Metro Weighs Fare Increase of 45 Cents
Higher Rates Could Take Effect in January in Effort to Close Budget Gap

By Lena H. Sun
Washington Post Staff Writer
Saturday, September 8, 2007; A01

The cost of riding Metro would rise an average of 45 cents a trip next year under a proposal being considered by General Manager John B. Catoe Jr. as the transit agency seeks to close a $173 million shortfall and relieve overcrowded trains and buses, sources said.

Catoe is scheduled to propose plans to close the agency's projected budget gap at a meeting with board members Thursday. The shortfall has ballooned because of rising energy costs, expanded service and growing maintenance needs.

An average fare increase of 45 cents, which would raise $141 million and could be implemented as soon as January, would represent a 29 percent rise in the average cost of a ride on Metro's bus and rail services. It would be the first fare increase in four years.

Metrorail fares vary depending on the time of day and trip length, with a maximum rush-hour fare of $3.90. Bus riders pay a flat $1.25. The increased rates would vary for bus and rail passengers.

Any fare-increase structure would probably include raising Metrorail's current $1.35 minimum charge, the subway's distance-based charges and the cost of a bus ride, said Metro board members and other local and state officials who have been briefed by Catoe and his budget team in the past two weeks.

Metro managers, including Catoe, declined to discuss the plan except to say that they are working on the details.

Agency officials say that more money is needed because one of the biggest shortfalls in agency history is predicted -- $173 million -- in an operating budget of about $1.3 billion. The extra money would help pay for the increased costs of fuel, electricity and union-negotiated pay raises, officials said.

Additional funds are also needed to expand service -- including running more eight-car trains and more buses on some overcrowded routes -- and to improve maintenance on the 31-year-old system.

This year's budget gap is also large because in March, Metro managers shelved a controversial plan to raise fares this year in favor of trimming costs and laying off employees. Officials have been saying since then that a fare increase is likely next year.

The two biggest sources for Metro's operating budget are money from fare boxes and subsidies from local governments, which this year contributed about $500 million. Catoe is also considering seeking a 6.5 percent increase, or an additional $32 million, in the taxpayer contribution, sources said.

Catoe might also look to privatize Metro parking facilities, which would raise millions in capital funds for the agency but could possibly lead to higher rates for customers.

In an online chat on Metro's Web site yesterday, Catoe said that Metro will continue to look for ways to cut costs.

"We are now at a point where we must cut service [or] raise our fares," he said. "WE WILL NOT RECOMMEND OVERALL CUTS TO SERVICE," he wrote in capital letters. "I have said before that we are in the business of delivering service, so we must seriously consider fare increases."

Catoe also said that there are "no firm numbers available yet," and he told riders that "anything you read about potential fare increases is speculation."

Maryland board member Peter Benjamin said the outlook for next year is going to result in "tough medicine, no matter what we do. But typically, we start with a higher number and end up with a lower number."

Other major transit agencies, including those in Boston, Chicago and Los Angeles, have recently raised fares. The price of a rush-hour subway ride in Boston went from $1.25 to $2 in January, and the cost of a bus ride rose from 90 cents to $1.50.

Unlike other transit systems across the country, Metro has no source of dedicated funding. The agency relies on the federal government and subsidies from area jurisdictions to help pay a large share of its capital costs, and area jurisdictions and riders pay for most day-to-day operating costs.

Metro passengers pay a higher share of the cost of a ride than do transit riders in other cities. Metro said its bus and rail passengers pay 58 percent of the cost of their rides; the national average in 2005 was 33 percent, according to the Federal Transit Administration. When just Metro's rail system is considered, that figure rises to 79 percent, one of the highest in the nation.

Revenue from passengers has increased in recent years as the system has set ridership records, but the extra money has not offset rising costs.

In the past, fare increases have taken effect in July. But should the board decide to raise fares, Catoe told local transportation officials Thursday night that he would like those increases to be in place sooner, "as early as possible in calendar '08," so Metro would have sufficient funds going into the next fiscal year.

Catoe also plans to begin discussing a comprehensive policy that would peg fares to an economic indicator that reflects transportation costs, which are typically double the consumer price index. That way, there would be regularly scheduled increases that riders could expect, and it wouldn't be "an enormous tear-your-heart-out issue, should we have a fare increase," Benjamin said.

Catoe and board members said no discussion of fares can take place without addressing the underlying issue: service.

Randy Tamakloe, 25, who takes the heavily used Red and Orange lines from Twinbrook to Court House, said he could live with paying more if service were more reliable. "The trains are always breaking down," he said as he waited to board an Orange Line train at Metro Center yesterday.

Two weeks ago, smoke and fire incidents crippled train travel throughout much of the system for two nights, closing 11 of the 86 stations at one point. In June, a faulty piece of track circuitry knocked out power on the Green Line during the morning rush.

In his chat yesterday, Catoe said that Metro needs to do a better job.

"One thing that I want to stress is that whatever the increase is, you won't be paying more for the same quality of service," he said.

In the briefing for board members, Metro officials said the $173 million funding forecast breaks down like this: $52 million is needed for one-time actions taken this year, $80 million to keep the system running and $41 million for "everything from aging and deteriorating assets to service expansion and overcrowding relief."

A separate briefing was also presented Thursday to the Northern Virginia Transportation Commission.

The 45 cent fare increase is "one scenario," said Metro board member T. Dana Kauffman, a Fairfax County supervisor who represents Virginia on the Metro board. "This was not presented as holy writ."

Staff researcher Meg Smith contributed to this report.