As Metro stares down an expected $275 million budget shortfall for fiscal year 2018, Congress is issuing a warning to the agency’s board: Dip into federal funding for short-term needs, and there will be longterm consequences.
Members of the House Appropriations Committee discussed Metro’s financial situation in a new report accompanying an annual funding bill for national transportation needs. In the report, they explain why they decided to give Metro the same appropriation they have since 2008: $150 million annually, designated for “preventive maintenance and capital grants.”
For years, the arrangement has been this: The federal government gives the agency $150 million for long-term investments, but Maryland, Virginia and the District are responsible for the year-to-year operating costs of the system. And each year, Metro has used $31 million of the $150-million to pay for short-term repairs and maintenance.
The exception came last year. Because of Metro’s budget crisis and the growing realization that the transit agency was ignoring urgent maintenance needs, the agency’s board dug much deeper into the long-term federal fund to pay for its short-term needs– to the tune of $95 million.
In theory, Metro could do the same thing for the upcoming budget. Finance committee chairman Michael Goldman acknowledged this week that “there’s some amount of that [fund] which could be used” to cover the shortfall, though he said he would favor using less than was used last year.
“We have to find a happy meeting ground that gets us along the track of reducing our reliance on preventive maintenance money,” he said
But now, Congress has made it clear that the agency is to end the practice — or risk losing a substantial amount of federal funding.
“Should the WMATA board endorse any effort to defer state of good repair maintenance, or move funds from safety improvements to operating expenses in order to address an operating budget shortfall,” the lawmakers wrote, “the Committee will view those budgetary shifts as a lack of commitment to the spirit in which these … funds were provided.”
And there’s more: If the board does decide to take those actions, the lawmakers wrote, “the Committee will reconsider its financial contributions accordingly.”
This is a big deal. First off, it would be disastrous for Metro if an annoyed Congress decided to cut some of its capital funding to Metro next year. The transit agency doesn’t have very many advocates in either the House or the Senate, and it would be unwise to risk irking the few allies it has with a budgetary bait-and-switch.
But even more, some members of Metro’s board are still holding out hope that the federal government will decide to contribute some amount of money to the agency’s annual operating costs, based on the idea that Metro provides the government with a significant service by ferrying tens of thousands of federal workers to and from their offices every day.
Such a funding increase is unlikely to happen in time for Metro’s 2018 budget, but some believe it could be a possibility for 2019 or 2020, depending on how the makeup of Congress shakes out after the election.
“You should never rule anything out,” said Metro board member Carol Carmody, who represents the federal government. “There will be a new Congress, and that’s a heavy lift, but we should try.”
Even the slightest prospect of dedicated operating funds from Congress is enough for Carmody to oppose any efforts to redirect federal capital funds to help fix this year’s budget crisis.
“You’re just shorting one pocket for the other. I don’t think that’s wise,” Carmody said.
Plus, she added, there’s another drawback: “What would we do next year?”