Austin, TX—The Texas Public Policy Foundation (TPPF) today released an analysis of the Capital Metropolitan Transit Authority that documents $288 million in cost saving opportunities over a decade. Moreover, concurrent tax reductions between $300 million to $500 million would allow the agency to maintain current service levels while reducing sales tax subsidies to ½ cent.

“Capital Metro does an excellent job of providing mobility to economically disadvantaged citizens and to University of Texas students and faculty” said Jeff Judson, TPPF President. “However, Cap Metro needs a dose of realism when it comes to long-range planning, particularly regarding its unjustified proposal to build light rail,” he said.

TPPF is a nonprofit, nonpartisan research institute based in San Antonio. It is dedicated to the core principles of limited government, free enterprise and individual responsibility. The Foundation conducts no “contract” research and accepts no government funding.


Key Findings:


  • Commendations — Capital Metro is due commendation with respect to its (1) comparatively high ridership, (2) large ridership increase, (3) high level of service to riders who do not have automobiles, (4) superior safety, (5) efficient and effective UT Shuttle system, and (6) comparatively high percentage of competitive contracting, which lowers costs.



  • Concerns — There are reasons to be concerned about Capital Metro’s performance and transit in Austin, including (1) lack of accountability, (2) excessively and rising high costs, (3) minuscule impact on traffic congestion, (4) potential inability to deliver on long term plans, and (5) the incomplete, unrealistic and unobjective Metropolitan Transportation Plan.


  • Austin has two major components to its transit system – the UT Shuttle and Capital Metro. The UT Shuttle would rank as one of the most productive systems in the nation if it were a separate entity; the conventional metropolitan bus system would rank in the bottom third.


  • Despite a 200 percent ridership increase since its founding, Capital Metro provides barely 1.5 percent of travel in the Austin area and 3.1 percent of work trips.


  • Capital Metro riders have average incomes 55 percent below the Austin metropolitan area average. Approximately 70 percent do not have automobiles available as an alternative, which indicates that the transit system appears to have an insubstantial role in reducing traffic congestion but does perform a significant public service providing mobility to low income persons.


  • Capital Metro financial performance is poor in several important areas. Non-competitive bus costs per vehicle hour are 35 percent above the industry benchmark while costs per passenger mile are 108 percent above the benchmark. Paratransit (dial-a-ride) costs are 113 percent above a peer group average used in a performance review by the State Comptroller.


  • High costs have been driven by greater than inflationary wage and benefit increases per employee, by a competitive contracting program that inappropriately selected a higher cost operator for the UT Shuttle, high maintenance costs and a large administrative staff.


  • Capital Metro has the lowest fare recovery ratio and the highest subsidy ratio among major transit systems in the U.S. However, the UT shuttle has the second highest fare recovery ratio while Capital Metro bus services have a fare recovery ratio that is fully one-third lower than that of the next-to-last ranking operator.


  • Capital Metro plans to build a light rail system would worsen the financial performance of the agency and would achieve no public purposes for the community. The $669 million 16 mile line would cost more than perpetually leasing a Lexus 400 or BMW 7 series for each new rider. Such a light rail system will carry only a fraction of the person trips carried on a single freeway or signalized arterial and will not reduce traffic congestion or air pollution. The analysis indicates that automobile drivers are not attracted to light rail because it serves so few potential origins and destinations, and because it substantially increases travel times relative to the automobile.


  • Capital Metro’s Metropolitan Transportation Plan indicates that Austin’s heavy automobile dependency cannot continue. Light rail is considered an important element in developing a more compact city in which automobile dependency would be reduced. However, projections in the very same plan indicate that heavy automobile dependence will continue, even if light rail is built.

The report outlines several opportunities for Capital Metro to reduce costs sufficient to operate at current levels with only a ½ cent sales tax subsidy.