Maryland Democratic lawmakers say they will propose a bill to provide increased, dedicated funding for Metro without raising taxes, and their plan drew an initial, supportive response from Gov. Larry Hogan (R).
The initiative means that both the Maryland and Virginia General Assemblies will consider major legislation early next year to help the transit system, a development Metro General Manager Paul J. Wiedefeld called “extremely positive.”
The Maryland bill — co-sponsored by Dels. Marc Korman (D-Montgomery) and Erek Barron (D-Pr. George’s), and Sen. Brian Feldman (D-Montgomery) — would commit Maryland to raise its annual contribution to Metro permanently by $125 million a year if certain conditions are met.
Hogan spokeswoman Amelia Chasse said the administration will “reserve final judgment.” But she added that the proposal “appears to be very similar” to a four-year Metro funding plan Hogan released in September.
That “is certainly a positive development,” Chasse said.
The Democratic bill provides for Maryland to increase its subsidy to Metro providing that Virginia and the District do the same, whereas Hogan wants the federal government to contribute as well.
The Maryland lawmakers made public their plan after Virginia’s outgoing governor, Democrat Terry McAuliffe, unveiled legislation Monday to raise three taxes in Northern Virginia to help give Metro $150 million a year of the earmarked, permanent funding it says it needs.
The Maryland and Virginia bills both face obstacles, especially from Republican legislators in Virginia. They are insisting that Metro carry out rigorous reforms to restrain expenses and improve financial management before giving the system additional money.
But Wiedefeld welcomed the new developments and contrasted today’s active debate over Metro with the lack of interest a year ago.
“We have to step back a bit and think where we were last year,” Wiedefeld said in an interview. “The fact that we’re talking about what’s happening in Richmond and Annapolis for Metro, I think, is huge. All these things, in my estimation, are pointing in the right direction to get us to where the region needs to be for the system to support the [area’s] economy.”
Metro is the nation’s only major transit system that does not receive significant revenue through a tax or other earmarked source. That means it has to seek subsidies every year from multiple jurisdictions, which makes it difficult to make long-term plans. Wiedefeld and others have said it needs an extra $500 million a year in dedicated funding to ensure safety and reliability.
In an apparent swipe at the District, Wiedefeld stressed that Maryland and Virginia should be allowed to come up with their own ways to give Metro dedicated funding.
That approach contrasts with the position taken by the District, which has pushed strongly for a uniform, regionwide sales tax or similar levy.
“Every jurisdiction needs to respect the others,” Wiedefeld said. “Virginia and Maryland have made very clear they need to work through their own politics, their own strategy for how they’re going to come up with their dedicated funding.”
The Maryland Democrats’ bill provides first that the state continue its current contributions to Metro’s capital budget, which pays for investments. Then it calls for diverting an additional $125 million per year from the state transportation trust fund to Metro, providing that the District and Virginia commit to providing the same amount.
The plan would not require tax increases because the money would flow from the trust fund. It would reduce money available for road and bridge construction, which has been a concern of the Hogan administration in the past.
The Democrats’ proposal is similar to Hogan’s September plan in that it calls for Maryland, the District and Virginia each to increase their contributions by $125 million a year,
One difference is that the Democrats’ plan would make those annual contributions permanent, whereas Hogan would pledge them for four years. But Chasse, Hogan’s spokeswoman, said the governor is “not against expanding the time frame for this funding.”
On the other hand, Chasse said, Hogan continues to insist that the federal government increase its commitment.
Hogan “stands by the conditions he originally laid out requiring Virginia, the District of Columbia and the federal government to all commit to equal investments. Metro’s future cannot be secured unless all partners are equally committed,” Chasse said.
To improve oversight of Metro, the Democrats’ bill would require that the state transportation secretary or another official from the department serve as one of Maryland’s two voting members on the Metro board. The legislation also would strengthen the agency’s inspector general.
“There will be an even more significant financial contribution from Maryland, and that needs to be watched very closely,” said Korman, who described the plan when asked by a reporter whether Maryland would consider legislation similar to that proposed in Virginia.
“I think it’s great that Virginia has started to move forward, and it’s time for Maryland to do the same,” said Korman, who helps lead a group of Annapolis lawmakers focused on Metro issues.
In Virginia, McAuliffe’s plan drew a negative response from Del. Tim Hugo (R-Fairfax), chair of the GOP caucus in the Virginia House of Delegates. He said Metro should carry out pension, cost and financial management reforms and submit a detailed, long-term business plan before it gets any additional money from taxes.
Metro “wants the dessert but they don’t want to eat the vegetables,” Hugo said. “If you’re going to give them more money, you’ve got to do the reforms first.”
He said McAuliffe had reneged on commitments to require measurable reforms before seeking more funds. The governor instead said Metro would get extra money from Virginia only if it replaced its 16-member board with a five-member “reform board.” Such a board might be expected to carry out reforms similar to those recommended by Hugo, but it would not be required to do so.
In another response to the Virginia proposal, D.C. Council member Jack Evans (D-Ward 2), who also is chair of the Metro board, called the McAuliffe plan “a good starting point” but said it wasn’t raising enough money.
McAuliffe proposed that Virginia raise its contribution by $150 million a year because that is 30 percent of Wiedefeld’s request for $500 million, and 30 percent is Virginia’s approximate share of Metro’s capital costs under a long-used formula.
But Evans and other District officials believe the formula is unfair to the District, which currently pays the most at 35.7 percent.
“I applaud the governor for putting forth a plan that is both long-term and produces new revenue,” Evans said. But he added: “It’s only $150 million. He’s relying on the current formula, in which Virginia pays the least . . . It’s not enough money.”
Evans also expressed concern that under the proposal, bonds that were issued to raise funds for Metro would have to pay higher interest rates than desired.
That was strongly disputed by Virginia Transportation Secretary Aubrey Layne. He said the Northern Virginia Transportation Authority has succeeded in floating bonds at attractive interest rates using a financing package similar to that recommended in the McAuliffe plan.