Posts about Budget
In his proposal for the DC budget, council chairman Phil Mendelson will propose lowering the streetcar's capital funding from what Mayor Gray has proposed. Mendelson will fund other streetcar-related projects like a new bridge near Union Station, while much of the decrease will fund a package of tax cuts.
In a phone conversation, Mendelson said the change will devote about $400 million for the streetcar over five years. The mayor's proposal dedicates about $800 million over five years, rising to $3 billion over ten years.
Mayor Gray's budget director, Eric Goulet, says this is not nearly enough to build the streetcar system as planned, and the change would effectively halt the streetcar program. Mendelson disagrees, and says that he'd like to see a clearer plan from DDOT about how it will spend the money before approving it.
Gray had proposed a system where as DC's revenue increases, 25% of that increase beyond the projected level for 2015 would go into the streetcar. This would ensure the streetcar has an ongoing pool of money, and since the streetcar will supposedly generate economic growth, it can capture some of that benefit.
Mendelson's proposal would change the formula so that it's only 25% of the gain in any specific year. In other words, if revenue rises from 2015 to 2018, Gray's proposal would dedicate a quarter of the difference from 2015 to 2018 to the streetcar, while the Mendelson proposal would instead use a quarter of the difference just from 2017 to 2018.
Councilmember David Grosso, who agrees with Mendelson's plan, emphasized that he does not want to see the streetcar program wither, but he also doesn't think it needs the quantities of money that Gray wants to dedicate. He said there is a $100 million surplus in the streetcar account; therefore, there isn't a need for more. "It's been proven that they aren't spending the money," he said. "You should budget according to what you can actually accomplish and get it done right."
The mayor has disputed the $100 million number as well. That number came from calculations by staff for Mary Cheh, who chairs the transportation committee. But in a letter to the council yesterday, Mayor Gray called this an "incorrect financial analysis"; Gray's budget staff have described it in more colorful terms.
"It's just not sustainable," said Mendelson. Council budget director Jennifer Budoff explained that while the city's revenue increases by about $200 million a year (of which $50 million would go to streetcar under Mayor Gray's plan) the city's budget also increases, often by more than $200 million a year, due to rising costs. Therefore, she said, the streetcar allocation would eat into the base budget after about five years.
Some of the money will go to pay for a new Hopscotch Bridge, the bridge over the railroad tracks north of Union Station which the streetcar will use. That bridge has to be replaced before the line can extend to downtown and Georgetown, and needs about $200 million.
The cuts will also fund a series of tax breaks which will $165 million a year. These are some of the proposals from the Tax Revision Commission which former mayor Tony Williams chaired. Mendelson's budget proposal leaves out a few proposals from that commission, such as a "local services fee" that would charge all DC employers a flat rate per employee (seemingly a backdoor way of getting some revenue from companies that employ out-of-state workers who don't pay any income taxes) and an increase in the sales tax.
The tax breaks will phase in over 5 years. They include a new middle tax bracket for people making $40-60,000 of 7%, then dropping to 6.5%; making single people eligible for the Earned Income Tax Credit; a higher standard deduction; a cut to 8.75% for people making $350,000-$1 million (but not those making more); a cut in the business franchise tax; and a higher estate tax exemption that would rise from the current $1 million up to $2 million and later to the federal level of $5.25 million.
The sales tax would still broaden to more businesses, like health clubs and yoga studios, a proposal that these businesses fought heavily in recent years.
The DC Fiscal Policy Institute, which supports a more progressive tax code, supports most of these changes and notes that cuts for low and middle income families, which will cost $123 million, make up about three-quarters of the $165 million tax cut package.
The business tax cut costs $40 million a year, and the estate tax cut will make DC lose out on about $14 million a year from deceased residents.
Cheh said her staff have not been able to look at the proposal, which won't be released to councilmembers until 5 pm today; she only has spoken to Mendelson verbally about the plans thus far and has not formulated a position on the proposal. She emphasized that, if the cuts go through, she will work to ensure the streetcar gets enough money to continue building, and recognizes that a project like this can build up momentum which could be lost if there are too many budget hurdles.
