Rumor Control: Balancing the Budget

As a public agency, Capital Metro takes its fiscal responsibilities very seriously. No matter how you feel about the many difficult decisions we have to make, we want to make sure you have the facts about our finances.

Perhaps you’ve read or heard people say that Capital Metro makes a huge profit every year. It was even suggested in a recent news story that we are “projecting a profit of more than $30 million for the 2008 fiscal year.” Let’s set the record straight.

Capital Metro’s fiscal year 2008 budget lists revenue at $203 million (rounded). Revenue sources include sales tax, passenger fares, grant funding, investment income and more.

The expense side is where people sometimes make a mistake about “profit.” Expenses or expenditures are divided into two parts: operating and capital. Operating expenses include wages & benefits, service providers for operations, materials & supplies (including fuel), utilities, taxes, insurance and more. The budgeted operating expenses for 2008 add up to $169 million (rounded). When you subtract that from the revenue total, it leaves about $34 million. This is what’s often misinterpreted as a profit. Actually, it is the net income before subtracting capital expenses.

How much do we subtract for capital expenses in the 2008 budget? $34 million. Capital expenses include vehicles, equipment, bus stop amenities/accessibility upgrades, facilities, technology, Build Central Texas (BCT) payments to suburban communities and more.

As we prepare the fiscal year 2009 budget we face many challenges including the rising cost of fuel and the public’s demand for expanded service. The proposed budget will be posted at the end of the month for public review and feedback. The final proposed budget will be adopted in September 2008.