Metro forecast a grimmer budget for next year than originally feared on Thursday, with staff recommending major fare increases to close a gap that has grown to $175 million.
Staff suggested raising fares 15 percent to bring in $92.5 million, while cutting bus and train service by nearly $33 million.
The budget proposal
Next year’s budget deliberations began Thursday but Metro still has months to go before any changes are finalized in the budget that begins July 1. The transit agency is projecting a $175 million gap. To close it, staff recommended:
» Fare increases to raise $92.5 million, which amounts to almost 15 percent increases if made across the board, compared with the $37.5 million brought in by 6 percent increases that are outlined in Metro’s current policies. The increases could be targeted, instead of across-the-board, such as charging more during the “peak of the peak” times when the train system is most crowded or charging more for buses that go to airports.
» Cutting service by $32.9 million by possibly limiting holiday service, closing station entrances in off hours, eliminating bus services with low ridership and increasing the wait times between buses and trains.
» Trimming departments by $10 million, including at least two top executive jobs.
» Limiting MetroAccess growth by raising base fares to double that of a comparable train or bus trip, limiting trips to the federal minimum of within three-fourths of a mile of existing transit stops and tightening eligibility requirements for who can ride the service.
» Tap into $30 million of capital funds allocated for maintenance.
The proposal for the $1.4 billion operating budget immediately faced resistance from board members.
“We will not do this. We will not do what’s on this page,” said Maryland board member Peter Benjamin, pointing to a handout. “The job of this authority is to provide mobility to this region … we don’t achieve that by raising fares and cutting service.”
Still, riders should expect fare increases next year. Two years ago, the board enacted a policy to stagger fare increases every two years, so riders could be due for at least a 6 percent increase.
The transit agency faces a major challenge. Last year, it grappled with an $154 million budget shortfall. It ended up cutting 313 jobs and trimming some bus lines after raiding a surplus fund and receiving additional subsidies from local jurisdictions.
This year, there is less fat to trim — and fewer governments able to help as they, too, battle budget shortfalls.
Metro is expecting less cash coming in, with lower ridership bringing in fewer fares, the end of a 10-year-old advertising contract locked in during the tech boom, and diminished parking revenues.
At the same time, it is expecting higher expenses with its growing MetroAccess service, $12.7 million in additional insurance costs from the deadly June 22 crash, and growing pension payments as high as $102.6 million.
The picture could get worse. The projections don’t reflect a 3 percent pay raise to its largest union ordered by an arbitration panel last month, which the transit agency is fighting in court. Chief Financial Officer Carol Kissal estimated that could add another $15 million to the gap.
The shortfall also does not take into account what Chairman Jim Graham called “the biggest wild card:” Any fixes to make Metrorail safer that the National Transportation Safety Board’s could order at the end of its crash investigation.
“I don’t see a line item ‘NTSB repair work,'” said Graham, also a D.C. councilman.
He recommended the agency use money reserved for maintenance to run the system — or even tap $300 million in long-sought dedicated funding.
That money has been tagged for safety improvements, General Manager John Catoe said. Still, Catoe said the numbers presented Thursday were preliminary for the budget that begins July 1.
But Arlington County board member Christopher Zimmerman said the public needs to be braced for tough decisions.
“The numbers will move around a lot but it would be foolish to leave anyone with the impression that they are going to get any better,” he said.
