(The Center Square) – King County Metro is anticipating a massive reserve shortfall in the years ahead as elected leaders discuss raising taxes before collection even begins for a separate roads tax in 2027.
Recent revenue forecasts project a $107 million reserve shortfall for 2030-31, rising to $977 million at the end of the 2032-33 biennium. It represents the gap between the county transit agency’s projected fund balance and required reserves, but a shortfall doesn’t always mean Metro is facing a cash deficit.
The agency could see a positive ending fund balance in 2030-31, but required reserves will offset it, with Metro facing a $454 million negative balance in 2032-33 and requiring an additional $523 million in reserves.
Last June, county officials approved 5-4 a 0.1% sales tax under the transportation district’s authority, but the $100 million in annual revenue will fund county roads and city transportation projects, not Metro.
“Metro will need to reduce service and capital investments or increase revenue,” Jeff Switzer, a public affairs coordinator, said in an email explaining how Metro could address the looming reserve shortfall.
The Metropolitan King County Council voted 6-2 on Tuesday after reviewing the latest projections that morning to assume control of the county transportation district. It operates as a separate government entity to generate revenue, with the council holding its legislative power without the county executive.
Absorbing the transportation district will bring King County Executive Girmay Zahilay into the fold.
The council retained the legislative control it had when it served as the transportation district’s board, but Zahilay can now sign off on ordinances and can veto them. He could also propose transportation taxes for the ballot and sign off on councilmanic measures that do not require a ballot vote to impose.
Councilmembers Claudia Balducci and Jorge Barón voted against absorbing the transportation district.
“We should turn as quickly as possible to a discussion about funding, which … will now have to happen at King County, which means it’s in the executive’s court,” Balducci said during the committee meeting Tuesday morning. “The executive and Metro need to come up with a plan, and I haven’t seen one yet.”
Councilmembers Reagan Dunn, Steffanie Fain, Rhonda Lewis, Teresa Mosqueda, Pete von Reichbauer and Rod Dembowski all voted to absorb the district’s power, with Councilmember Sarah Perry excused.
“But I think the arguments, on the whole, favor this from an efficiency and a policy development perspective,” Dembowski argued during Tuesday’s meeting on absorbing the transportation district.
The Center Square contacted Balducci and Fain ahead of Tuesday morning’s presentation and the vote later that afternoon to ask whether they support pursuing a ballot measure raising taxes. Fain’s office declined to comment; Balducci argued an expanding system eventually requires additional investment.
She said there isn’t a plan or timeline for a tax measure yet; that now rests with the county executive.
“You should ask [Zahilay] what his plans are,” Balducci said in an email, noting that any tax proposal should hold them accountable for its promises. “Whatever the measure is, it must go to the voters.”
Any transportation tax Zahilay proposes could help fill Metro’s reserve shortfall, but it likely won’t cover the full gap on its own. During Tuesday’s meeting, the council discussed revenue options that could fill part of it, such as a voter-approved 0.2% sales tax, vehicle fees or a property tax hike.
A voter-approved 0.2% sales tax could raise an estimated $205 million annually. A $100 car tab/vehicle licensing fee could generate $155 million if voters approve it. Another property tax ballot measure could generate $92 million. The council could also impose a $20 car tab fee without voter approval, but it would only raise $31 million.
“Nothing has been proposed at this time, and we are working with Metro and stakeholders to understand the funding needs and all revenue options while balancing affordability concerns,” Callie Craighead, the executive’s press secretary, said in an email, noting that Zahilay was unavailable for an interview.
She said absorbing the transportation district could save up to $2.5 million annually in staffing and other administrative costs.
Metro’s 2025 budget projected a $500 million reserve shortfall for the county’s transit agency by 2028 as spending outpaced revenue growth, prompting cuts that ultimately pushed the gap down the road.
Switzer said the 2026-27 budget scaled back Metro’s fleet to “better match” projected service levels, canceled a new bus base project and adjusted its transition to zero-emission buses in response.
Metro also reduced some administrative costs such as consulting, advertising, training and travel, and continues to realize long-term savings from installing LED lights and replacing aging HVAC systems.
“Metro’s 2026-2027 budget pushed out the projected funding gap from starting in 2028 (as previously projected in our 2025 budget) to 2031,” he said, noting that Metro is assessing funding assumptions of a sales tax measure. “The Executive’s priorities will direct Metro for the proposed 2028-2029 budget.”
Despite the reductions in the 2026-27 budget, the county still projected a $1 million reserve shortfall for Metro by 2030, reaching $755 million by 2032; those figures have since ballooned to $107 million for 2030-31 and $977 million for 2032-33, according to the funding report presented this past week.
Switzer said the situation worsened by $222 million for 2032-33 because the forecast projects $315 million less sales tax revenue across 2026-33, offset by lower reserve requirements and other assumptions.
He said Metro’s financial planning roadmap through 2038 shows about 90% of estimated costs to sustain current service levels, including equipment replacements.
“The challenge will be: What are we willing to do? What discussions are we willing to have? How are we going to address the public with the challenge and get their support?” Balducci told her peers.