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Metro FY24-25 Preliminary Capital Budget: Transit Construction Cut 30 Percent, Highway Expansion Holding Steady

Proposed annual Metro highway expansion construction would hold at about $600M, while transit construction would decrease about 30 percent - from $2.24B to $1.56B

Metro Highway Program image via Metro presentation

Tomorrow the Metro board Budget and Finance Committee will receive a presentation on draft budget figures for Fiscal Year 2024-25 which starts in July. This week's presentation [staff report] reveals that Metro transit construction is expected to decrease about 30 percent - from $2.24 billion last year to $1.56 billion. At the same time, Metro freeway construction is holding steady - from $602 million last year to $603 million this year.

This week's numbers are preliminary and the early forecasts often shift a few percent between the March announcement and the overall annual budget going to the board for approval in May. (Transit operations budget projections will come out in April.)

Trends in the Metro Transit Construction Budget

For the past few years, Metro's annual transit capital budget has bobbed around between 2.1 and 2.5 billion. The year ahead would see it dip below $2 billion for the first time in five years.

At $1.6 billion in FY24-25, Metro rail building boom remains underway. The dip downward isn't a good sign, but it might not be a trend. Annual construction budgets rise and fall somewhat as big projects (Regional Connector, K Line) wind down before other new projects fully ramp-up. East San Fernando Valley light rail is ramping up (currently in pre-construction), and it looks like Southeast Gateway Line construction could get underway fairly soon, too.

Next year Bus Rapid Transit (BRT) construction goes into full swing on three projects next year - North Hollywood to Pasadena BRT, G (Orange) Line improvements, and not-quite BRT in North San Fernando Valley - but the capital costs for these bus projects are much lower than Metro rail.

Trends in the Metro Freeway Construction Budget

For the last couple of years, Metro freeway expansion grew by leaps and bounds - increasing ~80 percent in 2021, ~30 percent in 2022, and ~7 percent in 2023.

Like transit capital, this year's freeway capital decrease appears to be more projects winding down than an actual leveling off of Metro's vast freeway expansion portfolio. Last year, Metro completed two 5 Freeway widening mega-projects totaling more than $3 billion. Metro 405 Freeway widening in Torrance is now expected to finish this Summer.

While that freeway spending winds down, Metro is ramping up construction widening the 57/60 Freeways confluence, plus projects expanding the 91 and 605 Freeways. The 2024-25 budget includes new freeway widening on the 71 and the 14.

Generally, federal, state and county funding streams make it relatively straightforward for Metro to continue to spend lots of money expanding freeways, while funding for transit is harder to come by and less steady year-to-year.

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