I will update this story as it develops.
It's a truism in politics that if you repeat a statement often enough, people will believe it, regardless of whether it's true. In Arlington, a cohort of commentators and activists has been chanting that the County Board is full of profligate spenders. Now that claim has started to have currency in county politics, even though it's grounded in little at all.
Fifty years ago, Arlington was an aging suburb that progress had passed by on the way to greener pastures in Fairfax County. Outdated retail strips, struggling businesses and a declining population portended a bleak future. State and federal planners saw Arlington mostly as space to be traversed between home and work, and they proposed cutting up its neighborhoods for commuter roads.
County residents and leaders did not respond to this challenge by spending as little as possible in the vain hope that doing so would attract people and economic growth. Instead, they campaigned to build an expensive Metrorail subway and put it under Wilson Boulevard, with the goal of transforming it from a tired suburban strip into a new downtown. They planned walkable centers with more housing, jobs and retail, plus new streets and sidewalks.
Continue reading my latest op-ed in the Washington Post.
Instead of a parking garage, the Department of Parks and Recreation (DPR)-owned land near 14th and S Streets, NW in DC could serve a recreational purpose. DPR seems to think so: its map of where the city needs pools seems to point right at this spot.
Now the agency may have a chance to follow through, as its budget will likely include funding for a study and community engagement around how to use this land for recreation, whether as a new indoor pool or something else.
DPR put out a "vision framework" in March which lays out specifically where there is the greatest need for parks, rec centers, pools, and playing fields. Maps show how wide an area each type of facility serves, and suggests general locations for new facilities.
For pools, DPR set a general goal of having a "splash pad" within 1 mile of every resident, an outdoor pool within 1½ miles, and an indoor pool within 2 miles.
The residents who are farther than this from an outdoor pool are in Upper Northwest, which has the greatest dearth of outdoor pools. Mary Cheh, whose committee oversees parks and recreation, funded an outdoor pool for that area, most of which she also represents.
DPR's map also suggests DC needs about six new "splash pads" in the northeast and southeast quadrants, three east of the river and three west. And as for indoor pools, DPR's plan says there are enough, except for in one area: the middle part of the city centered around 14th Street.
The locations of the asterisks showing needed facilities aren't supposed to be exact, but that yellow star looks like it's right around 14th and Q. It so happens that DPR has a large parcel of land just two blocks from that spot, a parcel which has plenty of room for an indoor pool and other recreation.
This is the spot where some area businesses have been suggesting a public parking garage, which would be a bad investment for the city. Should it instead get a pool or other recreational use? Is that what DPR has in mind?
Cheh is intrigued, and allocated some money in her budget proposal for DPR to study what kind of recreational use could be appropriate here.
Square 238, located on S Street, NW, between 13th and 14th Streets, NW, is used by DPR as a parking lot and for maintenance and storage purposes. This location is precisely where DPR has identified a need for an indoor aquatic facility and other recreation needs.This parcel was also proposed as part of a possible land swap for a DC United stadium, but that deal is looking less and less likely with the Gray mayoralty heading into the sunset and substantial skepticism from councilmembers including Democratic mayoral nominee Muriel Bowser.
Although some have proposed this site for a municipal parking garage, the Committee believes that this parcel is ripe for a new recreation facility. Therefore, the Committee recommends allotting $500,000 to engage the community in a design process to consider potential recreation uses for this site.
Is recreation the right use here? If so, should it be a pool? There are a lot more children (and a lot of other people) in the general vicinity of this spot than there once were. On the other hand, there are two private pools very close by which the public can access (for a fee): the DC JCC at 16th and Q and the new Anthony Bowen YMCA at 13th and W.
What do you think should go here?
Transportation chair Mary Cheh has released her serious budget proposals today, and has added funding to design and build a park on the piers of the old 11th Street Bridge, give the neglected Ivy City neighborhood new trees and a recreation center, and more.
