Washington Metropolitan Transit Authority officials are mulling measures to close its historic $750 million budget gap starting next summer, looking to increase funding to avoid thousands of layoffs and reduced operating hours.
Across Washington, D.C., Virginia, and Maryland, transit leaders have been working to detail future financial planning with an initial briefing on the budget challenges scheduled for Thursday. As a result of teleworking employees over the pandemic, Metro predicts an operating deficit of over $700 million in fiscal 2025.
The transit system survived the last year after WMATA received more than $2.4 billion in emergency pandemic relief aid, but aid will run out by July 2024.
Metro officials are attempting to fill a financial hole by asking regional leaders for an increase in funding, warning of possible hiring freezes, employee layoffs, and slow train wait times as Metro struggles to manage the ridership increase over the past year.
"I don’t see a scenario right now where the notice doesn’t happen and where the hiring freeze doesn’t happen," Metro General Manager Randy Clarke said Monday during a briefing.
In a Metro report released this week, slated to be presented on Thursday, the agency says it could see $50 million in additional fare revenue if ridership returns to pre-pandemic levels and $95 million in one-time savings for only next year.
Officials also say they could close part of the gap by using funds from the capital program to keep operations running. Capital funds are normally used to replace vehicles and update equipment on the rail and bus systems.
Metro’s capital budget and operating budget are from separate sources of money. Documents show the potential to transfer either $60 million, $199 million, or a maximum of $345 million.
The proposed document warns not to rely on transferring money to solve the budget gap crisis, as it threatens to reduce funding for train damages and repairs, zero-emission services, a new all-electric 8000-series fleet that is expected to replace older trains, and other projects.
“However, increased use of preventive maintenance transfers reduces capacity for other capital investments in the long-term,” the document from the Finance and Capital Committee reads.
While Metro leaders are concerned about the lack of funding for new train operations, the transit agency is still reeling from years of disruptions in service after pulling and reinstating dozens of 7000-series Metro cars.
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Starting in October 2021, the 7000 series was pulled due to a federal investigation into a derailment. The National Transportation Safety Board moved to reintroduce the cars in December 2021 before finding additional problems. Now, the agency has been bringing back its 7000-series rail cars to the fleet, with Metro announcing in February it will spend $55 million to re-press all 5,984 wheels on its 7000-series trains over three years.
To combat the series of disruptions and fund an increase in train frequencies, Metro’s board voted to increase fares for the first time in five years. Taking effect in June, Metro eliminated peak and off-peak pricing on weekdays before 9:30 p.m., and the maximum fair increased from $6 to $6.50. However, Metro rail base fares were reduced to $2, down from the $2.25 base fare during weekday peak periods.