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Metro’s funding shortfall next fiscal year is so steep that even an additional $300 million couldn’t stave off severe service cuts that would include the elimination of bus routes, reduced rail hours, longer train waits and station or station entrance closures.
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Metro leaders Tuesday released multiple outlines for reduced service for fiscal 2025 that take into account a projected $750 million budget shortfall, as well as what would happen if Metro received no funding increase or only a partial increase. While the plans are only a possible framework and could change dramatically before July 1, the start of the new fiscal year, Metro officials said the proposals include carefully “targeted” cuts to minimize effects on the most passengers.
The plans are intended to show how quickly transit service in the region could deteriorate without a huge injection of subsidies from jurisdictions across the Washington region. The outlines are the transit system’s latest attempt to sound alarms about the depths of its financial troubles, a problem hastened by the end of federal pandemic aid.
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Metro officials warned that severe service cuts — even for one year — would have lasting consequences for the transit system. Hiring and training staff to replace laid-off operators and technicians would take months. Service cuts, they warned, also would result in lost passengers.
Changes in work and travel routines during the pandemic have contributed to a loss of nearly 40 percent of Metrorail riders, leading to diminished fare revenue.
“Look how hard it was for Metro to recover after covid,” said Metro General Manager Randy Clarke.
Metro board members Thursday will discuss the scenarios during a regular meeting. The board isn’t expected to finalize a budget until April, but decisions that include layoffs would probably have to be made more quickly. Union contracts stipulate that Metro must warn workers by January of any potential layoffs.
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Regional leaders have been working for months on how to help close Metro’s budget hole for next year and in subsequent years, but no specific plans have emerged. Metro also faced a funding shortage in 2020 and developed similar draconian service plans, but the federal government ultimately provided Metro and transit systems across the country with billions of dollars in pandemic-related financial aid.
Metro board weighs options for dealing with bleak financial picture
The funding package, which made up for fare money that had shifted away from telecommuting office workers, lasted more than three years. The $2.4 billion Metro received will run out this year, leaving the transit agency hopeful that regional governments will step forward.
In the meantime, transit leaders say they are cutting costs to lessen the burden on D.C., Maryland and Northern Virginia, which subsidize the agency’s operations. But cuts only go so far with a rail system that has fixed costs regardless of whether riders use the system, officials said.
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“There’s no silver bullet at the end of the day,” Clarke said.
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Transit officials said they cut $95 million in spending this fiscal year by reducing travel, consultant services and the pace at which the agency is using its remaining federal aid. Metro leaders are looking to cut another $50 million next fiscal year by consolidating functions such as call centers and reducing the need for IT hardware.
When Metro faced a much smaller hole last year, transit officials shifted expenses for preventive maintenance from Metro’s operating budget to its capital budget, saving $199 million. Next year, Metro leaders said they want to move even more of that cost — $345 million, or almost half of what Metro spends annually on preventive maintenance — into the capital budget. The capital budget funds construction projects, major repairs and replacement vehicles. It receives separate funding, including contributions from the federal government.
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But such a shift could force Metro to cut back on some long-term projects, including the purchase of electric buses and new rail cars to replace those about 40 years old.
Metro needs millions of dollars, and soon. Leaders are weighing their next move.
Service cuts could help Metro save up to $20 million. Cuts could include reducing peak rail service to every 20 minutes and every 30 minutes the rest of the day.
The Metrobus system could cut all routes except the busiest 37. It could shorten routes, remove routes near Metrorail lines and ask other bus agencies to pick up far-reaching routes — all of which could save up to $10 million annually.
Rail stations could close full-time or during weekends. Rail yards could be shuttered, and Metro could consider closing two of its nine Metrobus garages. The agency could switch to running mostly four or six-car trains instead of eight-car sets, which would decrease maintenance and energy costs, saving up to $8 million.
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Metrorail could close an hour earlier on Friday and Saturday nights, netting an extra $3 million in savings, budget officials said. Cutting the time Metro runs peak service during rush hour from four or five hours to two or three hours could result in up to $5 million in savings. Between $2 million and $7 million could be saved by reducing the number of trains leaving the downtown core, while lines could also be shortened.
“Even this level of pain doesn’t save us a significant amount of money,” Clarke said.
The agency would also consider raising fares for the second time in two years, which could bring in tens of millions of dollars. The result, however, would be a substantial loss in ridership, Metro officials said.
In each scenario, as many as 4,700 people in the transit agency’s 13,000-person workforce could lose their jobs.
The bleak picture improves slightly if more federal workers return to offices. Once 12 percent of Metro ridership, federal workers now make up 6 percent. Reductions to inflation could save Metro $23 million, while efforts to stem fare evasion could result in Metro recapturing $20 million.
This is a developing story and will be updated.
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