Category Archives: Transportation

Metro Sales Tax: Bad for Virginia, Worse for Loudoun

by Dave LaRock

The Washington, D.C., Metro system serves three jurisdictions: Maryland, Washington DC and Virginia. The Virginia jurisdiction includes Alexandria, Arlington, Fairfax City, Falls Church, and, starting in 2020, Loudoun County. For several years, D.C.-based interest groups have been pushing for a 1% sales tax increase across the region served by Metro to fill a funding gap currently estimated at $7.5 billion over ten years.

While this may sound like a reasonable proposition to some, when you drill down it becomes clear this is very unbalanced against Virginia and even less equitable for Loudoun County.

Right now there is a funding ratio in place whereby Metro funding needs are divided between the three jurisdictions. This funding ratio is based on track miles, number of stations, ridership, etc. Virginia is assessed 28%, WDC 37% and Maryland 35%. The proposed 1% sales tax would have Virginia paying over half of the money needed to fill the $7.5 billion funding gap. In 2019, Virginia’s share will increase as Loudoun will also start paying a share for the maintenance and operations of the overall system.

But for Loudoun it is far worse. Much of the $7.5 billion funding gap is needed to make repairs that are decades overdue and rightfully should have been completed years before Loudoun joined the partnership. Just to put this in perspective, if Loudoun was a paying member in 2016, the proposed 1% sales tax would have cost Loudoun $74,949,695, and that number is increasing rapidly. In the last 2 years, Loudoun’s sales tax revenue increased 23%; that’s more than the other affected Northern Virginia jurisdictions increased in the last 10 years! If the proposed tax is levied with permission from the General Assembly, Loudoun County would pay at least $80 million per year going forward.

That is a pretty hefty share considering the Metro will only come 1.7 miles to one station past MWAA/Dulles Airport land into Loudoun; MWAA will have 4.9 miles of track and two stations on Dulles Airport land. The total system at that point will be 129 miles with 97 stations. Also realize that Loudoun will not be using Metro’s bus service, and that Loudoun and Fairfax folks are already contributing billions of dollars in tolls and taxes to fund 100% of the Silver line, as well as over one quarter of the 7000 series “New Cars” that will be in service throughout the Metro system by the end of this year.

It is outrageous to ask all Loudoun County residents to pay money into a Metro system every time they purchase a taxable item; most residents use the Metro rarely, if ever.

To a large degree, the high cost of bringing the Metro system to a reasonable state of repair is due to decades of mismanagement. Safety and reliability have plummeted, and so have ridership and revenues. Most of the $7.5 billion total “funding gap” can be attributed to capital projects: WMATA needs new cars and major track refurbishment.

It is essential that as we work to fix Metro, we do not lose sight of the importance of being fiscally responsible and the need to limit taxation. These are basic principles of sound government: Excessive taxation has a negative effect on economic activity and family budgets.

Simply handing more revenues to WMATA without fixing its foundational issues is not a responsible solution. There are significant reforms to Operations and Management that must be made as well. Metro’s new General Manager, Paul Wiedefeld is doing a great job at getting the ball rolling in the right direction, but that’s not enough. Metro has problems that go much deeper than lacking cash. Operating expenses (mostly labor) are growing at nearly twice the rate of revenues and this requires significant changes in the business model. The WMATA Compact binds the three main jurisdictions and governs the management of the system. The Compact is outdated and needs to be revised. In fact, Virginia has already passed multiple revisions which, if accepted by Maryland and WDC, would substantially improve the Compact. Last, but not least, the WMATA Board is too large and is staffed with too many people who do not have the expertise needed to whip the Metro into good shape and keep it that way.

In 2012, Loudoun County supervisors voted 5 to 4 to extend Metro to Loudoun; while doing so, the payment proposition was to cover construction costs by taxing the property around the new rail stations. Fairfax County has a similar arrangement around the Silver Line stations. That is a funding alternative that holds promise. Those who benefit from Metro – riders and station-area developers – and the Federal government should pay to keep the system running.

