Can Metro turn things around?

The Metro board's decision to raise fares in December -- the third increase in 17 months -- has reopened debate over some tough questions that the board has never fully answered: how to keep fares low enough to keep riders and where to find a reliable source of public subsidies.

It has been pointed out, for instance, that a round-trip, rush-hour ride downtown from Montgomery County's future Shady Grove station would cost just under $5 by the new rates. That figure is almost universally called too much, an invitation to go by car and clog the streets.

Still, there is no consensus on how to lower it. Debate on this and other financial issues underscores that Metro is a fragile partnership of eight county and city governments, each with contrasting political priorities and financial solvency, each seeking the best deal for its taxpayers and riders.

For the present, Metro enjoys better financial health than many other U.S. transit systems. But political infighting, fare rises and dollars-and-cents projections such as Shady Grove's have raised concern that Metro could be drifting toward the destructive spiral of declining ridership that has News Analysis News Analysis helped to bankrupt transit in oth- er cities.

Last fiscal year, fares rose twice and ridership dropped 2.6 percent, the first annual loss in Metro's history. Metro estimates that ridership will fall another 2 percent because of the new fares. Added to that pressure are two-digit inflation and the Reagan administration's plans to phase out federal operating aid.

Metro board chairman Joseph Alexander called the new fare rise a quick fix to keep income at pace with costs and predicted another increase in 1982. In the meantime, Metro's financial underpinnings must be rebuilt, he said.

Without that, "I foresee the demise of the system as we know it," Alexander said.

Those are strong words, but they sum up the concern in Metro circles five years after the subway's first leg opened in downtown. Then, area residents looked forward to swift, efficient and affordable public transport. Today, many patrons feel they have less than that both with the subway and the aging bus fleet.

Inflation levels in the last decade, striking particularly hard at transit costs, convinced conservatives and liberals alike that transit cannot pay for itself. The debate now centers on what proportion of Metro's running costs should be covered by fares and how to guarantee that government money that keeps the system alive remains available.

This fiscal year it will cost about $316 million to operate Metro's buses and rail cars. In general terms, fares and other revenues account for about 50 percent of that. About 40 percent comes from the local governments, with federal aid covering the final 10 percent.

In past years, fares accounted for a larger proportion. Metro staff planners hope to hold the revenue-subsidies ratio at 50-50, although there is some dissent among board members.

That 50-50 ratio, of course, does not hold down operating costs. Projections show inflation, new service and the phaseout of federal operating aid pushing the local governments' subsidy and debt service bills -- $149 million this year -- up more than 200 percent to $344 million by fiscal 1987.

That would be intolerable both for Metro and the governments, according to board chairman Alexander. The governments would be hard-pressed to produce that much money without cutting their own programs. Bickering over how subsidy bills should be divvied up and the resulting late payments would hamper the system's efforts toward consistent service.

Some U.S. cities -- Chicago and Atlanta, for instance -- have addressed similar quandaries with regional taxes devoted exclusively, or "dedicated," to mass transit. Such taxes can be on sales, gasoline or payrolls, preferably something sensitive to inflation. Applied to Metro, the reasoning goes, the tax would ensure that money was available regardless of who held office or how strapped their government treasuries were.

"It is the only way to break out of the parochialism that dominates each of the Metro issues, as each jurisdiction tries to protect its own taxes," said D.C. board member Tom Downs. (To meet federal requirements, D.C. and northern Virginia already have reserved for transit the revenue that comes from certain local taxes and fees.)

The idea is simple enough. But regions that have dedicated transit taxes generally lie in a single state and encompass a small number of jurisdictions. Giving Metro such a tax would require concurrence, official or otherwise, from 11 different governments -- four suburban counties, D.C. and three cities in northern Virginia, the states of Maryland and Virginia and the federal government.

The governments often have opposing views of their responsibilities to transit. The District, for instance, tends to see it as a public service and is willing to shoulder high subsidy levels. But Prince George's County might dissent, said board member Raymond LaPlaca: "Out here, we may say police and fire are more important for us than transit, or that education's more important."

All governments would be reluctant to impose new taxes, in whatever form, in a time of heavy inflation. They would also have difficulty agreeing on how much money transit deserved to get from them. Pressure might mount to solve the problem by ordering Metro to cut costs.

Alexander and Metro staff members argue that Metro has already trimmed most of its fat -- 700,000 bus route miles and 111,000 bus pay-hours were eliminated in the last fiscal year, according to Metro staff documents. This year two-car trains were inaugurated on weekends and the number of cars reduced slightly on weekends.

About 80 percent of operating costs go toward staff salaries and benefits. Therefore, making significant additional cuts means laying off people, which means reducing service, according to General Manager Richard Page. Service cuts, of course, conflict with the theory that in economic hard times people need public transit more than ever.

Similar proposals for a regional tax were discussed off-and-on in the 1970s and discarded. Today some Metro officials remain skeptical that the plan can get off the ground. But Alexander said he will try to rebuild momentum toward it, pressing the state governments to join a commission to study the issue as a first step.