Houston Transit Could Lose a Tenth of Sales Tax Revenue

Agency officials say they will continue to make expansion plans in the face of a potentially dramatic reduction in funding.

1 minute read

August 1, 2023, 9:00 AM PDT

By Diana Ionescu @aworkoffiction

Houston Metro bus at a bus stop with bright blur cloudy sky in background

HOUExplorer / Adobe Stock

Despite a prediction that sales tax revenue in the Houston area will fall by as much as 10 percent in the next fiscal year, the region’s Metropolitan Transit Authority (Metro) says it will not let the reduced revenue impact its expansion plans, at least on paper.

As Dug Begley explains in the Houston Chronicle, “Metro bases its budget, which can hover around $1 billion for operations and capital projects annually, on predicted sales tax collections and other sources of revenue.” The prediction for next year signals an unprecedented drop in sales taxes for Metro and in the region.

But Metro Chairman Sanjay Ramabhadran “it is on us to plan.” The agency recently proposed round-the-clock service on some routes to make transit more accessible for workers with less traditional schedules. “Even if it occurs, a dip in sales taxes gives Metro time to react. The agency, which largely does not rely on fares for funding, unlike other large metro areas, has not had to slash services or find new funding when federal funds related to COVID dried up.”

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