The Metro Transit Authority started what is certain to be a major debate yesterday by deciding to seek regional taxes specifically to pay for the annual losses run up by the area's bus and subway systems.
The action came on the same day that a regional task force studying Metro was told that bus and rail operating losses could reach a one-year total of $300 million in 1990 dollars, assuming that fares increase only half as fast as the rate of inflation.
That was the highest of several projections produces by Peat, Marwick, Mitchell & Co., the public accounting firm that is a consultnat to the task force.
It is the knowledge of such astronomical numbers that caused the Metro board to take the lead in seeking new taxes that would remove much or all of the steadily climbing Metro deficit from the property taxes of area jurisdictions.
The board instructed one of its committees to devise an educational campaign aimed at building both the case for public transit and a coalition of area governments and citizens to support it.
That committee, under charimanship of former, Maryland congressman Carlton Sickles, had recommended to the board that a regional transit should:
Be levied by no more than one entity in each of the three major jurisdcitions - Maryland, Virginia and the District of Columbia.
Be sufficient, in combination with federal and state aid, to cover all operating deficits for Metro bus and subway services, plus the local shares of interest on bonds that were sold to build the subway.
Be adjusted annually to make surre Metro impose economies on itself and does not expand just to spend the money it gets from an earmarket tax.
Be in place to finance Metro's fiscal 1979 budget, or by July 1, 1979.
The committee, which also included D.C. Council Chairman Sterling Tucker and Alexanderia Mayor Frank Mann, also suggested that any transit tax respond to inflation, so that its proceeds would not be outrun simply by the passage of time.
The committee also agreed that a single tax could not be imposed uniformaly across the Washington metropolitan area simply because it would be politically impossible to do so. Approval of both Maryland and Virginia legislatures plus the District of Columbia government and, ulitimately, Congress, would be required for such a solution.
That would mean that each of the three major jurisdictions would have come up with its own package. For example, a sales tax on gasoline might be possible in Northern Virginia, a payroll tax might be possible elsewhere.
Nobody suggested that winning approval of such a tax be easy.
"We're at the point where understand the critical nature of this over-all problem," Tucker said. "The first step is to try and get accepted across the region the fact there is a need for such a tax."
The critical nature of the overall problem is that both the District and suburban government have been encountering increasing citizen opposition to using the property tax to finance Metro.
That opposition has grown along with the Metro budget. Futhermore, attempts to raise bus fares to the point where they meet operating costs have proven politically impossible and impractical as well. The most recent fare increase in Northern Virginia, for example, cost Metro about 5,000 bus riders a day.
"I like the idea of attempting to educate the public and build support," Arlington Board member Joseph Woley said. "It seems to me it might be possibble to build a coalition including both the property taxpayer and the transit rider.
"I'm very happy not to keep pushing for higher fares if we can take the pressure off the property tax," said Wholey, who has been a leading advocate of raising fares.
A transit tax would be designed primarily to deal with Metro's operating costs, not the costs of building the subway. Operating costs, here and elsewhere, have risen dramatically in recent years primarily because of increasing wages for bus operators and mechanics.
An experienced Metrobus driver gets a minimum of about $16,000 annually and many make $20,000 or more because of overtime. Bus operator salaries here are tied to a cost-of-living escalator.
In the current fiscal year, the operating deficit for Metro is about $56 million; for the subway it is about $20 million.
But the costs of building the subway also have risen dramatically since construction began in 1969. At that time, Metro's proposed 98-mile system was supposed to cost $2.5 billion.
Because of inflation, strikes, and the energy crisis, among other reasons, that cost estimate has now doubled for a 100-miles system. The most recent Metro estimate is a fraction over $5 billion; Peat, Marwick and Mitchell estimates released yesterday were around $5.3 billion.
Although most of the money for the construction of the subway has come from the federal Treasury, area localities have provided either one-third or 20 per cent, depending on the formula in place at the time construction contracts were awarded. An interim regional agreement had provided funds and essentially guaranteed construction of 60 miles of the proposed 100 miles.
The other 40 miles are under a federally mandated restudy. It is as part of that restudy that Peat, Marwick & Mitchell was hired to provide cost projections.
The projections released yesterday assume the construction of the full 100-miles system, with a few modifications. Other projections, detailing costs for various truncated transportation proposals, will be made later as the regional task force moves in on the hard decisions of what to build and what to cut. The federal government is holding all the cards because it has most of the construction money.
But in the most locally critical area of operating costs, the projections of PM&M show that buses - not the subway - will continue to require a larger percentage of public funds.
All the projections were made in inflated dollars. The total operating deficit for 1990, assumin that fares increase only half as fast as inflation, is proqected at $301.6 million. More than half that, $164.6 million, is for running the buses.
If fares were permitted to increase at the same rate as inflation, and assuming 6.11 per cent annual inflation, the deficit for bus and rail in 1990 would be only $90.7 million, with $72 million of it attributable to buses.
Assuming fares are permitted to keep pace with inflation, a round trip fron Mount Vernon to Farraguat Square (bus and rail) would cost $6.50 in 1990; if fare increases are only half inflation, it will cost $4.15. Today it costs about $2.80.
Francis Francois, a Prince George's County councilman and chairman of the regional task force, said after the meeting yesterday, "Maybe one of the things we should do is nail down right now a formula trying fares to the cost of living."
It is around this and other issues that the regional tax question will be debated.