Metro is expecting next year’s budget to be so dismal with rising costs and dropping revenues that even a 6 percent fare increase would not cover the amount the agency expects to lose in advertising revenue alone.
The agency Thursday forecast a $144 million gap in its operating budget, typically more than $1 billion, months in advance of its July 1, 2010, start date. Officials said raising fares by about a dime would fill less than $38 million of the hole.
That is an early diagnosis that assumes local jurisdictions would be able to subsidize the system as much as they did this year. But local officials warned that they, too, are facing dire budgets, so the agency may not be able to count on those funds.
“At a time when I feel like the heavens have opened and every demon has been unleashed upon us, we have this budget,” Metro Board Chairman Jim Graham said.
Metro expects revenue to drop by about $45 million as a 10-year advertising contract ends. Officials do not think they can make nearly as much in a new contract they are negotiating.
Meanwhile, they are anticipating their expenses to rise by some $92 million, fueled by pension losses in the stock market, higher energy costs and its booming service for riders with disabilities that costs the system about $38 per ride.
It’s too early to know what this will mean for riders and taxpayers. Last winter, Metro forecast another doomsday budget with major cuts to service. It cut 313 jobs but managed to avoid nearly all the proposed bus cuts.
Still, under a board policy to raise fares every two years, it is likely that riders could be asked to fork over higher fares for bus and train trips next year. The last increase was in 2008.
Still, under a board policy to raise fares every two years, it is likely that riders could be asked to fork over higher fares for bus and train trips next year. The last increase was in 2008.
Riders also may be asked to tolerate real cuts to transit service. And Graham warned the agency must take a hard look at the shared-ride MetroAccess system for those with disabilities as it experiences what the agency calls “unsustainable growth.”
The D.C. councilman said, “Every year we’re writing a blank check and the program is expanding and expanding.”
Metro’s board called on the agency to hold public meetings and to start talking to local officials who typically provide half a billion dollars each year to the agency.
“They’re going to force a really bad fare situation and they need to know this and they need to know this now,” said Christopher Zimmerman, who represents Arlington County.
First, though, Graham said the agency needs to eliminate any excesses before it can ask for taxpayer dollars. He said the agency also may to become creative in how it uses $300 million in dedicated funding it is expecting to receive in a joint agreement among Congress, Virginia, Maryland and the District.
