Board members are expected to roll back much or all of a cost-reduction proposal at a Thursday meeting. That plan had aimed to save nearly $500 million by closing 19 Metro stations, eliminating weekend rail service and cutting bus service by half. While those cuts are likely off the table, Metro warned the stimulus money was a temporary fix.
“Without service cuts and layoffs triggered by the budget shortfall, we are now able to serve our riders and businesses at least through the first half of this year,” Metro General Manager Paul J. Wiedefeld said in a statement. “But we are far from out of the woods, without sufficient revenue to cover all of next fiscal year.”
He added: “While the choices may not be quite as severe, there is still enormous financial pressure on our funding jurisdictions, and ridership and revenue is likely to return very gradually, so we have tough choices still ahead.”
A spokesman for the Federal Transit Administration, which is responsible for distributing the $14 billion Congress earmarked for transit agencies, said Friday the agency has not announced how the money will be doled out.
Metro officials said they expect the bulk of the $610 million can only be spent after July because of congressional limitations.
The money will cover much of Metro’s financial holes. It should stop many of the buyouts Metro is offering to meet a $176.5 million shortfall this fiscal year, and it should spell an end to what one board member termed a “doomsday” budget.
Like many transit agencies across the country, Metro has lost hundreds of millions of dollars in revenue amid the coronavirus pandemic. The transit agency is projecting to lose nearly $550 million this fiscal year from parking, advertisements, fares and other revenue as the virus keeps people home because of telecommuting arrangements, job losses or fears of virus exposure on public transportation.
Federal stimulus money has kept Metro operating despite a lack of riders. A first round of federal aid, which Congress passed in the spring as part of the $2 trillion Cares Act, gave Metro $767 million. That money continues to help the agency operate at nearly normal levels and should last until about March, officials say.
But another massive gap looms between then and July 2022. Budget officials expect only slight ridership improvement this year and are projecting a deficit of nearly $671 million. In September, the transit agency announced buyouts to retirement-eligible employees to help cut 1,400 positions and lower costs.
Unsure of whether Congress would pass a second stimulus, Metro’s board in December began planning for the July 1 start of the next fiscal year, when the transit agency would be forced to enact its most dire proposed cuts.
Even as Metro began making its grim plans, board members held out hope Congress ultimately would come through with another stimulus. That happened Dec. 27, as Congress included billions for transit agencies in its stimulus package.
Officials say the new federal money will likely keep the agency running through the end of the year.
While Metro might have escaped the worst of a looming budget catastrophe, new funding issues have emerged that could require additional federal help or service cuts.
Even more than revenue, Metro relies on local governments for millions of dollars in annual subsidies. In the next fiscal year, Metro is counting on Virginia cities and counties, the state of Maryland and the District to provide 3 percent more funding this year.
It’s unknown whether they will be able to meet that commitment. Local and state governments also are struggling financially amid the pandemic and Congress didn’t include stimulus money to help them.
Transit officials have warned that Metro would be forced to make additional cuts if local jurisdictions don’t provide more funding, cautioning that the bailout doesn’t solve all of the agency’s financial problems. They also say Metro could be in the same position in December.
“We will need additional federal relief to avoid service reductions next fiscal year as the region stabilizes,” Metro Board Chairman Paul C. Smedberg said in a Friday statement, in which he also thanked the region’s congressional delegation and Sen. Mark R. Warner (D-Va.) for help in securing the funds.
Metro’s budget planners are working on a new financial plan for board members to review and discuss Thursday at a board meeting. The budget planning process lasts until April, when the board will vote on the budget.
The stimulus is expected to provide $830 million for transit in the Washington region. Nearly $220 million is expected to go to other transportation providers, including county bus transit — such as Montgomery County’s RideOn and the Fairfax Connector — and commuter rail such as Virginia Railway Express.
Montgomery County Council member Evan Glass (D-At Large), who serves on the council’s Transportation Committee, said RideOn is counting on the federal aid, but officials have not been told what their transit system will receive.
“The residents who have been hardest hit by the health and economic impacts of the coronavirus are also the ones who are still taking public transit,” Glass said in a statement. “These funds are critical to maintain existing service levels so that hard working families can continue getting to their places of employment.”