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Dispute among District leadership over Metro funding threatens landmark Virginia plan

D.C. Council Chairman Phil Mendelson (D) is leading a group of council members fighting to lower the city’s contribution to a historic Metro funding deal, saying the funding formula is unfair.
D.C. Council Chairman Phil Mendelson (D) is leading a group of council members fighting to lower the city’s contribution to a historic Metro funding deal, saying the funding formula is unfair. (Andrew Harnik/AP)
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A dispute between D.C. Mayor Muriel E. Bowser and D.C. Council Chairman Phil Mendelson over how much money the city should give Metro threatens a regionwide funding plan endorsed Saturday in a landmark vote in Virginia.

Bowser (D) and council member Jack Evans (D-Ward 2) want the city to commit to $178.5 million a year in new, permanent funding for the transit system, officials said Wednesday. That’s the total anticipated in the Virginia legislation, which aims to give Metro dedicated revenue totaling $500 million a year.

But Mendelson (D) and five other council members sent Bowser a letter late Wednesday saying the city should give Metro only $167 million a year. The letter also says the District should contribute no more than Virginia and Maryland, contrary to the Virginia plan that stipulates each jurisdiction make a proportional contribution based on a funding formula that takes into account things such as ridership, population and number of Metro stations.

Breakthrough in Virginia on Metro funding: Lawmakers approve $154 million

Repeating arguments made by city officials in the past, Mendelson and the council members said that formula is unfair to the city, partly because the District has a smaller population than the Virginia and Maryland suburbs served by Metro. The District, however, has 40 Metro stations, compared with 26 in Maryland and 25 in Virginia.

“The District’s share should be equal to the dedicated funding from the Commonwealth of Virginia and the State of Maryland,” the letter said.

In addition to Mendelson, the letter was signed by council members Kenyan R. McDuffie (D-Ward 5), Vincent C. Gray (D-Ward 7), Brianne K. Nadeau (D-Ward 1), Mary M. Cheh (D-Ward 3) and David Grosso (I-At Large).

The dispute threatens a regional accord because the Virginia bill says the state will not provide additional money to Metro unless the District and Maryland also contribute larger amounts.

The District infighting is likely to have an impact on legislative efforts in Maryland to increase the state’s contribution to $167 million a year from the $150 million included in a House bill and endorsed by Gov. Larry Hogan (R).

Bowser’s office confirmed she will ask the council to provide Metro with the amount proposed by Virginia.

“The Mayor’s budget will fully fund Metro with $178 million of dedicated revenue,” Chief of Staff John Falcicchio said. “We will need everyone to be open to how we get there in order to fund the Metro system our residents deserve.”

Evans, who chairs the Metro board and the D.C. Council Committee on Finance and Revenue, said he would prefer the city pay no more than the two states, but it was too late to achieve that goal.

New dispute over cost of fixing Metro pits District against Virginia, Maryland

“Although I agree with the sentiment of Mendelson that the dedicated funding should be split equally among the jurisdictions, we have passed that point,” Evans said.

“The District must come in at $178 million, which is our share of the formula. If the District stays at $167 [million], Virginia has a provision in its law that negates its contributions. As such, the dedicated funding proposal would fall apart, and Metro would be left with nothing,” Evans said.

Evans said D.C. Chief Financial Officer Jeffrey DeWitt also agreed the city should contribute $178 million. DeWitt’s spokesman said he only comments on such issues during the public budget process.

The Federal City Council, a leading business and civic organization, criticized Mendelson for his position.

“We’re disappointed that the [D.C. Council] Chairman is trying to force the conversation about the funding formula by taking a very counterproductive position to solving the funding and governance issues that [Metro] is facing,” said W. Edward Walter, chairman of the group. “The Chairman’s position threatens to derail the real progress we are seeing throughout the region. We applaud the Mayor and Councilmember Evans for their constructive leadership on this issue.”

The legislation approved in Richmond provides for the state to give $154 million a year on the condition that the District and Maryland meet their “proportional” obligations to reach a total of $500 million a year.

Metro has said it needs $500 million a year in new, dedicated revenue from the three jurisdictions to ensure safety and reliability. The money would go to capital investments in new rail cars and buses, replacing other equipment and upgrading track, power systems and other infrastructure.

Under the Virginia plan, the District would contribute $178 million and Maryland would give $167 million. Virginia Gov. Ralph Northam (D) has signaled he will sign the bill, although he plans to propose amendments to change the sources of the state’s funding.

But the letter from Mendelson and the other council members said the Virginia plan runs counter to an agreement in the Metropolitan Washington Council of Governments, which said the jurisdictions’ shares should be equal. It also differs from an agreement a decade ago in which the three jurisdictions agreed to equally divide the burden of matching a $150 million annual federal subsidy to Metro.

Still, the formula calling for the District to pay the biggest share, followed by Maryland and Virginia, has been used for years for a majority of the three jurisdictions’ subsidies.

“The formula would require the District to pay 35.7 percent, or $178.5 million per year, which is approximately $36.3 million more than what Maryland and Virginia would contribute,” the letter said. “Yet the District has only 32 percent of MetroRail’s ridership, 32.5 percent of the track miles and 15 percent of the region’s population.”

The letter warned it would be necessary to raise “the sales tax, property tax and possibly other taxes” to cover the cost of the Metro funding, but said the city was willing to do so.

“Because our tax base is smaller than either Maryland’s or Virginia’s, we will have to raise our rates higher, which will be a competitive disadvantage,” the letter said. “We support doing this, however, recognizing the value of the transit system to the region and the importance of the District, Virginia and Maryland contributing equally to the system.”

In Maryland, the debate in the legislature in the coming weeks also will be over whether to commit as much to Metro as Virginia wants.

So far, Maryland is on track to approve $150 million — the total in the bill passed by the House of Delegates and endorsed by Hogan.

But many Democratic legislators in Annapolis, along with a coalition of Metro supporters, are hoping the Senate will commit to the $167 million foreseen in the Virginia plan.