Tomorrow, Cheh will propose that her committee amend Mayor Gray's proposed transportation capital budget to add $2 million to design the bridge park in Fiscal Year 2015, followed by $12.5 million across FY2016 and FY2017 to build it. That will cover half the cost; bridge supporters plan to raise the other half from private sources.
Under Cheh's plan, $300,000 will go to fix up streetscapes at Eastern Market, while $1 million over two years will pay to extend Ivy City's sidewalks and include treeboxes. That neighborhood, in an industrial part of the city, has no tree boxes on most of its streets, and therefore no street trees.
Instead of a tour bus parking lot, as the Gray administration proposed last year, Cheh's budget will fund a recreation center on that site (which costs almost $9 million). Rec centers in Chevy Chase, Edgewood, Hardy (in Foxhall Village) and Hillcrest get more money as well, as does the Therapeutic Recreation Center in Ward 7's Randle Circle.
The budget includes $500,000 to finish design for Franklin Square (but funding to actually help build the new park is yet to come in the future).
Roads will also get more money: repaving and repairs to roadways get a boost of $321,000 for each of the eight wards in FY2015. That's in addition to the mayor's capital budget which gave each ward's road projects about $5.2 million over six years. Ward 8 also got an extra $1.3 million from Gray, and Cheh's amendment moves it from the operating budget to the capital budget.
Finally, Cheh is funding a new outdoor pool to go somewhere in Ward 3, which residents have been campaigning for. Critics note that Ward 3 has one of the top public indoor swimming facilities in the city, at Wilson High School, but proponents say that indoor swimming isn't the same, and besides, the ward should have more pools.
Cheh's proposal also will fund some Ward 3 school and library projects: the Cleveland Park library, Palisades Library, Murch Elementary and Watkins Elementary renovations, and also the Capitol View library in Ward 7. It's not unusual for each ward councilmember to pop a few ward-based projects into their respective committees' budgets.
Where does this money come from?
A lot of the money comes from the South Capitol Street Bridge project. It current includes a swing span so that ships can access the Washington Navy Yard, but that was only opened 4 times in the last 8 years.
The Coast Guard has reportedly told DDOT that it is probably fine with not replacing the swing span. And, according to Cheh's committee director Drew Newman, they feel that if the federal government really wants a swing span anyway, then federal money should fund it. (DC is building the South Capitol bridge with local dollars, not federal transportation funds.) The change will save up to $140 million.
Cheh is also moving some streetcar money to later years, because DDOT has built up a surplus of almost $100 million in its streetcar accounts, and won't need some money in the capital plan until later on, according to Cheh's staff's analysis.
Circulator fares freeze, and commuter rail gets a plan
In the operating budget, not much is changing from Mayor Gray's very pro-transit budget. Cheh will freeze Circulator fares at their current level of $1 for at least one year, so that DDOT can engage with the public about whether the fares have to rise.
Another $500,000 will pay to create a Comprehensive Rail Plan. DC does not control MARC, VRE, Amtrak, or CSX, but there needs to be a unified plan about how to help grow commuter rail service in, out, and through DC. The tracks and stations at Union Station, L'Enfant Plaza, and the Long Bridge over the Potomac will need changes to make this possible, and since those facilities are in DC, the District can play a leadership role. The Committee of 100's Monte Edwards has been lobbying for planning around commuter rail, and he's absolutely right. Cheh agrees.
The Committee on Transportation and the Environment will hold its mark-up tomorrow. The other members, David Grosso, Kenyan McDuffie, Jim Graham, and Tommy Wells, could seek to introduce other amendments as well, though typically these budget proposals already reflect requests and negotiations between the councilmembers.
In his last budget as mayor of DC, Vincent Gray continued to put funding into the DC Streetcar and also will expand the Circulator.
Likely transit projects in the near future. Map by the author.
Purple: streetcar; red: Circulator; green: Park Service Mall Circulator. Thin lines are running today or under construction. Thick lines represent extensions or new lines being studied.
All routes are approximate and don't include every twist and turn or multiple alternatives.
The capital budget devotes significant money on an ongoing basis to the streetcar. One quarter of all extra revenue above the base estimate for 2015 will go into streetcar construction (assuming future mayors keep it going). Over the next 6 years, that will bring in about $810 million.
