Local
Metro warns of ‘grim budget forecast’
By: Kytja Weir
Examiner Staff Writer
December 23, 2008
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Metro officials are working on next year’s budget and plan to present it in the next few weeks. But Metro spokeswoman Candace Smith already cautions, “It’s a grim budget forecast.”
Metro officials have asked their departments to cut back travel expenses and consulting contracts. They also froze all hiring. And the agency asked departments to draft budgets for the next fiscal year that cut 5 percent, then 10 percent.
“Everything is on the table,” Metro General Manager John Catoe said in a radio interview last week.
Metro officials are still working out the details and won’t discuss which rail and bus service it might cut. The last time the agency cut service was in 1996, Smith said. But officials say the situation is worse than in recent years.
“We’re going to be cutting,” Board Chairman Christopher Zimmerman told The Examiner. “We’re going to be laying off.”
But Metro does not plan to seek higher fares from riders for the 2010 fiscal year that begins July 1, according to Catoe, as the board directed the agency to limit fare increases to every two years.
This all comes after an already tough year. Last year, Metro trimmed more than 200 jobs, Smith said, mainly by eliminating its internal construction department. It also raised its fares and parking rates in January after grappling with an estimated $109 million revenue shortfall.
Every year, the transit agency grapples with how to pay for the service that transports millions of riders around the Washington region. Those riders’ fares and parking fees cover about one-third of the system’s expenses, while advertising and other private partnerships bring in additional money.
But about 40 percent of the budget comes from local and state governments that subsidize the service. Typically, local and state subsidies increase by about 6 percent each year, Smith said.
However, those governments are proposing major trims of their own as tax revenues from property and other fees plunge. Last week, Virginia transportation officials said they anticipate cutting at least $1.3 billion from the state’s six-year transportation plan, while Maryland may need to cut $1 billion from its highway and transit projects.
“Every year there is a gap and it’s always the same question: How is the gap going to be made up?” Smith said. “This year we’re not counting on the local governments.”
Meanwhile, another potential financial pitfall that could cost hundreds of millions of dollars looms over Metro. As part of the fallout of the economy’s credit crisis, the transit agency could owe up to $400 million in payments to banks. Metro, with other transit systems, is seeking government relief.
Metro also is facing more expenses as demand grows for MetroAccess, a service that transports riders with disabilities.
“We can’t expect to step up to the plate and step up on subsidies,” Alexandria’s mayor and Metro board member William Euille said at the time. “We’re going to get to the point that something has to give.”
