With the September 2020 service change, Metro will restore service to about 85% of pre-COVID levels. However, that’s just a precursor to a series of service reductions Metro is preparing over the next two years, with a cumulative reduction of 20%-30% of service from previous levels rolling out through every service change in 2021 and 2022. Capital spending will be reduced by 30-40%. The Regional Transit Committee is to receive a briefing on Wednesday detailing how Metro is preparing their 2021-2022 budget.
The near-term finances are rough, though somewhat offset by a once-off infusion of $242 million of CARES Act funding, and some dipping into reserves. A little over half of Metro funding is through dedicated sales taxes. Sales taxes for 2020 are now expected to come in 29% short of the forecast from earlier this year. Fares are not currently being collected. Ridership remains 71% below normal levels, so fare revenue will be much lower even after fare collection resumes. The CARES Act funding buys Metro time to restructure operations, but doesn’t address longer term deficits.
The latest King County sales tax forecast, released earlier this month, shows a cumulative shortfall vs the pre-COVID forecast is over $1.3 billion for the decade. Even in 2029, sales taxes are 14% short of the March 2020 forecast.
After sales taxes, the balance of Metro revenues are from a mix of sources including fares, grants, and payments from Sound Transit and the Seattle Transit Benefit District (STBD). The prospects for fare revenue depend on when riders return to transit, which remains highly uncertain.
The voter-authorized STBD taxes expire in December and Seattle has not been clear as to when voters will be asked for a renewal, or what the tax rates would be. The passage of I-976 took away the $60 VLF that accounted for half the revenues. Those could be replaced by asking voters to approve a 0.2% sales tax (currently 0.1%), but the city may prefer not to seek a tax increase in a recession.
If the STBD is not renewed, the reduction in operations would be 20%-30%. Each 0.1% sales tax would add back about 5% of Metro service.
The reduction in the capital program will be coordinated with the service network reductions, and it is likely to include a reassessment of RapidRide expansions and a slowing of electrification investments.
Metro’s new Mobility Framework, though not yet integrated into other Metro policies, is already guiding decisions, and will become more central as service guidelines are updated. There is a fresh emphasis on what Metro terms “priority populations”. These include black, indigenous, and people of color; low-and no-income; people with disabilities; immigrants and refugees; and limited-English speaking. The experience of COVID also points to a reorientation of service toward South King County routes where ridership declines were more muted than elsewhere.