Fare-free bus plan lacks funding, D.C. finance chief says
REVENUE DEEMED INSUFFICIENT TO PROCEED Council members plan to challenge estimate revisions
D.C. lawmakers are challenging an assessment by the District’s chief financial officer that the city won’t have enough money to fund the fare-free public bus service that is scheduled to start in July.
The $128 million-a-year program was passed with much fanfare in December, with leaders touting D.C. as the largest city in the country to provide free transit. The service was to be paid for by tax revenue that surpassed the city’s annual spending needs.
Council members had few funding qualms when they approved the service in unanimous votes. Excess revenue had become a reliable pool of money before the pandemic, with the District consistently overshooting annual budget projections by hundreds of millions of dollars because of rapid growth and escalating property values.
But projections from the District finance office this week estimated no similar upcoming windfall, catching council members flat-footed after they said they were told in December that the bus program’s funding needs were met.
“It’s my view that the chief financial officer exceeded his authority, and that the law is quite clear,” D.C. Council Chairman Phil Mendelson (D) said. “When the revenue estimates in December came in at the level they did, the bill was funded, or the farefree buses were funded. The CFO reversing that decision now is without legal basis.”
David Umansky, spokesman for D.C. Chief Financial Officer Glen Lee, countered that the office had included a caveat in December that a softening economy at the start of this year could change Lee’s assessment, as it did.
“With the downward revision of the February 2023 estimates, the funding criteria for the [FareFree Bus Funding Emergency] Act will not be met due to lack of sufficient excess recurring revenue,” Lee said in a letter Tuesday to Mendelson and Mayor Muriel E. Bowser (D).
Mendelson, a sponsor of the bus program, said he met with Lee for a briefing on revenue estimates Tuesday during which Lee did not mention the bus program. Lee released his revenue projections hours later, which, Mendelson said, “backs out the funding that the council set aside for free buses.”
He said he and the program’s other sponsor, council member Charles Allen (D-ward 6), have asked the council’s general counsel and budget director to determine whether Lee could legally leave the program unfunded, rather than informing council members of the projections so they could determine what programs should be cut.
“As with every other line item in our budget, it’s the council’s job — not the CFO’S — to make policy decisions about how to spend our dollars,” Allen said in a joint statement with Mendelson.
Allen said Lee’s office has shown a pattern of “vastly underestimating” District revenue. In the 2022 fiscal year, Allen said, revenue was more than $800 million above the finance office’s earlier projections. The city regularly had excess revenue before the pandemic.
In March 2020, it brought in more tax dollars than it spent in each quarter over the past five years, according to Allen’s office. Between the city’s 2015 and 2019 fiscal years, Allen’s office said, revenue increased by $738 million.
Allen said in a statement that vulnerable residents were counting on the program and that the city needed “to do this this year,” but he acknowledged the finan
“Are we going to just find the money somewhere else? That’s not my position. My position is that it was funded. I don’t have to find the money.” D.C. Council Chairman Phil Mendelson (D)
In December, the D.C. Council passed a plan that would subsidize Metrobus rides within the city.
cial projection “could mean a delay.”
Mendelson said he wasn’t considering a delay.
“Are we going to wait a year? No,” he said. “Are we going to just find the money somewhere else? That’s not my position. My position is that it was funded. I don’t have to find the money.”
Umansky said the finance office warned the council in December that while revenue projections were on track to fund the program, finance officials needed to wait until the end of February to make a clear determination on tax revenue available. Bowser, for her part, had opposed the program, saying the proposal needed to go through the city’s budget process for scrutiny because she had funding concerns. Bowser did not sign the law last month that had created the program, which had no legal effect but was a sign of continued disapproval.
In December’s financial estimate to the council, Lee said: “There are real risks to the revenue estimate, should the economy slow or contract, and the funding trigger may not be sustainable if the February 2023 estimate is revised downward from the current estimate.”
As for council members’ charge that Lee is making a political decision, Umansky said the legislation for the bus program stated it could only move forward “provided that the CFO certifies sufficient revenue exists.”
The fare-free bus program initially was proposed to give all D.C. residents $100 in transit credits monthly. When that proved too costly, as well as too complicated for Metro to track, Mendelson and Allen revamped the proposal to subsidize Metrobus rides within the city.
Scheduled to start July 1, passengers at any Metrobus stop in the District would be able to board free without using a SmarTrip card. The program also would expand bus service roundthe-clock on several of the transit system’s busiest routes to help late-night service workers who often rely on expensive ride-share services when Metrobus and Metrorail close. The legislation also created a $10 million-a-year bus infrastructure fund.