In closing, the proposed 1% sales tax is bad for Virginia and worse for Loudoun County. Throwing more money at Metro without fixing the WMATA Board and the WMATA Compact ignores Einstein’s observation that doing the same thing over and over again and expecting a different result is insanity.

Dave LaRock is a Republican member of the House of Delegates, serving the 33rd District in Loudoun, Clarke and Frederick Counties.

Business Leaders Demand WMATA Governance Reform

An alliance of Washington-region business groups is calling for a fix for the Washington Metropolitan Area Transit Authority (WMATA) that would create dedicated funding streams for the Metro rail system and a restructuring of the authority’s board.

Twenty-one chambers of commerce and employers groups outlined the proposal in a letter to the region’s political leaders, reports the Washington Post. The proposal is expected to have influence, the Post says, noting that executives with the signatory businesses are frequent campaign contributors.

WMATA has said it needs at least $500 million a year to restore to functioning condition the commuter rail transit system, which has been plagued by maintenance issues, safety incidents, and declining ridership. The letter signatories did not specify a particular funding mechanism.

“We’re not trying to get into the weeds,” said Bob Buchanan, founder of the 2030 Group, told the Post.

One commonly floated proposal is a region-wide, penny-per-dollar sales tax, but Northern Virginians have objected on the grounds that Northern Virginia would wind up paying more than Maryland and the District of Columbia combined.

Describing the Metro as in a state of “crisis,” the letter linked the creation of a dedicated revenue source toward a revision of the tri-state governing compact and a restructuring of the board. States the letter:

We reiterate our strong conviction that any reform effort must include reforms to WMATA’s governing, financial and operational structures. Reform of any one structure alone will not be sufficient. For instance, additional funding for Metro will only be beneficial if it is accompanied by structural changes that give WMATA’s board the flexibility to effectively allocate resources and staff the flexibility to leverage additional resources to make operational improvements.

Governance reforms include “right-sizing” the WMATA board and requiring directors to have expertise in specialized areas, including transit operations, management, finance and safety.

Bacon’s bottom line: WMATA is critical to the functioning of the Washington metropolitan region. After decades of short-changing maintenance, WMATA needs billions of dollars to remain a viable transportation mode. There is no avoiding the necessity for regional taxpayers to cough up more money to restore the rickety system to health. Washington-area residents have been enjoying the benefit of a heavy-rail transit system for years without paying its full cost — now it’s time to pony up. But given WMATA’s dismal history, the NoVa business leaders are absolutely right to demand reforms that will ensure that any new funds are not mis-spent or frittered away in concessions to WMATA labor unions.

Working out a compromise with Maryland and D.C. won’t be easy, but Virginia’s political leaders need to hang tough.

From Roads to Rail a Great Idea… In Theory

Richard L. Beadles, founder of the Virginia Rail Policy Institute, is dissatisfied with the structure of the U.S. railroad industry. While the rail freight industry has done a good job of moving large volumes of freight long distances, he says, it has yielded the short-haul business to trucks, abandoned thousands of miles of track, and built a system that is to some degree incompatible with passenger rail.

Beadles would like to see more cargo traffic shifting from trucks to rail, thus taking thousands of tractor-trailers off congested highways and reducing energy consumption. And he would like to see more inter-city passenger rail service. The solution, he suggests, is to get government more involved at the federal and state level.

“If rail is going to play a larger role in U.S. transportation, only the public sector can make it happen,” he writes in the May 2017 edition of the Virginia News Letter. “The history of great public-works projects, including the interstate highway system, argues in a most compelling way for a strong public role in rail infrastructure and service planning, augmented with commensurate public funding.”

Beadles calls for setting up a statewide Rail Development Authority. If airports, ports, toll roads, bridges and tunnels all have authorities, he says, publicly sponsored inter-city railroad projects should have one, too. “In the long run, a rail authority will be required for the very same reasons that the highly successful Virginia Port Authority was created year ago. The sooner it is created, the better for the public.”

