‘Finance and Governance’

Studies on Dedicated Funding for Metro – If We Had a Nickel…

September 7th, 2016 3 comments

The region has entered its 30th year of discussion about funding Metro.

Rail Rehab Costs 86 Study

Projected rail structure maintenance costs from the 1986 FCC study.

There has been a lot of talk recently and even more sound bites about the need for more consistent, reliable, and dedicated funding for Metro. But while it may seem like an innovative topic, discussions about Metro’s funding challenges and the need for a dedicated funding stream for Metro have been going on for … decades.  This has been an identified problem and heavily-studied topic since at least 1986 – the year the Oprah Winfrey Show debuted, Top Gun was the highest grossing film, and Ferris Bueller took a day off.

Truth be told, scores of very smart people have expended time and effort and resources to articulate the problems, accurately predict the consequences of inaction, and suggest solutions suitable (and necessary) for implementation.  So when you read “news” about Metro’s funding challenges, the problems it creates, and potential fixes – remember that what you are reading is hardly “new”.  And no refrain is older than the “it’s not the right time”, to which we must remind the reader that for three decades, it hasn’t been “the right time”.  How’s that working out, anyway?

Below are a few of the studies and reports generated on Metro’s funding challenges and possible solutions to closing the funding gap:

Studying – check. So now what? Read more…

Buses and Trains and Vans, Oh My! – How Metro’s Operating Budget Pays for Service

February 22nd, 2016 No comments

Ever wondered how much service your transit fares pay for, or how your tax dollars are spent? Read all about the intricacies of Metro’s operating budget!

How to Get Involved

Do you want a say in Metro’s budget? A public comment period on the FY17 budget (both capital and operating) is now open, and it will end 9am on Monday, February 29th. Please submit your feedback the following ways:

  • Take an online survey at wmata.com/budget.
  • Email your written comments at writtentestimony@wmata.com.
  • Attend a formal public hearing at Metro Headquarters, 600 5th St NW, Washington DC, on Monday, February 22. An Open House will begin at 6 p.m. and the Public Hearing will begin at 6:30 p.m.

Additional communications and outreach efforts will continue over the next few weeks, including notification to local stakeholders and community based organizations; signs posted in Metrorail stations, Metrobuses, and MetroAccess vehicles; surveys sent to a statistical sample of registered SmarTrip® cardholders; ads in local English and non-English publications; and other media efforts including advisories, press releases and social media. The online survey and legal notice will also be available in seven languages.

Staff will summarize and present community feedback to the Board in March, and the Board will use that feedback as a vital input in budget negotiations before adopting a final budget in April.

So be on the lookout for opportunities to learn more about next year’s budgets and to have your voice and ideas heard!

Operating Budget Basics

This is the last of three related posts that attempt to simplify the complex world of transit system funding, and to give Metro’s riders and regional residents some tools to engage in budget discussions. The first post focused on the Capital Funding Agreement (CFA, PDF) and the Capital Improvement Program (CIP, PDF), which together establish a six-year framework for funding projects that improve the Metro System’s safety, reliability, and performance. The second post focused on the annual capital budget, and this post discusses the annual operating budget.

If you walk away from this post with nothing else, the graphic below summarizes the most important points about Metro’s operating costs and who ends up paying the bills:

Metro Ops Funding Scale

The capital budget pays for projects where Metro is building something or buying equipment: purchasing new buses and rail cars, building a new station entrance, improving a bus stop, or buying new parts for escalators. The operating budget pays the costs (salaries, fuel, utilities) of running the system on a daily basis, including all the customer services highlighted in the graphic below:


Metro’s costs of doing business have been rising steadily every year, but unfortunately Metro’s revenues have either grown at a slower pace or been flat. This dynamic tension has created an intense need to fill the gap between costs and revenues, but that need runs up against an opposing pressure not to reduce service levels, increase fares, or impose higher costs on the counties and cities Metro serves (the Compact jurisdictions). Metro staff have developed a draft FY17 budget that appears to balance these conflicting forces, and we are currently running a public engagement process to gather feedback on that recommended budget.

