Metro fare increase a possibility in 2013

November 29, 2011

Metro riders could see a fare hike next year as the transit authority faces a projected $124 million shortfall.

The preliminary operating budget for fiscal year 2013, which starts July 1, estimates that revenue will drop $3 million to $809 million and expenses will rise $121 million to $1.5 billion. If area jurisdictions that help fund Metro do not make up the difference, Metro would have to look elsewhere for the money.

Fare increases would be one option. The transit authority last raised rider fees in 2010, when the agency enacted the most expansive increase in its history. Under a 2007 Metro board policy, the authority can raise fares every two years and tie the adjustment to the consumer price index.

“We have to figure out what is an acceptable adjustment for expenditures?” said Tom Downs, a board member from the District who heads the board’s customer service and operations committee. “What’s acceptable for the jurisdictions to pay in terms of an increased subsidy when all of the regional players are feeling a lot of pain? What’s the balance for a fare number?”

Riders say a fare increase would be unfair, especially after the hike last year.

Benjamin Ross, chair of the advocacy group Transit First, said the region “manages to find money for all these big road projects,” such as the Intercounty Connector in Maryland and construction in Northern Virginia, but does not fund transit enough.

“There really needs to be a change in priorities,” he said. “When the cost goes up, you lose riders.”

Metro also faces higher expenses.

Labor costs are forecast to rise $22 million. Half of that increase is due to a 9 percent retroactive wage increase Metro was court-ordered to give its employees, an official said. According to Metro, the rest is due in part to the agency’s paying roughly $2 million in overtime as it pursues an aggressive capital plan to fix the deteriorating rail system. Some of the increased labor costs are also additional wages for bus operators — unrelated to the court-mandated hikes — and for hiring 51 new positions to maintain rail cars, the agency said.

The authority’s health-care costs for its roughly 11,000 employees are also expected to jump by $9 million, and its pension plan has performed worse than expected, creating a $29 million deficit. Metro has to make up the difference.

“There are a couple of big-ticket items that have gone up,” Downs said.

“Some of them are just the price of doing business in the environment we do business in,” he said, referring to the health-care costs and pension plan.

But officials “need to know more about” the assumptions behind others, such as labor costs, he added.

Metro’s board has said it would consider changing its fare structure to eliminate the complex system it implemented in 2010 that charges rail passengers a “peak-of-the-peak” fare for riding during the busiest times on weekdays; implement a flat rate for all riders; or simplify off-peak fares.

To fill the budget gap, the transit agency could reduce the money it spends on escalator and elevator maintenance or eliminate a plan to hire 32 more police officers to patrol buses.

For fiscal 2013, Metro’s rail ridership is projected to drop to 215 million rider trips a year, causing a decline in revenue to $571 million from $574 million. Bus ridership is expected to drop 2.5 percent to 125 million trips a year, creating no change in revenue of $132 million.

Metro officials say rail ridership is closely tied to the region’s economy, and they attribute its drop to high unemployment. Bus ridership, officials said, is linked more to population, and the agency is basing its budget on projections showing that “D.C. population growth will continue to slow,” according to the financial report.

Downs said he’s concerned the system is seeing a steady decline in rail ridership, noting that this year’s rail ridership from July to October is expected to drop 2 percent while bus ridership is expected to rise 6 percent.

“It is not a sustainable trend,” he said. “What’s driving it? I have no clue.”

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Dana Hedgpeth is the Washington Post’s lead reporter in covering the Metro rail and bus systems in the D.C. region and the Washington Metropolitan Transit Authority (WMATA) that runs them.
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