Sales tax, labor outsourcing proposed for Metro funding
The chairman of Metro’s board of directors is hailing General Manger Paul Wiedefeld’s call for dedicated funding for long-term repairs and lower labor costs for the troubled transit system, but the union representing most Metro workers said it is “bad for the region.”
Board Chairman Jack Evans proposed on Thursday a regional 1 percent sales tax on the Maryland, Virginia and D.C. jurisdictions serviced by Metro to secure a $500 million-a-year funding stream for the nation’s second-busiest mass transit system.
“Everyone in the region has a vested interest in Metro,” said Mr. Evans, who also serves on the D.C. Council.
However, Amalgamated Transit Union Local 689 said any attempt to lower labor costs by hiring contractors to fill union jobs would “demoralize the workforce in a race to the bottom.”
Late Wednesday, Mr. Wiedefeld released a slate of proposed changes aimed at saving the cash-strapped subway system from financial and operational ruin. According to the 10-year
plan in his comprehensive report, the general manager said Metro needs a new business model and $15.5 billion over the next decade to remain “safe, reliable and affordable.”
“While Metro has $25 billion in total unfunded capital needs, WMATA will require $15.5 billion of this amount over the next 10 years for critical capital projects,” the report says, using the acronym for the agency’s full name, Washington Metropolitan Area Transit Authority.
That lack of capital funding over the decades has left the system in disrepair, and forced Metro officials last year to pursue a systemwide rehabilitation that has been the bane of riders trying to get around the region.
Mr. Wiedefeld proposed that regional leaders find an annual $500 million stream of dedicated funding for longterm capital repairs to the system. He noted that Metro is still one of the only major American transit systems without dedicated funding for capital repairs. But he stopped short of telling Maryland, Virginia and the District how to come up with that money.
Mr. Evans, Ward 2 Democrat and Metro Board chairman, said the District’s chief financial officer had determined that a regional 1 percent sales tax in each jurisdiction Metro serves would generate $500 million to $700 million a year.
That proposed tax would have to be approved by the county governments in Virginia and Maryland, as well as the District. The sales tax idea, which has been floated before, has generally not been well-received in Virginia.
Mr. Evans acknowledged that the tax idea could generate considerable grumbling in Virginia but said complainers should think about the region as a whole and the benefits of Metro. The system is a boon for the regional economy with housing developments, restaurants and other businesses being built near stations.
“It is an economic driver,” he said of the transit system.
Mr. Wiedefeld also is hoping to reduce worker costs by switching from a pension to a defined contribution program, such as a 401(k), and by opening some jobs to nonunion employees.
Metro is facing a $1 billion unfunded pension liability as well as $1.8 billion in other retiree benefits.
The proposed use of contractors for certain projects instead of union workers raised the ire of ATU Local 689, which represents more than 12,000 Metrobus and Metrorail workers.
“Paul Wiedefeld’s proposal for WMATA is bad for riders, bad for workers and bad for the region,” the union said. “Instead of offering real proposals to improve the system and win riders back, Wiedefeld has, once again, pitted riders against workers in an attempt to balance the agency’s budget on the back of WMATA’s hardworking employees.”
The union said outsourcing some Metro jobs would make the system less safe, less reliable and more costly, and that Mr. Wiedefeld has not been responsive to worker needs.
“Instead of opening a dialogue with WMATA’s workforce on how to improve service and fix the system, the general manager has chosen to go around our negotiated contract and bargain in bad faith through the media,” the statement said.
But Mr. Evans said even the unions need to cede something to make Metro work again.
“What they have to recognize is that … everybody’s got to give something,” he said. “The alternative is no system.”
The plan also proposes a rainy-day fund equal to 10 percent of the system’s annual $1.8 billion operating budget for emergencies such as severe weather. It also would cap the operating budget increase at 3 percent as a way to balance out the extra funding needed in the capital budget.
The Coalition for Smarter Growth, a local group pushing for more transitoriented development, applauded the plan.
“The general manager’s plan is the best we’ve seen to date,” said Stewart Schwartz, the group’s executive director. “His statement is bluntly honest about the situation and we generally endorse his proposals, although we will need more information about some of them.”
Mr. Schwartz said the honesty of Mr. Wiedefeld’s plan “represents our best opportunity to develop shared facts and understanding about the challenges and best fixes for the system in time for legislative action on funding next year.”
The group also said regional leaders need to step up and find more money for long-term repairs.
“For too long, our elected officials haven’t made Metro’s state of good repair needs a priority — year after year approving a regional transportation plan without fully funding Metro capital needs,” Mr. Schwartz said. “Metro is the backbone of our transportation network and regional economy and, as such, merits the funding needed to fully restore the system.”