Read more…

Squaring Circles: De-Mystifying Metro’s Budget and Funding Sources (Part Two of Three)

February 5th, 2016 1 comment

As Metro kicks off its public engagement effort for next year’s capital and operating budgets, now is the perfect time to get involved in helping shape the Authority’s priorities for the next few years!


This is the second of three related posts that attempt to de-mystify transit funding and give the residents of Metro’s service area some tools to engage in budget discussions. The first post focused on the Capital Funding Agreement (CFA, PDF) and the Capital Improvement Program (CIP, PDF), which together establish a six-year framework for funding projects that improve the Metro System’s safety, reliability, and performance. This post focuses on how the CIP translates into an annual capital budget, and the next post will explore the annual operating budget.

Read more…

Gut Check – Funding Metro 2025

February 24th, 2014 1 comment

Counting on the Feds alone to fund Metro ignores a long tradition of local jurisdiction funding support – and a ticking clock.


Image borrowed from eRationalmarketing.com. Click for original.

As the region grapples with mounting infrastructure needs (DC, MD and VA) regional leaders are experiencing a bit of sticker shock. That’s because this region has been enjoying the benefits of massive infrastructure capacity increases in transportation, water/sewer, and power that were built in the 1970s and were designed to keep up with growth for half a century.

Those fifty years have almost run out, as has our ability to grow into the capacity built by the previous generation of leaders. And if this region is going to continue its growth trajectory into the middle of this century, we’re going to need to invest in the supporting infrastructure capacities – including funding transit capacity increases via Metro 2025.

Some have argued that funding Metro improvements is primarily responsibility of the Federal government, or at least that the Federal government should lead this effort. That line of argument syncs up neither with the past, present or future – in reality, local jurisdictions have always played a significant role in funding Metro. Let’s lay out the facts about role of local jurisdictions in funding Metro.

Those that monitor the Federal government know well that funding sources for major capital projects are in decline, and there are no guarantees to the legislative process.  Just take a look at this graphic, from the U.S. Department of Transportation’s Highway Trust Fund TickerRead more…

What are the Drivers for Demand of Transit Services?

February 5th, 2013 1 comment

Correlation between weekday Metrorail (monthly total) ridership and the number of jobs in the District of Columbia, FY05 – FY12. Note the “natural log” (ln) of each is illustrated.  The low-ridership outlier is due to Snowmageddon, February 2010.

Demand for public transportation services is not a direct demand, meaning that transit is a means to another end:  a traveler on transit rarely takes transit for the sake of travel but because they have a need for work, shopping, entertainment, etc.  Additionally, many factors determine whether a traveler’s demand for a good or service translates into a public transportation trip or a trip by a private automobile.  Therefore, transit demand is driven by two different sets of factors, the first being the changing demand for goods or services that result in the demand for transportation and the second being the factors that influence which transportation mode is chosen.

For example, having a job creates the need to travel to work.  Yet other factors — such as the levels of transit service between home and work locations, the price of gas, the transit fare, the relative travel time between car and transit, and car-ownership rates – may have some influence over whether the demand for travel translates into the demand for a travel trip. Read more…

How Does Metro’s Subsidy Allocation Work?

November 29th, 2012 No comments

Like every transit agency in the U.S., Metro receives contributions from the jurisdictions it serves to help supplement revenues from fares and other sources.  The District of Columbia, the State of Maryland and local jurisdictions in Northern Virginia have entered into a compact to fund the operation of the Metro’s buses, trains and paratransit. These compact jurisdictions have agreed to split the tab for operating costs each year using a few allocation formulas. The factors have changed over the years, reflecting changes as the rail system was built, populations shifted, and bus service was restructured.

Operating costs are those that occur every year, like a bus and train operator wages and fuel/power for buses and trains. On the other hand, capital costs occur periodically and cover investments in infrastructure, like repairing tracks and purchasing new vehicles.

So, how are the operating costs allocated among the different jurisdictions?  The first step is to take the operating costs for each mode and subtract the revenues associated with each, resulting in net operating cost.  The allocation formulas apply to net operating costs (costs minus revenues).  The remaining steps are different for each mode, illustrated in the graphic below and subsequently described in greater detail.

Simplified diagram of Metro’s subsidy allocation process

Read more…