Austin’s CapMetro to Cut Budget by 20% Amid Declining Sales Tax Revenue

Austin’s CapMetro Plans Significant Budget Cuts for Upcoming Year

AUSTIN, Texas — The public transit provider for the city of Austin, CapMetro, is gearing up to cut its budget by about 20% for the 2024-25 fiscal year. The decision follows a noticeable drop in sales tax revenue, which has prompted the agency to reassess its financial commitments.

CapMetro’s proposed budget for the upcoming year stands at $704.8 million. This is a significant decline compared to recent years. In the previous fiscal year of 2023-24, the board approved a budget totaling $871 million, and a budget of $902.8 million was approved for 2022-23. This downward trend indicates ongoing financial challenges for the agency.

Financial Outlook

During a board meeting on September 11, Kevin Conlan, Deputy CFO of CapMetro, expressed cautious optimism regarding the agency’s financial position. He stated, “We’re in good financial position. I’m very optimistic for next year, but we remain very guarded as well, with a downturn in sales tax.”

The planned budget anticipates $402.8 million in sales tax revenue, a key source of income for the transit provider. The decline in this revenue stream raises concerns about CapMetro’s ability to maintain its services and planned projects.

Capital Improvement Plans

Despite the budget cuts, CapMetro is committed to launching several key projects. The capital improvement budget totals $229.8 million, representing one of the most significant expenses outlined in the new budget. A major focus will be on the construction of a North Demand Response Facility and the agency’s new headquarters, for which $149.1 million will be allocated over the span of five years.

In addition to these facilities, the agency plans to dedicate $15 million for CapMetro Pickup, an on-demand ride-sharing shuttle service designed to easily pick commuters up from their neighborhoods. There is also an allocation of $2.4 million planned for operations and expansions of the BikeShare program. Earlier in the year, CapMetro initiated the replacement of city bikes with fully electric options as part of their modernization efforts.

Furthermore, approximately $21 million will be invested over the next five years to improve bus stops throughout the city. Another $21 million will be set aside for Project Connect, the city’s ambitious transit overhaul plan. To date, CapMetro has utilized 16.1% of that Project Connect budget specifically for developing rapid transit lines and establishing a new rail station near Q2 Stadium in North Austin.

Public Engagement

The budget proposed by CapMetro will be formally adopted by the Board of Directors during their next meeting on September 23. Community members are invited to attend this meeting and provide their thoughts during public comment sessions, allowing transparency and public input into the agency’s decision-making process.

As Austin continues to grow and evolve, CapMetro’s efforts to adapt to the financial landscape will be critical in securing effective transit options for its residents. The projected budget adjustments and ongoing projects are a testament to the agency’s commitment to improving public transportation despite facing fiscal challenges.