That traveler’s comment about Metro’s proposed budget is from Monday’s online chat. It made me think back on the recent history of Metro’s budget proposals and the many changes between proposal and final adoption. Budgets are estimates of revenue and expenses. They can be made to reflect optimism about some things and pessimism about others. Metro budgets tend to start off bigger than they wind up, but that doesn’t mean the final result reflects reality.
In my decade as Dr. Gridlock, I’ve seen these outcomes: The board may decide to do pretty much what the Metro general manager first proposed; the board may be dissatisfied with the plan and rework it; the board may ask riders what they think of a menu of possibilities; or the board and the transit staff may decide they don’t need to ask so much of the riders after all.
For a variety of reasons, that last result occurs quite frequently. This could be one of those years.
As you will see in the timeline below, it’s far from being the most tumultuous year for Metro’s finances. Even if the board were to adopt the budget as it was presented to riders — which I doubt — it’s unlikely that the results “would make riding Metro untenable for most people,” as the commenter suggested, even though such a decision certainly would drive away some riders.
Look under fiscal 2010 and 2011 to see the high end of discomfort for both the transit planners and the riders. (Remember the emergency surcharge and the “peak-of-the-peak” fare?)
The most consistent thing about the process is that projections for revenue and expenditures are always being adjusted. Some of those adjustments were a stretch. Transit officials are pressed by board members to limit the financial effect on the paying customers and on the local governments that support Metro. They often made what now look like fanciful projections about how many people would pay to ride Metrorail.
One little comfort: The Metro board can’t adopt a budget that’s going to hurt the riders any worse than the one it advertised before the public hearing without going through a new round of public review. Still, a year that starts calmly doesn’t necessarily end that way.
The preliminary budget in December 2006 said Metro faced a $116 million shortfall on a $1.2 billion operating budget, raising the possibility of fare increases, reduced service and higher contributions from taxpayers. By March 2007, Metro had scrapped the plan to raise fares and fees while changing the opening hours on weekends. General Manager John B. Catoe Jr. said he would work to close the budget shortfall by eliminating positions and tightening spending.
In September 2007, Catoe proposed fare increases to take effect in January 2008 — about six months earlier than normal — to reduce the size of the fare increases. In December, the Metro board approved the increases in Metrorail fares and parking fees. Those were the first increases in four years and the largest ever for the transit authority. They took effect in January 2008. The plan reflected a compromise offered by Maryland board members to lessen the effect on suburban and long-distance riders.
As of January 2009, the transit staff’s budget proposal included $87 million in service cuts. In May, the board voted to avoid all but a handful of Metrobus service cuts by tapping a rainy-day fund.
But in January 2010, the board decided to close a projected shortfall in this budget by imposing a temporary surcharge of 10 cents on all fares. This took effect in March 2010. Transit officials said public comments had influenced the board’s decision to raise fares instead of cutting services to cover the shortfall.
In January 2010, transit officials proposed covering a projected shortfall for fiscal 2011 with another fare increase, as well as service cuts and staff reductions. Rail riders faced a 15 percent increase, while for bus riders, it could be a 20 percent increase.
In spring 2010, the board adopted what became the largest fare increase in the transit system’s history. These were the same increases proposed in January, and they took effect that July. But the board also approved a 20-cent “peak-of-the-peak” surcharge for some rush-hour riders to start in August. The board decided against a proposal by interim general manager Richard Sarles for $8 million in service cuts after hearing protests from riders. Asked to choose, many riders said during public hearings that they preferred fare increases to service cuts.
In January 2011, Sarles proposed an operating budget of $1.4 billion without fare increases or service cuts, but he asked local jurisdictions to fill a projected $72 million revenue gap. The jurisdictions did not take this well.
In April 2011, the board decided to hold public hearings on possible service cuts and other measures to close the gap. Later in the month, Sarles announced that the $72 million gap probably would be more like $66 million. He attributed the reduction to a combination of lower projections on expenses and higher projections for ridership.
Rising gas prices probably would further increase ridership and revenue, Sarles said, “We are doing better on ridership.” (Metrorail ridership peaked in 2009 and began a long-term decline, though the downward trend has not been in a straight line.)
In June, the local jurisdictions caved, agreeing to close the gap in the operating budget so that Metro would not need fare increases or major cuts in service.
In late 2011, Metro Chief Financial Officer Carol Kissal warned that “fare increases are coming,” but the staff did not plan to propose service cuts.
In January 2012, the staff proposed bus and rail fare increases of about 5 percent, along with higher parking rates. But it also proposed eliminating the peak-of-the-peak surcharge. Jurisdictions were asked to increase their subsidies by a total of $47 million.
In April 2012, the board approved the fare and fee increases, despite protests from riders. It also eliminated the peak-of-the-peak surcharge.
In January 2013, the staff said no fare increases or service cuts would be proposed for the new fiscal year. The transit authority asked the local jurisdictions to cover a projected shortfall of $27 million in the $1.65 billion budget.
In a remarkably smooth process — especially compared with the previous year — the board approved the budget in April.
In December 2013, the staff proposed a rail fare increase that would average 3 percent and a daily parking fee increase of 25 cents to support an operating budget of $1.75 billion. The board decided to broaden the discussion about revenue to include such options as a 4 percent rail fare increase and charging cash-paying bus riders as much as $2.10.
After holding the public hearings on the menu of options, the board decided to go with a fare increase that averaged 3 percent. It also set a $1.75 flat fare for Metrobus.
The draft budget presented in December 2014 did not include fare increases, but it called for local jurisdictions to increase their subsidies by 10.3 percent to cover operating costs. For the first time in years, the budget projected no increase in revenue from riders.
In January 2015, board members discussed the option of fare hikes and less frequent train service to balance the budget. But after a smoke-filled train was stranded in a tunnel outside L’Enfant Plaza, the board decided not to put fare increases or significant cuts in service on the agenda for public hearings and look for other ways to balance the budget, including cutting administrative costs and shifting money from the capital budget to the operating budget, while tamping down the request for increased subsidies.
Among those who turned out for the springtime budget hearings were commuter rail riders who use the Transit Link Card to get a discount on their Metro connection. The original Metro budget would have eliminated the card, but the board eventually agreed to keep the TLC, granting riders a small victory.
As they prepared for a budget presentation in fall 2015, Metro managers said fare increases would probably be part of the package. But after Metro hired Paul J. Wiedefeld as general manager, the idea was dropped. Wiedefeld cut the operating budget by $80 million. The board held a lightly attended budget hearing to get public comment on some proposed changes in service. Many riders protested the plan to eliminate their ability to add value to SmarTrip cards aboard buses without providing a convenient alternative. The Metro board eventually put the plan on hold, giving riders another small victory.
Last fall, Wiedefeld proposed a 10 cent increase in the rush hour rail fare and a 25 cent hike in off-peak fares. Bus fare would go up 25 cents. The daily parking fee would increase 10 cents. Most rail lines would have less frequent service at rush hour and some bus routes would be cut. The jurisdictions were asked to increase their subsidies to help close the $290 million gap in the $1.8 billion operating budget.
After presenting the public with fare and fee hikes and service cuts in line with the general manager’s proposals, the board held a public hearing. But transit officials also said they are considering the possibility of again shifting money from the capital budget to the operating budget. The capital budget is for repairs, rebuilding and replacement of equipment, so transit officials are reluctant to make these switches and consider them short-term fixes at best. Meanwhile, the local jurisdictions have agreed to give Metro the extra subsidies Wiedefeld requested.
That’s the story — so far.