The recent Metro safety problems and leadership changes cannot obscure what lies ahead for the transit agency: Major funding issues and possible service cuts if ridership does not dramatically improve. While there are signs of ridership increases, the agency is still a long way from closing a projected funding gap that transit officials previously estimated to be about half a billion dollars before the award of a large federal grant.
Wp Get the full experience.Choose your plan ArrowRight
The steep Metro fare revenue decline began early in the pandemic, but the agency was saved by $2.4 billion in federal coronavirus relief money. That money, however, begins to run out next summer, when the new Metro fiscal year begins. The agency is also bracing for a similar shortfall in its capital projects budget in the coming years, as Metro pays back bonds it issued to expedite maintenance and upgrades during the pandemic.
Metro says ridership is outpacing transit agency projections
Michael Goldman, who represented Montgomery County on the Metro board for eight years until last summer, shared his ideas on how Metro can try to avoid service cuts. He now serves as chair of the Washington Suburban Transit Commission, which supported a recent proposal in which the District, Maryland and Virginia would increase their capital funding contributions to Metro by at least 3 percent each year.
Advertisement
Goldman spoke to The Washington Post about how Metro might navigate the next few years. Responses were lightly edited for clarity.
Q: The pandemic hurt all transit agencies, but what were the effects for Metro?
A: It really goes to the heart of the Metro business plan and the Metro model, which is essentially a system that was designed to transport federal workers from their homes in the suburbs downtown to federal office buildings. That provided the ridership base. It provided the revenue base through the employer travel benefits program. It provided the revenue share in terms of the larger budget to make the Metro operation sustainable for these last 15 years to 20 years.
When you had that chunk of money representing maybe 45 percent to 55 percent of the operating budget in passenger revenue, that was sort of the basis for Metro then being able to go to the jurisdictions to obtain the subsidy to cover the other half of the operating budget. Now, this has all probably been shot. Some new business plan and projections are going to have to be devised for Metro to survive going forward.
Advertisement
Q: Why does it seem like Metro is going to have a harder time to recover than many agencies?
A: The loss of commuters is a problem throughout the country. But I think the unique demographics in the Washington area with the major employer being the federal government and, second of all, a lot of the ridership being white-collar rather than in a city like New York or Chicago, where there is a larger blue-collar portion of the ridership, means that the impact of lower ridership levels is going to be, I believe, more greatly felt at Metro.
Q: What do the problems with the suspended 7000-series cars, which were found to have had a defect that triggered an investigation and shortage of rail cars, say about Metro?
A: I think it sort of pulled the Band-Aid off a number of long-term cultural problems that Metro has had that I noticed in my few years there. One is the kind of stove-piping where each unit or department sort of does its own thing and there is very little coordination. I think we see that here, where the operating people were treating this initially as a warranty problem, and really not bringing in the safety people and coordinating a response with them. They never really focused on it as being a major safety problem and a major concern for ridership at a very high level.
Advertisement
Q: What options does Metro have with this looming fiscal cliff, as you have called it?
A: What they can do first is to be honest with the jurisdictions and public and indeed, show them this is coming. There are probably three or four things that could be considered as a way to closing that hole. One, which is probably the more optimistic, is some kind of a regional sales tax, which would provide a good chunk of that money, essentially a new source of revenue. A second is obviously some increased subsidy directly from the jurisdictions, but I suspect that is going to be a very hard road to be successful on, especially with the Virginia jurisdictions that essentially rely on a property tax base for their revenue.
The third area is to begin to look at where services can be, or I don’t want to say cut, let us be more prosaic and say augmented or refined or revised, to reflect the new realities of what the revenue stream would be. That might consist of taking a hard look at some of the long-haul commuter bus routes that probably have seen a significant decrease in ridership. And I think that is probably true of some of the shorter commuter routes from Northwest Washington and the Virginia suburbs with the new federal government and employer acceptance of telework.
Advertisement
The other thing is to look at some of the Metrorail operations. I guess that comes down to looking at things like the service hours. How late do you want to go? What kind of service do you want to provide on weekends? What kind of service do you want to provide on the very expensive Silver Line addition, which at least in the last month that I was there, it was estimated to cost around $10 million a month or over $120 million a year? The key to the Metro budget is personnel, and so you can reduce your operating expense if you reduce personnel, train operators and bus operators, and that is where you get back to what level of service can you change.
Q: Will the 3 percent annual increase that the District and Maryland have proposed and that Virginia is considering for annual capital budget contributions help Metro avoid its looming capital or construction budget hole?
A: This is sort of the first drop in the bucket. A 3 percent annual increase is not going to cover the gap of a billion dollars, which will now come along in 2026 or 2027 when the dedicated funding from the District, Maryland and Virginia is exhausted as a source of backing up new bonding, so I am very concerned about that.
Advertisement
I am very concerned about it because even the current capital needs projections for Metro do not reflect the cost of a fully electric bus fleet now in its plans. The budget projections are based on replacement numbers as though they were diesel or natural gas-type buses. It does not reflect the added costs for an individual electric bus, nor does it reflect the cost for charging in the various bus garages.
I honestly am not sure how much of the budget reflects these new 8000-series rail cars that have been ordered from Hitachi. I see this as a major issue for Metro. The problem I see is that if you are running a railroad or rail system, those reoccurring capital costs on the rails, on the electronic traffic control system, at the platforms, are going to be there whether you are running a system that is 95 percent of pre-covid levels in terms of ridership, or 60 percent to 70 percent.
Q: How do you sell the idea of a sales tax to voters who are frustrated with Metro service because of the train shortage, recurring safety lapses and charges from elected officials that Metro has a management problem?
Advertisement
A: You have to have the National Transportation Safety Board or the Washington Metrorail Safety Commission come up with a root-cause analysis of why the wheels separated from the axle, even though they are small amounts in millimeters or less than an inch. Then Metro has got to get out there and say, “Well, we now have an understanding of what went wrong. We have a system to make those changes. We are going to engage in a process of weekly or monthly or daily inspections or whatever level of inspection we’re going to provide to ensure that this is a safe system.”
It probably has to be an inspection-screening process that is kind of overly safe in the beginning for the first year or two to demonstrate that there is this commitment to running a safe and reliable service. And above that, I guess you are going to have, this is more an exercise in public relations, a campaign advertising with public officials attesting that they believe Metro is on its way back, it is a safe system and they are going to ride Metro again.