Metro’s options for balancing the budget

There are essentially four options at this point for closing Metro’s $29M budget gap. In order of my preference:

1. Jurisdictional subsidy increases. This would require local area governments to search hard in their budgets for any additional funding that can balance Metro’s budget. The amounts needed by jurisdiction are:

   District of Columbia	$4.9M
   Montgomery County	$7.8M
   Prince George’s County	$6.9M
   City of Alexandria	$0.9M
   Arlington	$2.6M
   City of Fairfax	$0.1M
   Fairfax County	$4.1M
   City of Falls Church	$66K

   My home county, Arlington, has already advertised the maximum allowable tax rate, so this will require cuts in other county services as opposed to tax increases. If you know how your home jurisdiction’s budget process works, please provide insight in the comments.

2. Fare or other fee increases. According to the information given yesterday at the FAO Committee meeting, a ten-cent raise across the board would raise over $30M. However, such a flat raise doesn’t take into account differences in price between services. It’s a pretty large increase on a $1.25 bus fare relative to a $4.50 rail fare. To me that proposal seems inadequately designed and researched, but that’s probably because Metro staff were never really allowed to consider fare increases as part of the plan. If a fare increase proposal were better designed and supported by subsidy increases, I could support it. There’s also the revenue WMATA could gain by applying performance parking at crowded Metro lots, which has unknown revenue potential and should be part of a fare increase package if one is proposed.

3. Shifting capital repair to operating funds. Under budget rules, Metro could shift money between budgets and spend some of the money designated for capital, such as new buses, faregates, fare machines, track equipment, and maintenance facilities. This would hurt the system’s long-term reliability and usability prospects, and would cause old equipment to be used even longer before it’s retired. A lot of this equipment, like Metro’s Flxible buses are near the end of their design life (all 150 of them are more than 15 years old). This would make the problem worse. Metro’s capital budget is already underfunded. We’ll need to fix this problem sooner or later. Because of economic conditions, we may decide to fix it later, but the problem will still be there, and it will grow. note: this is the plan to use the stimulus money discussed earlier

4. Service cuts. Right now, the Metro jurisdictions’ staffs are probably working furiously through lists of bus lines, trying to come up with their allotted amount of cuts in service. But with ridership at all-time highs and service that already doesn’t come more than once an hour in some locations, does that even make sense? It doesn’t have to be all or nothing, though. The way the FAO Committee left it at the meeting, service cuts would have to be made on bus service only, which doesn’t make sense. There are some rail system cuts that could be done without too much pain, like closing some station entrances during non-peak hours where there are more than one entrance (worth $700K per year), and reducing the frequency of trains during the 6-7am timeframe (when I commute!). I would want a plan for how this service gets restored quickly, but I don’t think rail should be immune to service cuts because of a quirk in how Metro calculates its subsidy.

In reality, we’ll probably solve the budget crisis with a combination of all four of these. There’s probably some additonal money each jurisdiction could come up with, but not the whole thing. We may consider fare increases that are better designed and more targeted, but smaller than the whole $30M. There might be some capital expenses we defer to flusher years, and we may make some service cuts. From listening to the committee’s discussion yesterday, I was glad to hear somebody on the panel articulate the same arguments I would have made, most of the time more eloquently than I could have.