This year, Metro's operating deficit will be $211 million. This annual operating deficit is predicted to climb to $500 million if the rail network is completed to 103 miles. Since the federal government pays only a small part of the operating costs, this deficit falls on the shoulders of the taxpayers in the area. With a metropolitan population of 3 million, this deficit equals about $167 per year for every man, woman and child. This is truly excessive.
The facts are:
Under the original plan, 101-103 miles of Metrorail would be built for $2.5 billion. A little over 60 miles have been built for $6 billion. This is $100 million for every mile built thus far. It is estimated that another $5-$6 billion will be required to complete the rail system.
Congress has authorized $1.7 billion to build the line to 89.5 miles. The Department of Transportation has no objection. No further funding authorization is on the books at this time. This 89.5 miles will include completion of the station in Vienna. It does not include building from Van Dorn in Alexandria to Franconia in Springfield, which it should not. Metrobuses are already conveying more passengers from Springfield into the Washington area than could be accommodated by Metrorail.
Salaries and benefit programs for Metro employees are highest in the nation, amounting to 73 percent of Metro's annual operating budget. Metro's labor contracts are to be renegotiated next year. The excessive salaries and benefits should be adjusted downward.
Local jurisdictions are becoming more and more reluctant to continue financing such a bloated system. Fairfax County Board of Supervisors Chairman John F. Herrity has called Metro "a welfare program for its workers. It is time it became more of a transportation system." The Fairfax County Taxpayers Alliance agrees with Herrity that the high annual costs of operating Metro have to be reduced. The alliance further believes that Metro's continued high operating annual deficits, if not corrected, will place an undue hardship on taxpayers in this area. The Alexandria Taxpayers Alliance also agrees. Fairfax and Falls Church are considering awarding busing contracts to private companies in order to cut back Metro costs. Rarely does the Washington Metropolitan Area Transportation Authority mention its huge annual operating deficits. Rarely are the citizens of this area told beforehand of the details of rail expansion costs. Rarely are less costly transportation alternatives discussed. But citizens and taxpayers have a right to know about their future financial obligations.
-- Robert E. Harrington
President, Arlington County Taxpayers Association I am writing in response to your letter regarding Metro-related issues. As you are aware, last year I was chairman of the Metro board and this year (Mary Margaret) Whipple is representing our continued concern at Metro. We both have worked very hard to contain Metro's costs with some success. More needs to be done, but a good beginning has been made.
The figure you cite ($211 million) is not for 1984 but for 1986. Metro's FY 1984 operating subsidy was $185 million and the FY 1985 estimate is $192 million. The budgeted FY 1986 subsidy is $211 million. We have made concentrated efforts in keeping these increases to a minimum while the system continued to expand.
Over the last several years, the Metro board has set budget guidelines for Metro's operating budget, a concept I brought to Metro from the good experience we have had with it in Arlington. These guidelines have proven very useful in keeping operating costs down. Metro also did not increase fares for the last year, (and) at the same time increased the cost recovery ratio for the system. Cost recovery, as you know, is the percentage of total cost which is paid from the fare box -- that is, by the rider.
The $500 million future operating costs estimate is a figure that was prepared during a time of high inflation and high interest rates, when the economy and operating outlook did not appear as favorable. Currently, I am participating in a task force with the Federal City Council to look at Metro's operating cost today and reestimate future costs.
Regarding Metro's wage and labor contracts, I share your concern. Although Metro operators are not the highest wage earners in the nation, they are within the top 10 transit properties. I know that the Metro board and Metro's management have taken steps to put themselves in a better position for the next round of labor negotiations. As you have stated, some local jurisdictions are choosing nonunion workers for their local bus systems. Competition will surely influence Metro's next round of contract negotiations.
I remain committed to an eventual 103-mile Metrorail system. When we originally signed the Metro compact, a regional commitment was pledged. Now that Arlington is all but one station away from completion, it is unreasonable to default on this commitment.
As you may know, the current allocation formula determines costs partly on the basis of the percentage of rail miles in each jurisdiction. As the system grows to 103 miles, Arlington's percentage share of the overall Metrorail system costs will decrease. Regardless of the ridership on the new rail miles, I would also seek to continue to improve the current 50-percent Metro cost-recovery ratio.
-- John G. Milliken
Chairman, Arlington County Board;
former Metro board chairman (1984) As a fellow Virginia taxpayer, I am most encouraged by your awareness of the deficit problem that, in no small part, is attributable to the massive, never-ending demand for federal transit assistance, both for capital construction and operating deficits.
Please be assured that I will continue our efforts to limit Metrorail construction to that which can be financed under the congressional authorization and to forewarn local jurisdictions of the deficit implications of the expanding Metro system.
-- Ralph L. Stanley
Urban Mass Transportation Administrator All of us are concerned about spending taxpayers' money, but Metro serves such a unique purpose in the area. There are only two institutions that bring the whole area together -- RFK Stadium and Metro. . . .
Of course, we always knew the deficits would be there. We knew it would take a long time before the fares would pay for it all.
-- Frank Smith
D.C. Council member (D-Ward 1); alternate member of the Metro board. We're concerned not only about the Metro deficit but also about federal support (its continuation and at what level) and state support (its continuation and at what level.) If the feds cut back and Virginia and Maryland cut back, it will fall on us, the local governments, to pay for it.
-- J. Hamilton Lambert
Fairfax County Executive We're aware of the deficits, but we appreciate the benefits of Metro. We'd like to see the subsidies less, but we recognize that's what it takes for first-class train service. In our case, the state provides a large share of the subsidy.
We're fully committed to the 103-mile system. The alternative would be more roads, and I'm not sure we'd support that, either.
Metro has taken the equivalent of one lane off I-270. Metrorail handles 70,000 riders a day, all of whom otherwise would be on I-270.
-- Robert McGarry
Montgomery County Department of Transportation In Maryland, the state government is responsible for 75 percent of the operating deficit. This is having an enormous impact on our transportation program, since it is all funded from a consolidated transportation fund. State grants are expected to increase by over 50 percent over the next year, but this will come at the expense of other important highway projects -- for example, fixing up Rt. 270 in Montgomery ad Rt. 5 in Prince George's.
And local governments face serious consequences too, especially since their obligation for 25 percent of the operating deficits comes from property taxes. In Prince George's, where the TRIM Amendment is in effect, this has an extreme impact on other local government responsibilities, such as fire, police and education. The property tax is not a realistic funding source for the subway system.
The problem is that each jurisdiction represented on the WMATA board has its own ax to grind, and thus cost-cutting becomes subject to interjurisdictional politics.
-- Tim Maloney
Maryland State Delegate (D-Prince George's)