DDOT is currently working to finish the H Street-Benning Road line, and planning to extend it east to Minnesota Avenue and west to Georgetown. Another line, which is under study, would go from the Southwest Waterfront to Takoma or Silver Spring, and DDOT is wrapping up a study on how to run a line through Anacostia and over the 11th Street bridge.
The budget also includes operating funds to start running the H Street-Benning Road segment once it is ready.
On buses, Gray has budgeted $56.6 million over 6 years to buy new buses for Circulator extensions:
- The Rosslyn-Dupont line to U Street and Shaw
- The Union Station-Georgetown line to the National Cathedral
- The Union Station-Navy Yard to the Southwest Waterfront
The budget does not, however, include any capital projects to design or build new dedicated bus lanes. This continues DDOT's pattern of indifference toward reducing delays in the city's bus lines.
There is $28 million to clear out the backlog of sidewalk rehabilitations and repairs, and money to fix up more alleys.
While his transportation department has made slow progress on the streetcar and virtually none on speeding up buses, Mayor Gray has shown a sustained commitment to fund transit projects. Will his successor do the same?
Update: It's worth pointing out that the east-west streetcar on K Street will get dedicated lanes for most of the length between Mount Vernon Square and Washington Circle, in the proposed K Street Transitway. Some buses will also be able to use that transitway. However, there are no bus-specific dedicated lane projects, and most designs for the north-south streetcar do not dedicate lanes, though a few do.
Yesterday, Montgomery County Executive Ike Leggett unveiled his proposed budget, and it has no good news for transit riders. Ride On will get more state aid and hike fares, but it will not run any more buses. Instead, transit revenue will be used to cut real estate taxes.
The cost of running Ride On, as shown in the budget will go up $3.5 million, from $98 million to $101.6 million. Meanwhile, the county will receive $7 million in new revenues, double the cost increase. $5 million in new state aid will come from the gas tax increase passed last year. And fares will rise $2 million, likely a result of matching Metro's fare increase.
Where will this money go? The county's "mass transit tax," a component of the real estate tax, will drop by $5 million. Bus riders, many of whom have low incomes or are renters, will pay more while a tax cut disproportionately benefits the county's wealthiest homeowners.
When Maryland discussed a gas tax increase last year, many groups complained about "raids" on the state's transportation trust fund, including county governments, legislators, conservatives, and the highway lobby. It will be interesting to see how these groups react to this diversion of trust fund money to non-transportation purposes.
Ride On could put the new money it is getting from the state and its riders to good use. The system lacks relief buses, or vehicles on standby, stationed around the county to fill in when other buses break down.
The county counts all late buses equally when it tracks Ride On's performance, but for a rider, there's a vast difference between a replacement bus that comes late and a bus that doesn't come at all. If there's no replacement, the next bus half an hour later might be so full that you can't get on.
Other needed upgrades include restoring the connection to Frederick County buses in Urbana, straightening out the tangle of bus routes around downtown Bethesda, and better weekend service. Funding is also needed for Metrobus's Priority Corridor Initiative, which would improve service on several of the county's highest-ridership routes.
The budget now goes to the County Council for approval. Hopefully, bus riders will find friends there.
Metro is planning to raise bus, rail, and paratransit fares this year, and last week Michael Perkins talked about the transfer discount. In the comments, some talked about the difference between bus and rail farebox recovery. But those numbers aren't really comparable.
"Farebox recovery" is the amount of operating expenses that fares cover. For example, if a system costs $1 million to operate every year and takes in $500,000 dollars in fares, it would have a farebox recovery of 50%. A profitable system would have a number above 100%.
In the WMATA system, Metrorail has a farebox recovery ratio of 67.5%. Metrobus has a farebox recovery of 24.3%. Both on Michael's post and on Twitter, readers asked whether rail passengers were subsidizing bus passengers. Why should rail passengers pay 67% of the cost of riding, but bus passengers pay only 24%? Unfortunately, that's not the whole story.
