision makers to decide.

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