2025 Budget Update

Good Afternoon Everyone,

I wanted to give you an update on the 2025 budget.  As you know, the City is facing a large budget gap for 2025 (currently estimated at $22 million).  This is a result of various things, but most pronounced is that state limits on property tax levies have left no room for inflationary growth in roughly 13 years.  Madison also receives the lowest per-capita amount of shared sales tax revenue in the state.

Absent a new source of funding, agencies have been asked to propose cuts that equal 5% of general fund revenues.  Unlike most other agencies, Metro only receive a portion of our funds from the General Fund, with the remainder coming from the State, the Federal Government, fares, and regional partners.  So, the 5% general fund reduction equates to roughly a 1.5% reduction in our total budget.  While that is certainly more manageable, it's still an impact.  

This is not a short-term problem where delayed hiring or furloughs will be considered - we must find permanent solutions.  We will be working over the coming months to identify efficiencies and opportunities for small service reductions.  There is no guarantee, but our goal is to structure these reductions in a way that prevents layoffs.

I know this is stressful to many of you and there are a lot of unknowns.  While I don't have all the answers, if you have questions please reach out to me or a chief and we will get you an answer to the best of our ability.   

Thank you,
Justin 

Previous email sent February 2024
Update on City Budget Process 

Metro Team,
As I'm sure you've heard, the City is having robust discussions on how to address an expected $27 million budget deficit for the 2025 budget year.  That deficit comprises roughly 9% of the overall City property tax collections, or 6% of all sources of revenue.  For the last 12 or so years, the City has had to use one-time budget options to balance the budget.  However, the City no longer has those options and so they will need to decide whether to cut costs, increase revenue, or some combination of both.  

In order to increase revenue, the City would need to do one of two things.  One option would be to put the question to voters through a property tax referendum in November.  Alternatively, the City could implement flat fees for various services (potentially including transportation services), which would be billed through municipal water bills.

Unlike many other City departments, Metro's revenues are not entirely from the City of Madison.  We receive direct funding from the State, the Federal government, other regional service partners (such as Sun Prairie, Fitchburg, etc.), and directly from our customers through collected fares.  Therefore, even if the City decides to solve this deficit by cuts alone, the impact would be less drastic at Metro than in other departments.  For example, if Metro's subsidies from the City are cut by 6%, it would impact Metro's overall budget by just 2%.  Metro also has regional partners eager to bring on additional service - meaning that any reduction in the Madison subsidies could potentially be offset by increased service to a regional partner.

I do not know how this will all shake out, but I wanted you all to have this additional context.  If any cuts are required by the City, we will make every effort to offset that amount through revenues from other sources (such as regional partners), billing time to capital projects where appropriate, or saving funds through regular attrition rather than layoffs of existing employees.

We will be sure to share additional information as and when we are able.  Thank you for your continued service to Metro and our region!

Justin Stuehrenberg
General Manager
Metro Transit - Madison