Not every rail rider pays 67% of the cost of his or her trip. Not every bus rider pays only 24%. The farebox recovery varies from route to route. At any rate, the Metrorail and Metrobus farebox recovery rates aren't directly comparable because each service has different goals and measures success differently.
Ridership versus coverage
Jarrett Walker, author of the book Human Transit, divides transit service into two broad categories: ridership service and coverage service.
These two types of service come from the conflicting goals transit providers face. On the one hand, they're supposed to cover all of their service area. On the other hand, they're supposed to have as many riders as possible for as little subsidy.
Generally, agencies solve these competing goals by providing both types of service. In the WMATA service area, there are clear examples of ridership service. The overcrowded 16th Street Line is a perfect example. The busy H Street Line is another.
While some lines are clearly ridership lines, much of the Metrobus network (and especially the jurisdiction-operated bus services) are coverage lines. These are lines that are never going to compete with car trips, but they serve areas that WMATA and local governments feel should be covered. If the agency was only concerned with profitability, these areas wouldn't have any service.
Lower-performing coverage routes include the 2T in Virginia and the R3 in Maryland, each with about 14.8% recovery. But even in the District, some lines are coverage lines. The 64 is a borderline case. It runs down 11th Street NW between frequent service lines on Georgia Avenue and 14th Street, and is within walking distance of both. But for those who aren't willing to walk further, it's a coverage service, though it has a decent farebox recovery of 37.9%.
Apples and oranges
And this is where the problem with comparing rail and bus comes in. In this region, and in most regions, most rail service is ridership service. This is for several reasons. At least in modern systems, Federal Transit Administration rules only allow rail lines to be built if they'll have good ridership. And transit agencies themselves don't make large capital investments in rail unless they're going to have good ridership.
Buses, on the other hand, fall into both ridership and coverage categories in almost every region. So when we compare rail, which is almost entirely composed of ridership lines, to bus, which is a mixture, we are comparing apples to oranges.
Farebox recovery is not a good metric for coverage lines, because their goal is not to generate ridership, but rather to provide service to areas the agency thinks need to be served, regardless of productivity.
Since the Metro rail lines are all ridership lines, they have a very high farebox recovery ratio. Some bus lines in DC have good farebox recovery. But much of the network has worse farebox recovery because by design it's supposed to.
Several of WMATA's bus lines cover more than half their cost through fares, including the X2 bus on H Street and the 70 bus on Georgia Avenue. One bus line, the 5A to Dulles Airport, actually has a farebox recovery ratio better than the rail average.
What does this say about WMATA bus fares?
Really, this doesn't say anything about WMATA's bus fares.
The farebox recovery ratio measures how much rider fares cover the cost of service, and that's it. In the WMATA budgeting process, the agency figures out the cost of providing the service, and then they determine how much money they'll get from the jurisdictions. The remainder has to come from fares. Essentially, the agency (and the funding jurisdictions) determines what the farebox recovery ratio is going to be.
On individual lines, farebox recovery gives us a sense of the productivity of the route. But just because a route is performing poorly in farebox recovery doesn't mean it shouldn't exist or that the fare is too low. Sure, if it's below a certain threshold, the agency can look to determine how to make it more productive or whether to keep it. And WMATA does do this. But they track a whole set of performance measures, not just farebox recovery.
Some people say that we should strive to make the bus and rail farebox recovery ratios the same, or at least closer to each other. But that's not a goal that works. At least not as long as we have coverage-type services in one set, but not in the other. If anything, we shouldn't try to make bus have a higher farebox recovery ratio; we should try to make rail have a lower one.
Nationwide, heavy rail systems like Metro have an average cost recovery of 47.2%, much lower than WMATA's 67.5%. On the other hand, the US agencies that operate both heavy rail and bus systems have an average bus farebox recovery of 28.0%, barely higher than WMATA's 24.3%.
Over the past few years, Metro has kept bus fares lower as a conscious decision because many people who rely on buses have limited incomes. That's a perfectly valid policy decision. And the result, of course, is a low farebox recovery ratio.
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