Last week, the Virginia General Assembly approved dedicated funding for Metro for the first time ever. That funding is conditional on DC and Maryland making “proportional” contributions.
But a letter released yesterday, from DC Council chairman Phil Mendelson and five other councilmembers, argues DC shouldn’t pay what Virginia expects. That could lead Virginia or Maryland to pull back on their own contributions, leaving Metro with not enough money for needed repairs and upgrades.
While the councilmembers have a point that the current funding formula is unfair in some ways, this isn’t the time to press the issue. Metro needs dedicated funding now. DC Mayor Muriel Bowser says she is ready to provide the full funding needed, and the DC Council should step up to do the same.
Who pays what?
Local governments divvy up the share of WMATA operating and capital funding under a complex formula written into the WMATA Compact. Here’s a good explainer from contributor Michael Perkins. For rail, it combines “density-weighted population” (charging more to denser areas than sparser ones), number of stations, and ridership. That currently works out to DC paying 36 percent, Maryland 33 percent, and Virginia a bit under 31 percent.
District leaders first suggested a uniform regional sales tax for Metro dedicated funding, which would have led to Virginia paying more than the other jurisdictions, since Virginia generates more sales tax revenue than Maryland or DC.
Another option would be to split the funding obligation equally, with each jurisdiction paying one-third of the total. That’s how federal PRIIA funds work: the federal government pays $150 million a year to WMATA, but only if DC, Maryland, and Virginia each contribute $50 million themselves, combining to equal the federal amount.
But Virginia legislators insisted the new dedicated funding follow the formula. WMATA General Manager Paul Wiedefeld and advocates have been pushing for a total of $500 million a year in dedicated, bondable funding. That means $153 million a year from Virginia, $167 million from Maryland, and $178 million from the District.
The letter, also signed by councilmembers Kenyan McDuffie (Ward 5), Vincent Gray (Ward 7), Brianne Nadeau (Ward 1), Mary Cheh (Ward 3) and David Grosso (At Large), argues this is unfair. Mendelson wrote, “The District has only 32 percent of Metrorail’s ridership, 32.5 percent of the track miles and 15 percent of the region’s population.” He suggests that instead of $178 million, the District pay $166.6 million, which would be equal shares.
However, this is a difference of about $11 million a year. It’s not worth blowing up the whole deal over, and that’s likely what would happen.
The deal really could fall apart
Last year, dedicated funding for Metro in 2018 seemed like a pipe dream. A MWCOG panel (which recommended equal shares, Mendelson notes) predicted that dedicated funding wouldn’t come together this year and that 2019 was the best case. Thanks to strong pushes from advocates like the Coalition for Smarter Growth, League of Women Voters, Sierra Club, and Washington Interfaith Network, and business groups like the Federal City Council, Board of Trade, Greater Washington Partnership, and Chambers of Commerce, it’s really looking likely now.
The legislature in Richmond, still controlled by Republicans most of whom have pledged not to raise taxes, was able to agree on a funding package. One bill going into conference provided $125 million instead of the needed $153, but the higher number won out in conference. The deal takes a lot of money from other Northern Virginia transportation, which Governor Ralph Northam is hoping to amend in special session. Nonetheless, it happened.
That’s historic.
A few months ago, many legislators in Richmond were insisting on anti-union measures or major governance overhauls that Maryland and DC never would have agreed to, before they’d consider funding. It helps that some of those folks lost their seats in November, but others remained. Yet the deal has only moderate governance changes, like caps on how much WMATA can expect its budget to grow every year and a sensible move to make the WMATA board smaller and less unwieldy by limiting participation by alternates.
The action now moves to Maryland, which has approved funding of $150 million but has to bump its number up to $167 million. Governor Larry Hogan had initially demanded that any Metro funding involve a federal government share, something which wasn’t going to happen; he’s dropped that. Observers expect the Maryland legislature to get to $167 million this week; they were partly waiting to see if Virginia would get it together, since the Old Dominion was always seen as the toughest of the three.
If the DC Council doesn’t commit $178 million, then Virginia won’t be giving its full share. Jack Evans, Ward 2 DC councilmember and chair of the WMATA board, told the Washington Post, “If the District stays at $167 [million], Virginia has a provision in its law that negates its contributions. As such, the dedicated funding proposal would fall apart, and Metro would be left with nothing.”
Virginia’s legislation lowers its payment proportionally, so for every dollar DC comes up short, WMATA loses about three.
$11 million isn’t chump change, but the District can afford it (it’s one of the few jurisdictions with a surplus this year, in fact). While there are certainly plenty of things to spend $11 million on, having Metro funding fall apart would be disastrous, especially for DC which is more reliant on Metro.
John Falcicchio, chief of staff to Mayor Bowser, sent a statement saying, “The Mayor’s budget will fully fund Metro with $178 million of dedicated revenue. We will need everyone to be open to how we get there in order to fund the Metro system our residents deserve.”
Councilmembers say they didn’t mean to imperil the deal
From talking to councilmembers and their staffers, it appears at least some of them weren’t fully aware how the letter would be received. Staff for some councilmembers told me that the letter moved very fast, and that it was initially characterized as just asking the mayor to seek a fairer allocation. One could certainly read the letter that way, but that is not how it sounded to the press, advocates, the public, or most importantly, legislators in the other states.
Following the public reaction, Mendelson’s office clarified that they aren’t threatening to hold up the funding:
Brianne Nadeau (ward 1), one of the letter’s signers, sent a statement: “I support the deal made between the three jurisdictions and believe the District should pay its share. It seemed there was an opportunity to get a better deal for District taxpayers, but that window has closed.”
Is this actually unfair?
It depends how you look at it, but maybe so.
It is true that the density-weighted formula is somewhat unfair; it actually rewards Virginia for placing stations in the medians of highways surrounded by parking lots. The very lengthy Silver Line costs a lot to maintain all those tracks, but the formula doesn’t really account for that.
While DC only has 32 percent of ridership, many Maryland and Virginia riders take Metro to DC. However, those riders don’t pay any income tax to DC, which is unfair, but that’s a bigger issue and a bigger unfairness.
The 15 percent of population statistic is not really relevant; the region has large areas in Maryland and Virginia that are nowhere near Metro.
The District is also just more reliant on transit than Maryland and Virginia, meaning the consequence of no deal is more severe; that might simply mean DC needs to take a deal that might be a bit unfair.
There have been proposals from WMATA staff in the past to set up a mechanism to reward jurisdictions for putting density near their Metro stations, or building bus lanes which save money (and help riders!) by reducing bus delay. Right now, if Virginia builds a bus lane, it saves some money, but so do the jurisdictions which didn’t build the lane. It would be fair to study prospective tweaks like that.
The Virginia and Maryland bills require some follow-up studies, like ones into making the Inspector General more independent. DC could require in its bill that WMATA study how and whether the formula is fair, and suggest ways to make it more fair in the future. That would be a good way to address this issue now. Blowing up the deal is not.
Ask the council to step up
If you live in DC, please use the form below to ask Mendelson and your councilmembers to commit the full $178 million. The consequence, to DC and the whole region, of any other course of action is too severe.
https://ggwash.salsalabs.org/dontmessarounddcfundmetro03152018/index.html