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Houston — The Metropolitan Transit Authority of Harris County enters the 2026-27 fiscal year with a $1.7 billion budget and no emergency cuts on the table. METRO's board voted unanimously Sept. 30 to adopt the plan, one day before the new fiscal year opened Oct. 1.
The budget is built on stronger sales-tax expectations. METRO now projects $29.2 million more in sales-tax revenue than originally forecast, a 2.6% gain. That extra cushion allowed the agency to drop service-reduction scenarios that had been considered during early budget work, according to a news release.
Interim President and CEO Tom Jasien tied the plan to long-term stability.
“Developing a responsible budget means looking carefully at every option and making sure our resources are aligned with the services our customers depend on most,” Jasien said. “This budget maintains that service while meeting our financial obligations and protecting METRO’s ability to serve this region for years to come.”
The adopted budget sets aside $1.015 billion for operating expenses, a 2.4% decrease from the previous spending plan. The decline does not reflect planned reductions to bus or rail frequency. Instead, METRO said the budget avoids restructuring its debt and does not rely on reserve funds during the fiscal year.
Operating money covers the essentials: fuel, vehicle maintenance, operator wages, security, dispatch, customer service and the support systems behind METROLift. Because the sales-tax forecast improved, the agency was able to keep those core operations intact while still balancing its books.
The improved revenue picture also removes the need for the board to choose among politically difficult options such as cutting routes or seeking new funding mechanisms midyear. For daily riders, the practical takeaway is that scheduled service levels remain unchanged under this document.
The most notable change in the budget is on the capital side. METRO plans $371.5 million for capital projects, nearly 40% less than the FY2025-26 budget. What remains is heavily focused on maintaining and improving the existing system rather than starting large-scale expansion projects.
Fleet replacement makes up a major share of that work. METRO plans to purchase 68 buses, 116 METROLift vehicles, 195 vans and 39 alternative-service vehicles. The vehicle purchases are aimed at refreshing an aging fleet and improving reliability for people who depend on fixed-route buses and on-demand paratransit service.
The capital plan also includes money for bus shelters, accessibility improvements and infrastructure repairs. Those upgrades tend to be less visible than new rail lines, but they affect daily comfort and safety at stops and stations across Houston and Harris County.
The cuts to capital spending do not mean the system no longer needs investment. Rather, the budget signals a deliberate focus on state-of-good-repair work over the next 12 months. This is a shift from earlier budget years when capital spending was larger and more tied to system growth.
METRO officials project total ridership will grow 2.8% during FY2026-27, according to budget documents. The forecast is modest but consistent with the agency’s view that commuting and local travel patterns are still stabilizing.
Ridership matters for more than passenger service planning. Stronger ridership figures support future federal grant applications and help justify the allocation of local tax dollars. The 2.8% expectation also gives METRO a baseline for scheduling decisions and performance reviews later in the year.
The budget does not treat the ridership gain as a reason to add significant new service. Instead, the agency appears to be aiming for moderate growth while holding costs flat.
Another major item in the budget is the $231 million transfer to METRO’s General Mobility Program. That program distributes transportation funds to Houston, Harris County and other participating local jurisdictions. Those dollars typically go toward street improvements, sidewalk connections and other projects that are outside METRO’s rail and bus operations but still part of the region’s transportation network.
The program gives local governments flexibility to address mobility gaps in their own communities. It also functions as a key part of METRO’s regional role, especially in areas not directly served by high-frequency transit.
With the fiscal year now under way, METRO will begin executing the vehicle orders and repair schedules outlined in the budget. The next major planning milestone will be the preparation of the FY2027-28 spending plan, which will force the board to revisit the same balance between operating needs and capital investment.
One risk remains: the agency’s heavy reliance on sales-tax revenue. Consumer spending patterns can shift quickly, and any slowdown in the Houston-area economy could pressure revenue and force changes in future budget cycles. For now, the voted budget gives METRO a clear blueprint — one that protects current service, avoids financial engineering and keeps the region’s transit system in operating condition through next September.
