The D.C. Council’s vote Wednesday to sharply roll back Mayor Vincent C. Gray’s proposed budget for the city’s fledgling streetcar system could imperil the system before it even begins service, project advocates said.
In fact, Gray spokesman Pedro Ribeiro said the move threatened to “derail the future of the streetcar.”
“Using this incremental approach, it could be 30 years or 40 years before you get any kind of system that’s up and running and integrated. What’s the point of that?” Ribeiro said. “You either invest in it or you don’t.”
The council, backing a proposal by Chairman Phil Mendelson (D), dramatically reduced a generous recurring revenue stream approved last year that streetcar supporters say is crucial for the project.
But Mendelson and several council colleagues said restraint makes sense given problems with how the program has been run by the District’s Department of Transportation thus far. Mendelson’s allies said the council can add more funds — if they are warranted — during future annual budget deliberations.
Mendelson argued in his budget proposal that the council is “concerned about DDOT’s capacity to effectively manage the project. Given these concerns, it would not be prudent to double the project budget,” as Gray (D) had proposed.
Gray had called for spending $884 million for the program over the next six years, up from about $400 million approved by the council last year. Instead, Mendelson is proposing to spend $400 million on streetcars during the coming six years, plus an additional $187 million for a bridge replacement along H Street NE, site of a long-promised streetcar line that is still being completed.
Following Mendelson’s lead, the council voted to instead use the money for a far-reaching package of tax cuts for District residents.
Council transportation committee Chairwoman Mary M. Cheh (D-Ward 3), whose committee endorsed Gray’s full six-year budget request, said Wednesday that the vote does not demonstrate diminished council support for the project. The streetcar is “an extraordinarily important economic development tool,” but the system “has been delayed and to my mind significantly mismanaged,” she said.
But council member Tommy Wells (D-Ward 6), a longtime streetcar supporter who voted against the budget, said cutting back on planned funding will lead to more, not fewer, delays because the city will have to pull back from its effort to hire contractors to build the wider streetcar network as planned. He said concerns about “any previous mismanagement by the current mayor” should not be “foisted” on a future mayor by rolling back funding plans.
Beyond the initial six-year spending plan, Gray administration officials say it is the council’s structural change in the way the annual funding is calculated that would do the most long-term damage to their vision of seeing streetcars rolling on tracks throughout the District.
Last year, the council voted to reserve 25 percent of projected local revenue increases in future years, based on calculations using next year’s numbers, for the streetcar project. That represented a vast financial commitment. Within a few years, more than $200 million would be set aside annually, and that number was expected to keep growing to more than $500 million a year in 2025.
The council voted to upend that formula with an arcane — but potent — tweak. Instead of taking 25 percent of the difference between any future year’s revenue and whatever the total is in 2015, it would instead use only the difference between revenue from year to year. That would range from $44 million to $67 million annually over the next decade or so, according to current projections.
Gray’s budget director, Eric Goulet, said that change would blow a hole in the streetcar budget. According to Goulet’s figures, the city would need $1.3 billion to complete the first 22 miles of the streetcar system. But if Mendelson’s proposal is adopted by the council, the city would set aside $460 million.
Building an even larger system of about 37 miles would cost $3.1 billion, according to Goulet. But under the plan the council supported Wednesday, the city would reserve $668 million for that purpose by 2025, he said. The figures are for what the city calls its Integrated Premium Transit System, which includes Circulator buses.
“It’s a huge difference,” Goulet said. He added that rising property values along the lines would boost city revenue. “The value of those corridors would increase dramatically,” he said.
The vote Wednesday undercuts the administration’s effort to address council members’ accusations about mismanagement, Ribeiro said.
“We realize that DDOT is limited in its ability to develop large projects like this,” he said. That’s why officials have been seeking an experienced outside partner to manage the system’s construction, he said. “Now we won’t be able to go down that road. . . .We don’t have the revenue stream anymore.”
Ribeiro said Mendelson was “mortgaging the city’s future in order to provide tax cuts for those who don’t need tax cuts.”
But Mendelson said the proposal approved Wednesday does nothing but “support continuation of the streetcar program,” and noted that, legislatively speaking, the reductions in planned spending are “light years away.”
“I think we’re doing everything to support this, except banking money in 2019 and 2020,” Mendelson said.
At the same time, Mendelson argued that the roughly $3 billion in projected streetcar funding “is not sustainable, nor is it the best use of District resources.”
“Without this proposed change, by 2018 the operating funds set aside for the streetcar project would roughly equal the District’s annual revenue growth” and only keep soaring from there, Mendelson said.
While the council supports the streetcar initiative, “setting aside such a large portion of operating funds prevents implementation of other worthy programs and initiatives, such as the broad-based tax relief for District residents and businesses proposed by” the city’s Tax Revision Commission, Mendelson said. The cuts will help low- and moderate-income residents and reduce the city’s average tax rate from 4.9 percent to 4.5 percent, he said.
Wells argued that transportation costs weigh heavily on poorer residents and that the planned streetcar system is crucial for “transit equity” because the city controls the price of the ride, unlike on Metro. “Many people cannot afford to ride the Metro system on minimum wage,” Wells said.
Mendelson also called on Gray to “restore confidence in DDOT’s ability to manage the project” by providing solid plans for avoiding wasteful spending on maintenance facilities and problems connected to bridge replacements.
The council is scheduled to take a final vote on some details of the budget proposal June 11.