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The Metro system needs funding, badly. Will Virginia help?

Metrorail train going over aboveground bridge
Tyrone Turner
WAMU / DCist
Metro is facing a $750 million budget gap, and looking for support from D.C., Maryland, and Virginia to prevent massive service cuts.

Read the original article on DCist's website.

Metro’s fiscal woes are well-known at this point: The transit agency is facing a $750 million operating deficit that could result in drastic service cuts if D.C., Maryland and Virginia can’t come up with additional subsidies to fill the gap.

In Maryland, Gov. Wes Moore has already committed $150 million annually to supporting Metro; D.C. submits its budget later and has not yet announced a specific number. Virginia Gov. Glenn Youngkin’s proposed two-year budget does not include additional money for Metro, over and above the state’s usual allocation.

Youngkin's office indicated Friday that the governor would consider Metro funding in the context of legislation enabling a new sports arena and entertainment complex in Alexandria.

And in Virginia (as usual), the funding picture is more complicated. The state pays a little less than half of the regular bill for Metro, with the six Northern Virginia jurisdictions served by Metro picking up the rest of the tab. Now, those jurisdictions say they’re counting on the state to also go halfsies on the stopgap funds.

“The health of Metro is really the lifeblood of our communities and our economy. And a big part of that is also the economy of Virginia,” said Kate Mattice, executive director of the Northern Virginia Transportation Commission, the regional group that oversees Virginia’s funding for the service. “We see this as a partnership between us and the state.”

That means all eyes are on the General Assembly, whose responsibilities this year include passing a two-year budget that would include the state’s additional commitment to Metro — or lack thereof.

That likely puts Metro funding in the middle of political negotiations over proposed cuts to the income tax, education spending, the Potomac Yard stadium plans and more — all of which must be agreed upon by Democrats leading the General Assembly and the Republican Youngkin, who wields veto power.

At stake is the health of the Metrorail system, which is estimated to generate $1 billion in tax revenue annually for Northern Virginia. (Overall, the Northern Virginia transit network accounts for $1.5 billion in state tax revenues, or 5% of Virginia’s General Fund, according to the Northern Virginia Transportation Commission.)

What Metro needs

The total dollar amount Metro needs in stopgap support from the commonwealth over the next year is $130 million, according to lawmakers and transit advocates — in other words, about $65 million from the state and $65 million from Northern Virginia governments, assuming they agree to split the additional bill.

Lawmakers in the General Assembly will also need to vote to temporarily lift a 3% cap on year-to-year increases in Virginia’s subsidy to Metro, a limit agreed upon in 2018 by Maryland and Virginia. (If they don’t do this, and Metro submits a higher bill, Virginia is legally obligated to withhold over one-third of the state’s overall funding for the agency.)

For the second year of funding, the amount Metro will need is less clear. Some of it depends on whether the region agrees to allow Metro to “re-baseline,” or take its 2025 operating subsidy as the new base level of funding, with the understanding that it would increase from there in future years instead of returning to previous funding levels. Experts say that reflects the impact of recent spikes in inflation.

The second-year number also depends on how much Metro pulls from its capital budget to fill in gaps in its operating costs, a practice the agency is considering in the short term but would like to avoid relying on as much as possible.

The Northern Virginia delegation to the General Assembly has begun putting forward budget amendments that would begin to accomplish some combination of all of the above. State Sen. Dave Marsden (D–Fairfax) has an amendment that would lift the 3% cap co-patroned by the rest of Northern Virginia’s state senators.

In the House, Del. Mark Sickles (D–Fairfax) and Del. Paul Krizek (D–Fairfax) have also put forward budget amendments. Both add $65 million in state funding for each of the two years, or $130 million in total; Sickles’ amendment also includes language to lift the 3% cap.

“People plan their lives around it, right? It’s a decision factor in where you live,” Sickles told DCist/WAMU. “It’s just a basic artery for our region. And we’ve got to protect that.”

A spokesperson for Metro thanked the local delegation to Richmond for putting forward the budget amendments, calling the move “a big step in preventing major service cuts and staff layoffs.”

Youngkin calls himself a “huge supporter” of Metro and included language in his proposed budget that would allow Metro the flexibility to “re-baseline,” assuming the agency assents to a corrective action plan agreed upon with Virginia officials. But as noted earlier, Youngkin didn’t include any new stopgap Metro funding in his legacy budget, and he’s said he wants to see “a viable business plan” from Metro before considering additional support.

Youngkin has particularly expressed concern — which is widely held among officials across the D.C. region — that the service will continue to struggle as long as federal workers are not required to return in-person to the office.

Metro General Manager Randy Clarke has sought to allay the Youngkin administration’s concerns about cost efficiency in the agency budget. In a letter to the administration obtained by DCist/WAMU, Clarke detailed the austerity measures the organization is taking to reduce operating expenses by $117 million, including salary freezes, fare increases, administrative savings, limited peak hours of service and reductions in standard train lengths to decrease maintenance expenses.

“Holding the line on spending to the FY24 level demonstrates that we have listened to the call for Metro to manage our expenses aggressively,” Clarke wrote.

The politics of supporting Metro

Funding for Metro in the General Assembly is increasingly tied to passing legislation enabling the Potomac Yard stadium and entertainment complex project to move forward, both by Democrats pushing for support of the transit agency and by Youngkin himself.

“As he’s consistently made known, Gov. Youngkin is committed to delivering a world-class transportation system as part of this one-of-a-kind sports and entertainment district that will generate $12 billion of economic impact and create 30,000 jobs,” said Youngkin spokesperson Christian Martinez, in a statement responding to questions about the governor’s request for “a viable business plan” for Metro. “Virginia has incredible competitive advantages, among them is our transportation system which remains the beating heart of growth and opportunity for so many Virginians.”

Meanwhile, many Northern Virginia Democrats see the stadium deal — a potentially legacy-making project for Youngkin — as leverage for ensuring Virginia pays up to keep Metro from cutting service. Potomac Yard Metro station, which just opened last year, would be a key means of moving fans to and from Wizards and Capitals games (with, locals note, upgrades to ensure the station can handle the volume).

“The two are linked. I think there are many of us from Northern Virginia that would not consider voting for this arena unless the Metro funding deficit is alleviated,” Sickles said.

On Friday, two key Democrats — Del. Luke Torian, who heads the House Appropriations Committee, and Senate Majority Leader Scott Surovell, both from Northern Virginia — introduced legislation to enable the Potomac Yard project to move forward. Surovell told The Washington Post that the two wouldn’t have carried the bill without Youngkin’s commitment to supporting Metro.

But the stadium deal’s future is uncertain, with some key specifics still unknown and mounting resident skepticism to the idea, which would require $1.35 billion in public subsidy.

Sickles believes it’s possible to decouple the two if necessary.

“We have to do Metro either way,” he said. “So, if, arena and sports entertainment district falls apart, we still have this problem, and it is still a high priority for those of us from our region.”

Margaret Barthel is the Northern Virginia reporter at WAMU.