METRO BUDGET GAP
Metro Board Likely to Use Stimulus to Close Budget Gap
Thursday, March 12, 2009
Metro board members are likely to vote today to use one-time federal stimulus money to close the agency's $29 million budget gap, even though many directors say doing so is irresponsible and could lead to bigger fare hikes and service cuts next year.
The board has spent the past two months trying to find ways to plug the deficit in next year's $1.3 billion operating budget. Metro has begun eliminating positions and has made administrative cuts. Revenue estimates were revised upward. The original $154 million gap has been whittled to $29 million.
To close the remaining shortfall, the agency proposed several options, including reducing bus and rail service by eliminating some bus routes, increasing the time between bus and train arrivals and closing some station entrances during off-hours.
But recently, District representatives on the panel, led by the Metro board's chairman, Jim Graham, have pushed to use some of the estimated $200 million in federal stimulus money Metro is set to receive to close the gap instead of considering politically unpopular service cuts.
The proposal has been criticized by some board members and local officials who say using one-time funds to plug Metro's operating budget gap is fiscally irresponsible.
Metro starts the next budget year $29 million "in the hole," said board member Catherine Hudgins, who represents Virginia.
"You can dig yourself in a hole, and the hole can become so deep that the small piece we're protecting now we could lose in greater impact in the future when there's no more money to move around," she said.
Hudgins said that she would prefer to get input from riders on all options, including service cuts, but that there don't appear to be enough votes to support that.
No board member wants to be the one to stand up and endorse politically unpopular options.
"It's really difficult, regardless of the problems you're creating in next year's budget, to vote against a solution that appears to be easy for this year," said board member Peter Benjamin, finance committee chairman. "It's really hard for anybody to say, 'I'd rather take my medicine now than take twice as much next year.' That's what's going to confront the board."
Benjamin said that using one-time stimulus money would mean the board in its next budget will be "looking at more substantial fare increases than would be the case, we will have to look at the potential of greater service reductions, and we will be facing whatever inflation costs are, plus another $30 million."
Supporters of using the stimulus money say that there are few alternatives and that they are optimistic about an economic upturn.
Additionally, Metro is on a tight deadline. Decisions to outline any service reductions have to be made today so they can be discussed at public hearings this month and early next month.
"The other jurisdictions either have to come up with $29 million in service cuts or additional subsidy," Graham said. "If they have those cards to play, it will be surprising."