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Tapping Taxpayers Is Their First Choice

That seems to be the working philosophy of the Metro board when it comes to raising fares. According to a story in today’s Washington Post:

“Metro's leaders have warned that they might have to raise fares because of the poor economic climate. Last year, the agency consolidated bus routes, laid off hundreds of employees and tapped its rainy-day fund to close an even larger budget deficit, but it avoided raising fares. Board members acknowledge that the choices will be tougher this time.”

"There is nobody who wants to raise fares, not a single one of us," said Peter Benjamin, chairman of the board's finance committee. "The fare decision is essentially the last one in that series of things. It's only when you have exhausted all other possibilities that you get down to service and fares." (emphasis added)

The Post article then reports:

“As part of a compromise vote that raised fares in January 2008 for the first time in four years, the board agreed in principle that fares should increase with the rate of inflation every other year.

“Those fare increases, which are expected to amount to about 6 percent, are still open to public debate, but the budget forecast assumes $37.5 million in additional revenue from inflation-adjusted fares.”

But why get Metro riders upset when you can reach into taxpayers’ wallets for ever larger subsidies?  As the Post reports, “Slightly less than half of Metro's operations funds come from governments in the region.” However, the Post also reports, “The forecast anticipates that there is a "low probability" of an increase in the subsidy from those jurisdictions, largely because they are facing their own shortfalls.”

According to the numbers in the county’s financial reports, Arlington County’s Metro operating subsidy for FY2010 will be $20.5 million. Assuming 55% of the subsidy comes from residential property owners, the residential share of the subsidy is almost $11.3 million. Divided by 29,000 residential properties means a subsidy of about $389 for each residential homeowner.*

In addition, the financial reports show the FY1999 subsidy was $6.6 million, and grew by 164% to $17.4 million in FY2008. That growth was significantly faster than the increase of inflation.

A director of MetroRiders.org thinks that taxpayers should be picking-up any increase in Metro's operating expenses. According to the Post:

“But an official of a riders advocacy group wants participating jurisdictions to increase their support as fares go up. Jack Corbett, a director of http://MetroRiders.org, said there is an inherent conflict in the way Metro's board is organized because the jurisdictions that subsidize Metro appoint representatives to the board.

"So they're caught in a box," he said. "Given the huge gap, both the jurisdictions and the riders have to be flexible, because there's no fat left in the system from what we can find."

If Metro is looking for savings, they may want to consider a RIF of employees making more than $100,000, scrapping their public art program, and scrapping their so-called NextBus effort. But as Metro board member Benjamin noted in the Post story, it’s only after you can’t squeeze taxpayers any harder that you have to consider “other possibilities” and “get down to service (cuts) and fares.”

HT Wayne Kubicki

*UPDATE (9/9/09) Mr. Kubicki suggests the subsidy number should be $189 (first computing the Metro subsidy as a percentage of total real estate taxes paid as a percentage of all real estate taxes, and then multiplying that percentage by the estimated average single family residenial tax bill of $4,499). However . . . assuming that only 55% of real estate taxes are paid by residential property owners, and using the average real estate taxes per single-family residence, I still arrive at a Metro subsidy per residential property owner of $340. Perhaps Arlington County's superb number-crunchers in the Department of Management & Finance can resolve the difference by including the Metro subsidy per capita/homeowner in the Manager's proposed FY2011 budget next February.

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