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Metro’s board of directors got its first glimpse Thursday at proposals that underscored challenges facing the transit system, which is trying to close a $750 million gap in next year’s budget without resorting to cuts it says would devastate service.
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The three scenarios outlined by Metro executives would require the agency to draw from its capital budget to fund operating expenses. It is a strategy that could reduce the amount local jurisdictions would pay to keep the transit agency afloat, but one that would leave Metro struggling to pay for long-term fixes and upgrades, including its next generation of rail cars.
“There’s no sugarcoating here,” said Sarah Kline, a federal appointee to the Metro board. “It’s very stark and clear. And the thing that I want to highlight is just how soon the impacts could be felt.”
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Even though Metro won’t know for several months whether it might have to cut staffing, under labor agreements, the transit agency would be required to notify its unions in January that layoffs could be possible later in the year.
Metro leaders say there are no easy solutions. Ridership has been growing, but it is below pre-pandemic levels even as Metro has boosted service to its highest level ever. The $2.4 billion in federal aid that has sustained the agency through the pandemic will run out next summer, leaving a shortfall that could reach $1.2 billion annually this decade without drastic cuts or a financial windfall.
Metro has been scrambling to identify additional cuts that wouldn’t affect service. Agency leaders told board members that they identified $95 million in new, one-time savings in the current budget year and $50 million in ongoing savings beginning next year.
Metro seeks more money while weight options to close its budget gap
Even so, the transit agency can’t get through the budget woes without outside help, its leaders say.
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“Metro understands that we have a role to play in reducing our deficit and trying to address our fiscal plan internally as much as possible, and there’s been some really significant progress in doing that,” board member Matthew F. Letourneau said. “But the presentation will also make clear we’re going to need help from our jurisdictional partners to continue to operate the level of service that we are now and that the region needs.”
The plans outlined Thursday call for lawmakers in Maryland and Virginia to make a one-time adjustment to the funding they provide Metro each year.
In 2021, Metro reduced the amount jurisdictions contributed while using federal money to make up the difference. That gesture has proved costly since each year’s payment is calculated based on what D.C., Maryland and Virginia paid the previous year. When compounded over four years, the reduction means Metro has received $690 million less than what it would have otherwise.
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Leaders painted a dire picture, of a two-thirds reduction in service if local leaders don’t provide more funding. The cuts would take effect July 1, 2024, at the start of Metro’s fiscal year.
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“We’re not trying to bring anxiety and fear and shock. We’re just using the data to drive a conversation that’s got to ultimately result in regional collaboration,” Metro General Manager Randy Clarke said. “Numbers are what they are. They are not emotional. They just have to be addressed straight on for what they are.”
While those worst-case scenarios are unlikely, they underscore the urgency regional leaders are under. Even though the system enjoys widespread support across the Washington region, there is no guarantee Metro will get the level of funding it wants.
Virginia Transportation Secretary Sheppard “Shep” Miller III expressed skepticism that more money is the answer to all of Metro’s woes.
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“Metro is a key part of Northern Virginia’s transportation network,” he said in a statement. “Ensuring its success will require bringing down Metro’s industry-leading costs, the return of federal commuters to the system, and ensuring it is safe for all riders — not just giving it more taxpayer funding.”
District transportation officials said they are committed to working toward a regional solution.
“In working closely with our Maryland and Virginia counterparts on [Metro’s] financial stability, we know that all options must be on the table as we work to address [Metro’s] fiscal deficits,” the District Department of Transportation said in a statement.
Maryland transportation officials said they also are looking forward to reviewing the funding options Metro presented, saying in a statement that “a strong Metro system is essential to the future of the Washington region” and Maryland.
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Even if the transit agency garners financial support to close next year’s budget gap, Clarke cautioned, its biggest challenges might lay ahead.
Next year’s budget gap won’t solve ongoing structural issues that Metro faces with its finances. Fixing that will require a long-term, regional solution, he said.
“I hear a lot from people that say, ‘Hey, Metro does this every few years,’” Clarke said, “and I try to say ‘Yes, Metro will continue to do this every few years until we solve the structural issue with Metro’s funding.’”
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Transit: Metro seeks more money while weighing three options to close budget gap
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