Setting up a rail authority is not an inherently unreasonable idea, although there could be turf issues with the Virginia Department of Rail and Public Transit, the state agency that currently handles inter-city rail matters. Transferring DRPT’s inter-city rail functions and revenue sources to a quasi-independent authority would avoid bureaucratic redundancy. But it’s not clear from Beadles’ account what an authority could accomplish that DRPT does not.

A more interesting philosophical issue is where the money would come from to fund an expanded role for rail. Beadles makes essentially the same argument that backers of mass transit do — that roads and highways are subsidized, so why shouldn’t rail and transit be, too? Writes Beadles:

Virginia appears at first glance to have a public-policy commitment to raise the necessary revenues from users of highways via fuel taxes, supplemented by other fees and charges. In 1986, a landmark transportation funding package brought the “half-cent for transportation” supplement to the state sales taxes. With the effect of inflation over two decades, the “half-cent” has become a major component of highway funding revenue. Thus even a senior citizen in a retirement community, without an automobile, is now paying into the state transportation revenue pot. And now, with the 2007 General Assembly “solution” to future transportation requirements, part of the funding package includes General Fund money.

Beadles is absolutely right about this. Virginia has abandoned the pretense that roads and highways should be self-funding through a gasoline tax and other auto-related taxes. Not only is asphalt-based transportation subsidized in innumerable ways, freight trucking is subsidized by other drivers; tractor-trailers do not pay taxes sufficient to cover the cost of the wear and tear they inflict upon highways. Thus, they enjoy a doubly unfair advantage over rail.

Of course, passenger rail and mass transit are subsidized, too. Virginia budgeted $52 million for inter-city rail in fiscal 2016. So the debate becomes one of arguing that inter-city rail deserves even bigger subsidies because its goals are so worthy. The trouble with such a debate is that there is no practical way to determine what level of support is economically appropriate.

When it comes to paying for roads, bridges and highways, one could devise a Vehicle Miles Driven tax to generate revenues sufficient to maintain the road network. The tax would be adjusted up and down as needed to cover fluctuating maintenance costs. New construction could be paid for through tolls, proffers, impact fees and Community Development Authority bonds. Virginia could construct a pay-as-you-go financing system for roads if the political will existed.

No one has proposed even a theoretical model of how inter-city rail, outside the densely populated Northeastern Corridor and a few connecting lines, could be fiscally self-supporting. At the very least, Beadles needs to demonstrate a positive net social benefit for public rail investments. He comes close with one example — a $40 million contract with Norfolk Southern — but never completes the logic loop.

In 2007 DRPT provided the funds to upgrade Norfolk Southern’s rail line between Manassas and Front Royal with the goal of shifting freight traffic from Interstate 81 to Norfolk’s Southern’s rail network. Under the contract, the rail company is required to divert 76,000 trucks per year above current levels by 2023. That sounds like a lot of trucks. But the reduction averages 208 trucks per day, slightly less than 9 per hour. How much do nine trucks per hour create in congestion costs, and how much economic value (less drivers’ time lost to congestion) would be saved by getting them off the road? Alternatively, one might ask what other improvements the state could make with $40 million, and what public benefits would be attained. Was the Norfolk Southern subsidy a good public investment or not? We don’t know — not with the information that Beadles provides.

Investing more public money in rail might make economic sense. But I want to see a stronger case for it. An even better idea would be to let roads and rail, trucks and railroads, compete on a level playing field by making all transportation modes operate on a pay-as-you-go basis. I have more faith in truckers and railroaders than politicians to make decisions that make economic sense.

$150 Million a Year More for WMATA? Good Luck with That!

Source: Virginia Department of Rail and Public Transit. (Click for larger image.)

Downstate Virginia legislators are inclined to block increased capital funding for Washington’s dysfunctional heavy-rail commuter system unless the Washington Metropolitan Area Transit Authority (WMATA) undertakes serious structural reforms.

