AFEW MONTHS ago, a panel that studied how to continue paying for Metro urged that the region provide the transit system with a dedicated funding source -- money set aside and safe from competing priorities. The panel was ignored. Now comes Rep. Thomas M. Davis III (R-Va.) with a like-minded -- but unignorable -- proposal. Mr. Davis has managed to make local officials take notice by dangling a plump carrot in front of them: $1.5 billion in federal funding. That should be enough to force a serious reckoning of Metro's long-term financial health -- one that officials in Virginia, Maryland and the District have been avoiding for years.

Mr. Davis's commendable idea, contained in a bill offered yesterday in his House Government Reform Committee, would represent a critical new federal commitment to Metro, which faces daunting problems of management, funding and decay. In addition to the key goal of forcing a dedicated local funding source, the bill contains several constructive elements at the price of one very parochial one.

The constructive elements include the addition of two seats for federal representatives on Metro's board of directors, a change that would acknowledge Metro's crucial importance to the federal government's smooth operation. Mr. Davis's bill would also require, sensibly, that Metro hire an inspector general to monitor the system's spending, contracting and operational efficiency. As The Post's recent examination of Metro's mismanagement [front page, June 5-8] showed, an inspector general for the system is long overdue.

The silly part of Mr. Davis's bill is his insistence on blocking a key component of a new residential and commercial neighborhood planned next to the Vienna Metro station, a position at odds with his record as a sensible advocate of dense development around Metro stations. Democratic Reps. Chris Van Hollen and Albert R. Wynn of Maryland have inserted their own meddling provisions that seek to dictate terms for development around the Takoma and Largo Town Center stations.

The focus should be on a dedicated revenue source. Metro, the only major transit system in America lacking such dedicated funding, has scratched and scraped for its annual allotments from area jurisdictions for years -- an untenable way to run a transit system. Lawmakers in Virginia and Maryland have tried to establish a set-aside for Metro from sales taxes and other sources, but they've failed; those political hurdles will not fall easily. Now, facing skyrocketing annual budget increases, there is simply no choice but to carve out dedicated money for Metro in excess of current levels. Mr. Davis's $1.5 billion carrot -- designed to pay for new trains, buses and other capital expenses for a decade -- should do that and more.