>WMATA Long Term Funding – Deja Vu?

>It looks like to present the long-term funding issue to stakeholders, all WMATA would have to do is update the 2003 “Metro Matters” campaign information and hit “resend”. It’s the same issue as five years ago, but with larger numbers, including a 32-year-old system instead of a 27-year-old system.

Last time, WMATA cut a proposed $12 billion 10-year capital improvement plan down to $1.5 billion over 6 years (2004-2009), then divided up the funding requirements by jurisdiction, creating the “Metro Matters” program. For FY 2008, Metro Matters provided around $500 million in infrastructure renewal and capital investment, including upgrades to the Metrorail system to allow 8-car service, renewing rolling stock and track structures, and rehabilitating bus rolling stock and maintenance facilities.

Now that the program is about to end, we need to at least find the money to fund at the same level we’ve been at for the past six years. Last time, we cut a $12 billion dollar capital need down to $1.5 billion of “bare bones” needs. We continue to have a $11.1 billion dollar capital need for the long term health of the system.

This time, if we fail to purchase enough rail cars, for example, the old 1000-series cars will be at the end of their design life, and will have to be retired. These 296 revenue service cars represent about 27% of the operating fleet. Imagine all 6 car trains suddenly operating as 4 car trains, or all 8 car trains as 6’s. Fortunately for WMATA, the next set of train cars is much fewer (76), about a decade newer (1981), and was rehabilitated just a couple of years ago.

This is a big funding priority for WMATA, though I don’t know where the money is going to come from. Stay tuned.

Some rough numbers to give you a feel for where the funding could come from.  DC’s share of $1 billion per year under the normal WMATA funding formula is likely to be around half, or $500 million.  DC’s expected revenues in 2010 are around $2B for property tax, $800M for undedicated sales tax, $50M for car tax, and $1.4B for income tax.
To gain $500M from these sources (assuming static effects only – I’m not that sophisticated), each of these taxes would have to increase by 12%.  The static effect assumption probably means that tax rates would have to increase by more than this in order to gain the revenue needed, since the increase in tax rate may reduce the tax base.
I think it’s more likely that WMATA will reduce the amount needed, and DC will find a way to pay its share of “Metro Matters Still” or whatever they will call it.
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About perkinsms

I'm an engineer and father interested in transit, parking and economics.
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6 Responses to >WMATA Long Term Funding – Deja Vu?

  1. Brooke says:

    >Are you going to comment on the economic bailout issue?

  2. Michael says:

    >I’m not really an economist, and when I dabble in economics, it’s mostly on the microeconomics side (“wrong about certain things”) as opposed to the macroeconomics (“wrong about things in general”) side. There are a lot of good macroeconomics blogs out there that comment waaay more intelligently than I can.My take is that if we’re going to put $700B at risk, then we better have some accountability, and we should have higher top marginal and capital gains taxes to pay for it.The accountability is to preserve our constitutional system of checks and balances, where the other two branches can have some say in how government does its job.The higher marginal and capital gains taxes are to make sure that the people that gain so much from our financial system and readily available credit contribute to its stability.

  3. Dharm says:

    >What’s likely to happen is that anything that is related to “state of good repair” that is replacing worn out equipment or parts will be prioritized. The part of the program involving projects that expand the capacity of the exisitng Metrorail system (there’s nothing in the plan that deal with system expansion) will likely be deferred.

  4. Michael says:

    >So about $1B for replacing the 300 railcars that are going to be at end of service life, plus unknown figure for replacing buses at the end of service life, plus track, switch and capital equipment at end of service life, but no additional railcars, buses, etc?Sounds like we’re going to be hurting for system capacity.

  5. >I don’t know how Metro can make all of these improvements and implement the Silver Line at the same time. Some of the bus load can be removed by contracting out bus services. (But with stronger contracts than the ones Fairfax County has with Veolia.) I suspect that this would reduce costs a little.Metro can also increase the amount of advertising. When I got off at Huntington, I saw lots of room for ads in standard frames. From my travels to Pentagon City, I know that advertising can be doubled in the tunnel under Hayes St. True, this won’t create a lot of revenue, but every little bit helps.

  6. Michael says:

    >The silver line is funded from a different source of money. The project is going to be funded by an extra local property tax from a district adjacent to the construction, toll revenue from the Dulles Toll Road, whatever transportation funding Virginia comes up with during the next legislative session, if any, and USDOT “New Starts” funding. None of the money for building the silver line will come from WMATA.Additionally, WMATA will not be in charge of construction, as Metro Washington Airports Authority has hired a contractor to do the construction. WMATA will play a role in specification and final acceptance of the project, but won’t be involved too much in construction. Some of the effort DC has taken recently to replace bus lines with DC Circulators appears to be a way to break off and operate its own bus system again after so many years of accepting bus service through WMATA.I’m going to put in a question to WMATA about increasing advertising space available. WMATA operates its advertising through a contractor, CBS, and I have obtained a “media kit” which describes advertising campaigns and prices for the Washington market.Every little bit helps, but you can’t let the little bit distract you from the big picture that these are very large numbers and extra advertising is going to be about 1% of the solution.

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