Capital Metro prepares a budget for recession, another for quick recovery
With the economy in recession and regional unemployment high, the Capital Metropolitan Transportation Authority is preparing to keep spending flat next fiscal year, equal to this fiscal year’s $403.7 million budget, in the event that revenue sources don’t see a quick recovery.
While the economy appears to be on the upswing right now, Reinet Marneweck, chief financial officer, said that may be largely due to various federal stimulus programs that are propping up the national economy without guarantees for the future.
“While it looks like Austin might not be as severely impacted as other cities in the country, it is unknown how long the crisis will last, and when or if things will return to pre-Covid norms,” Marneweck said. “It is important that we are flexible and that we adjust to the shutdowns, whether the recession will continue for months or potentially years.”
Sales tax, which accounts for about 80 percent of Capital Metro’s revenue, was down by almost 20 percent in April compared to last year. With ridership currently hovering at around 40,000 trips per day – less than half the daily average last June – the agency expects to fall about $8 million short of the anticipated $22.8 million in passenger fares this fiscal year and nearly $6 million short next fiscal year.
Rather than proposing a fare increase to make up for lost revenue or depending upon a speedy economic recovery, the agency is delaying $72 million in projects in order to keep spending in Fiscal Year 2020-21 even with the current budget. Those projects will be included in a separate “recovery budget,” which the agency will use if revenue sources recover sooner than expected.
New sales tax receipts will be reported July 10, offering a better picture of the local decline in sales tax. For now, Capital Metro has modeled best-case, most-likely and worst-case scenarios for future passenger fare and sales tax revenue.
Under the most-likely scenarios, sales tax would reach pre-Covid-19 levels by September 2021 and passenger fares would bring in $17.2 million next fiscal year. In the best-case scenarios, sales tax would hit pre-Covid-19 levels by February 2021 and ridership would generate $18.9 million in passenger fares.
Until revenues return to normal levels, Capital Metro will not be offering raises to staff. The agency will also put a hold on its installation of onboard digital displays, vehicle camera systems, various initiatives to improve transit stops and facilities, and a $52.7 million effort to replace its diesel commuter coach fleet with battery-electric buses.
With electric commuter bus technology now becoming more viable, Marneweck said those solutions will continue to mature, providing Capital Metro more options for electrification by the time the economy returns to normal.
Capital Metro is, however, setting aside funds for Project Connect development and review, further electrification of local transit buses, construction of Broadmoor Rail Station and Downtown Station, bus stop enhancements and an account-based updated fare collection system with onboard pass validators fleetwide.
“These items are very important with the pandemic to ensure that we have hands-free fare collection and also that we are able to utilize fare capping measures that will ensure more equity with fares for regular users,” Marneweck said.
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