Metro’s costs are growing faster than revenues, and the agency may find itself in increasingly difficult financial shape unless something changes.

Graphs from WMATA.

If current trends continue, WMATA’s costs will grow 6% a year while revenues only grow 1% a year, creating a larger and larger need for local governments to pay more, according to a presentation the WMATA Board will discuss Thursday.

While transit is a vital service in our region and one that’s worth paying for, it’s not realistic for local governments to keep paying a larger and larger share of their own budgets into this one service when cost growth exceeds inflation or the level of growth in local GDP.

WMATA CFO Dennis Anosike and the other staff preparing this presentation seem to have stopped trying to pretend problems don’t exist. In fact, there’s a whole slide entitled, “KPIs are Clear — Metro Must Improve,” referring to the “Key Performance Indicators” the agency uses as management metrics.

About 70% of the forecast growth comes from adding staff or raises for staff; MetroAccess, the regional paratransit service, makes up 10% of the growth, and opening the Silver Line’s Phase 2 accounts for 8%. Fuel, contracted services, and other things comprise the rest. There are also unfunded benefits and pension liabilities of $2.5 billion.

According to the presentation, WMATA would either need to get cost growth down to about 2% while keeping revenues the same, or increase revenue growth to about 8% a year, or some combination, in order to keep the local subsidies growing at 3% a year total.

What to do?

Is it possible to keep subsidy growth to 3%, and if so, how? This presentation doesn’t answer that specifically, but talks about a mix of “operational efficiency” like reducing the number of staff and outsourcing some functions, saving money on supplies and utilities, other revenues like retail in stations, and changes to service.

The presentation notes that WMATA’s labor contract is up for renegotiation soon. There’s a constant tension between the need to pay good wages to help families reach and stay in the middle class, pay which also encourages skilled people to stay in their jobs, and the fact that in some years wages and benefits have risen faster than on local governments’ payrolls or for private sector jobs.

If WMATA and the union can’t reach an agreement, it goes to an arbitrator; in the past, arbitrators have awarded significant raises on the grounds that Metro could raise fares, even if that would hurt riders (and ridership). The most recent contract garnered praise for giving raises but also requiring workers to pay into their pensions.

MetroAccess paratransit rides have started growing again. A few years ago, WMATA instituted some rules (which disability advocates decried as painful cuts) to limit paratransit service more closely to the legally-required level, serving people at the times and in the places when transit service runs. The agency also tried strategies to encourage people with disabilities to use the buses and trains when possible.

A separate presentation for Thursday looks at more strategies to keep people using “fixed-route” service, like more “travel training” which teaches people with disabilities how to get around on the bus or train, more alternatives to the vans such as local taxis, stricter restrictions, and more.

The board will also discuss proposals to move more “non-regional” bus service, bus routes which aren’t as much a part of a holistic regional network of important routes, to the local jurisdictions; while that just shifts costs around between governments, it could stabilize the bus costs and services inside WMATA. (More on this later.)

Don’t cut service

As the presentation notes, 6% of the region’s new households and 14% of the new jobs are near Metro stations, and Metro boosts local tax revenue by $200 million a year. The fact that Metro keeps driving economic growth shouldn’t be lost on decision-makers.

Among the presentation’s fairly exhaustive list of options is “potential targeted service adjustments to improve productivity.” There are indeed ways to optimize service to work better, but it’s important to avoid a situation where we gradually erode transit service until we find it far harder for people to live car-free or car-light.

Already, rail service has degraded with slowdowns to fix the tracks, more single-tracking, long weekend headways, and Metro’s (now seemingly dormant) proposal to cut service; Metrobus also has seen its share of cuts over time and, worse yet, the buses are just more delayed.

The region can keep transit service at a high level and keep costs growing at a reasonable rate. It needs to be a political priority to do what it takes (once we better know what that is) to make it happen.

David Alpert is Founder and President of Greater Greater Washington and Executive Director of DC Sustainable Transportation (DCST). He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He lives with his wife and two children in Dupont Circle. Unless otherwise noted, opinions in his GGWash posts are his and not the official views of GGWash or DCST.