I’m from the Government, and I’m Here to Help You

Editor’s note: This is one in a series of posts about the development of Capital Metro’s FY2012 budget. You can get involved with the process by voting on ideas and sharing your own on the icanmakeitbetter online forum, or checking out the resources available on capmetro.org.

One of Capital Metro’s most important funding sources is funding from the federal government which we receive in the form of grants, usually through the Federal Transit Administration.

One program, called the 5307 Urbanized Area Formula Program, provides us with an annual grant as part of a national program that distributes federal aid to transit agencies. The grant program is one of our largest and most consistent sources of funding. As the name implies, the funding is distributed to cities and surrounding areas based on a formula that weighs population and other factors. This year we’ll receive a little over $20 million under this grant, accounting for a little more than 10% of our operating budget.

Beyond its size, the 5307 grant is important because Cap Metro can use it both for capital projects, like buying and maintaining buses, and also for some specific operating costs like paying the companies we contract with to help provide our services. As I am sure you can imagine, since this is the federal government, a big part of the program is keeping up with the paperwork, and that task keeps our federal funding expert busy pretty much all of his work day. There always are reports to file and new grant applications to be completed.

Capital Metro also receives several other types of federal grants. In 2009, in the wake of the national recession, for example, many public agencies, including Cap Metro, received what has come to be known in the media as federal stimulus funding. Under the stimulus program, actually the American Recovery and Reinvestment Act (ARRA), the federal government made grants to state and local agencies for a wide range of capital projects—remember all the talk in the news about “shovel-ready” projects?

We received about $26 million in stimulus funds, which we mainly used to modernize our bus fleet; however, we also have used some of the funds for our “Rails with Trails” program. Most public agencies have now used up their ARRA funds, and we are no exception. We have about $1.8 million left for “Rails with Trails,” but we do have some very fine buses to show for our federal dollars.

Let me note one final point about federal funds. Our federal funding is subject to the federal budget gyrations you often hear about on the news. The federal government has its own financial issues, and so we closely monitor what’s going with transit programs, planning both for how to use the federal aid we receive and for what to do if it doesn’t come through. Hey, it’s Uncle Sam. It comes with the territory.

Let’s Make it Better!

Capital Metro has a new discussion tool for capturing our riders’ input in advance of finalizing a budget for FY2012 (Oct. 1, 2011 thru Sept. 30, 2012). The online forum asks, “How can you make it better?

It’s incredibly easy to use. After creating a username and password, you can vote on and discuss various ideas that have already been submitted, or you can add your own ideas to the mix. I like it because it provides an ongoing public commentary of what’s important to riders, and it’s sortable by type of idea.

The two main categories that we’re interested in are “Increasing Revenues” and “Reducing Expenses,” since we’re making use of the forum specifically to get public input as part of our budget development process. As part of that process, too, we just published a new video about Capital Metro revenue: the types of funding we get, where it comes from, etc. More on that from Interim Chief Financial Officer Billy Hamilton here.

This is the second video in a series about Capital Metro’s finances. Check out all the resources pertaining to the budget development process, including a timeline, meeting schedule, resource links and more, on our website.

Small print: The discussion forum may look familiar–it has the same format as the city’s Speak Up Austin forum, and basically that’s where we got the idea. (Thanks, Austin!)

A Penny Here and a Penny There, and Pretty Soon You’re Talking About Real Money

The sales tax is the tax most familiar to Texans. You pay a little tax on most of the things you buy and on many services. The little things add up. The sales tax is the most important tax for Texas state government, and it’s the most important source of Capital Metro’s funding.

The sales tax, in fact, is vitally important to Capital Metro. About 75% of our revenue comes from the tax, and that ties the authority’s fortunes directly to the economic performance of the Austin region.

Capital Metro receives about $145 million a year in sales tax. Other funding comes from federal grants, from fares and from miscellaneous sources like advertising. They’re all important, but the sales tax occupies center stage. Continue reading “A Penny Here and a Penny There, and Pretty Soon You’re Talking About Real Money”