Metro's lurching budget issues will present new dilemma soon
Sunday, January 31, 2010
Metro likes to avoid service cuts and fare increases. They are bad for business. So when the Metro board approved this year's budget June 25, it looked like quite an accomplishment.
This year's budget
When 2009 started, the staff and the board were looking at a $154 million gap between expected spending and expected revenue. The board was able to avoid a fare increase and major service cuts. But the solution developed over the winter and spring was based in part on some one-time-only financial fixes and on others that involved optimistic assumptions about revenue from ridership increases and the elimination of paper transfers.
"We can't skate through this again," board member Chris Zimmerman of Virginia said in June.
"I do think we are going to have a significant problem with our next budget," board member Peter Benjamin of Maryland said.
They were only half right. They hadn't skated through it, and the problem wouldn't wait for the next budget.
The thin line
By this winter, halfway through the fiscal year, the financial staff realized that the original numbers weren't crunching as they thought. Spending was still on target, but revenue wasn't hitting the mark, largely because predictions about ridership had not held up.
The board, responding to complaints that riders were not partners in the budget-balancing process in 2009, offered the public a menu of options that included service cuts, a temporary fare surcharge of 5 or 10 cents, and transfers of various amounts from the budget for long-term maintenance and equipment purchases.
Between Wednesday night's public hearing and Thursday morning's board meeting, the staff tallied the views of 684 people who had commented on the options. The option with the most support was No. 4, which would increase Metrorail, Metrobus and MetroAccess fares by 10 cents and transfer $6.4 million from the capital budget to close the gap in the operating budget. Option 4 was supported by 21.2 percent of the commenters, according to the staff's calculations.
Looking at the comments another way, 54.6 percent opposed the service cuts and 55.7 percent supported fare increases as an alternative. The survey also found that 18.2 percent supported using some capital money to close the gap, while 6.2 percent opposed any use of capital funds for that purpose.
Most board members, including the new federal appointee, Mortimer L. Downey, strongly opposed pulling money from the capital budget, the money to repair or update trains, buses, vans and stations and to buy new equipment.
Zimmerman proposed a resolution. It emerged slowly in the form of a question-and-response session with senior staff across the room about the legal and financial implications of each element as he proposed it. It resembled Option 4 but had a twist: The staff would need to find an additional $6 million in internal cuts.
The impact on riders remained the same: Metrorail, Metrobus and MetroAccess riders will pay an additional 10 cents on all trips between March 1 and June 30. In exchange for the $10 million in revenue, Metro promises no service cuts through June.