A budgeting decision from the city cuts throws Metro under the bus.
Every year in the city of Madison, we follow the same pattern to hammer out the budget. Each city agency—from the assessor’s office to public health—asks for their slice of the pie. The mayor’s office counter-proposes with their own vision, and finally the alders get to hammer out exactly who gets what.
Each year we get a little glimpse into the actual priorities of the city government, not just rhetorical positions. As the budget negotiations get a little sharper-elbowed, they also get a little more revealing.
Sometimes, budget negotiations tell a larger story than what is on the surface. This year, the Metro Transit agency, which operates the city’s bus system and shuttle service for people with disabilities, is not getting its usual transfer in from the city’s general fund. Instead, the mayor is proposing a one-time reduction in city money, to be compensated for over the course of the next three years. To get a picture of what’s going on here, we need to take a step back.
The City’s road map for the Metro budget
For 2022, Metro Transit had an adopted operating budget of approximately $63.9 million, of which the agency is projected to actually use approximately $62.3 million by the end of the year. To help fund that $62.3 million, the city charges for services (mostly through bus fares, but also with things like advertising on the sides of buses), which funds about 15% of the Metro budget. Another 11% is funded through vehicle registration fees. The lion’s share (50%) of the Metro Transit budget is funded through what’s called intergovernmental revenue. This includes grants from federal and state governments, as well as other local governments that pay for Madison’s buses to go to their communities. Last year, Metro Transit received another 8% of its funding from the American Rescue Plan. Finally, the last 8% of the Metro budget comes from the city’s general fund, which last year gave the agency $9.1 million.
In preparation for the city’s 2023 budget, the agency asked for an $8.9 million transfer from the city, before the mayor’s office countered with a $2.2 million transfer instead. Now a $6.7 million dip in funding for an agency that is asking for a budget of $72.5 million is no chump change, and it’s definitely head-turning for a city that has big plans for transit projects over the next few years.
The proposal from the mayor’s office is that the city make up the difference in funding for Metro Transit by increasing the general fund transfer in the subsequent three years (2024 through 2026). The mayor’s office has very specific reasons for making this proposal: strains on the city budget are beginning to add up. Levy limits and state funding criteria mean that the city is facing significant budget shortfalls that are likely to compound very quickly over the next few years as federal COVID-19 relief money runs out.
It doesn’t help that Legislative Republicans cut $41 million in public transit funding for Madison and Milwaukee, arguing that the two cities would be able to replace the funds with federal COVID-19 aid. Gov. Tony Evers allocated $25 million in COVID-19 funds the state received to both cities, but it didn’t entirely fill the gap.
The Metro Transit operating budget is still increasing in 2023 by quite a fair amount—from $62 spent in 2022 to a projected $68 million for 2023, a faster rate of growth than the city’s general budget. The ability to sustain that increase is part of the city’s reasoning in cutting its contribution—a large increase in federal funds is available for city transit projects due the federal Infrastructure and Jobs Act.
It’s unclear if those federal funds will be available long-term, leaving Metro Transit in a common bind for government agencies: should they sculpt their budget around a one-year windfall, assuming that the money will continue to flow and they can make long-term plans (like hiring new personnel) based on that money? Or should they try and figure out short-term spending opportunities without relying on the federal funds in the future?
On paper, the city is helping Metro Transit plan for the future, smoothing the curve of funding by delaying its own contributions so that Metro Transit’s budget can be more stable over the next few years. The city is basically saving some money now so that the really hard decisions can be put off a while longer.
Every cut has consequences
That doesn’t mean that there won’t be consequences to the reduced transfer from the city. Metro Transit, in its own proposed budget that had not yet accounted for the reduction, clearly had large plans for that money. First and foremost, it proposed 30 new full-time positions, which the city budget cut down to 21.
While some of the core expansions, like the hiring of nine new bus drivers, remain approximately the same, several long-term planning positions that the agency hoped to add this year were cut from the budget. These include a long-range planner who would help with grant-writing and applications—which the city wants Metro Transit to rely on—and a civil rights specialist, who would have been hired to help Metro Transit deal with its many civil rights complaints. While these aren’t exactly core services being cut, they do speak to the city choosing to trade funding now for the department’s ability to support future projects.
Another major cost that the city’s budget refused to fund was an expansion in office space for Metro Transit and its subsequent hardware and facilities costs. Again, not exactly a major blow to services, but little spending delays like these can add up, and lead to problems down the road like personnel retention and technical failures.
The wheels on the bus go round and round
All that being said, it looks like the short-term plans for Metro Transit are likely to remain intact. The money and positions set aside for the 2023 bus route redesign and the Bus Rapid Transit project are mostly untouched, as are plans for supporting projects, like the funding allocated to paratransit services (basically the city’s shuttle service) to account for the many bus stops the city plans to close in 2023 as part of the transit system redesign. Similarly the technical positions that will support the electric bus fleet will also be funded.
Metro Transit, a department with several ongoing projects and ambitions, thought it was going to have a bonanza funding year, due to federal grants and city support. But the city, wary of budget problems that are coming down the pipeline, clipped the department’s wings and sent back more modest increases.
That may have long-lasting consequences for Metro Transit, or the city might be right that one lower-funded year can be repaired by investments down the line. But budgetary problems for the city are coming soon and they are coming hard, and how that will impact Metro Transit remains to be seen.