WMATA officials say they need about $15.5 billion for capital spending over the next 10 years to work through a massive backlog of deferred maintenance. Virginia’s state-government share would be about $150 million a year over and above the $200 million it allocates annually to operations and capital spending.

“I want value. I’m willing to deliver,” said state Sen. Mark Obenshain, R-Rockingham, in a meeting of the Senate Finance Committee yesterday, reports the Richmond Times-Dispatch. “But I want to see problems solved. And all too often when we talk about solving problems, the easy way to solve it is just throw more money at it. It’s a workplace problem; it’s an efficiency problem.”

Convincing constituents that giving Metro more money is a hard sell when in his district the Robert O. Norris Bridge “is literally falling into the river,” said Sen. Ryan T. McDougle, R-Hanover. “How is it that I can go to my people and say, ‘We’re going to spend money on an organization where we have no control from the state, we have no say so in the administration based on the board is put together? … There’s no way I can justify a vote to spend that kind of money for an entity that we have this little control over and is refusing to change how that structure is done.”

(For the record, the Robert O. Norris Bridge is not “literally” falling into the Rappahannock River. Transportation Secretary Aubrey Layne told the committee that the state does not even consider it to be structurally deficient.)

Ray LaHood, the former U.S. Transportation Secretary chosen by Governor Terry McAuliffe to review WMATA’s performance and governance, told the Finance Committee that he is trying to develop consensus around four areas: WMATA’s governance structure, its funding structure, its legacy labor costs, and maintenance.

The current management team has cut 1,000 of 1,300 WMATA workers, mostly nonunion employees and tightened ethics and nepotism policies. Also, said LaHood, “We’re going to try to fix the governance part so you feel you do have a voice. We can figure out how to fix your bridge and have a good transportation — Metro system — in Washington, D.C., that you can be proud of.”

Bacon’s bottom line: Obenshain and McDougle are absolutely right. Virginia should not fork over one red cent until WMATA can prove it won’t become a fiscal black hole. It appears that the new management team has taken some important steps with the nonunion workforce, but the real challenge will be extracting major concessions from the union. If it chooses to strike, the union can virtually shut down Washington, D.C. The only way — the only way — for Virginia legislators to stiffen management’s spine in a confrontation is to withhold that $150 million a year.

Even if WMATA delivers needed reforms, pumping another $150 million a year into the authority would aggravate an already lopsided distribution of rail and transit revenues.

As can be seen in the Virginia Department of Rail and Public Transit’s fiscal 2017 budget atop this post, DRPT hands out a total of $437 million a year in grants to cover operational expenses and capital spending for rail, buses and handicapped transportation around the state. Of that amount, $303 million already goes to Northern Virginia. Adding another $150 million a year to that sum would favor Northern Virginia even more lopsidedly — boosting its share from 69% of the DRPT budget to 77%.

Where would the money come from? Shifting money from inside the DRPT budget would eviscerate non-WMATA programs, most of them downstate. Most likely the money would have to come from road & highway spending. Virginia Department of Transportation funds allocated to construction spending in fiscal 2017 amount to about $802 million. Taking the WMATA money from roads & highways would reduce construction spending by 19%. Not just one year, but for 10 years.

Even Northern Virginia lawmakers might balk at that.

A Business-Like Approach to Paying for I-87

Proposed route of I-87 linking Raleigh and Norfolk.

Proposed route of I-87 linking Raleigh and Norfolk.

Sen. Frank Wagner, R-Virginia Beach, is the Republican candidate you’d almost forget was running for governor were it not for the occasional newspaper article like the one in today’s Richmond Times-Dispatch. He doesn’t have Ed Gillespie’s financial resources, and he lacks Corey Stewart’s penchant for controversy. But he’s out there, plugging away. As a long-time legislator, his ideas deserve a hearing.

Some of his ideas make sense. He is a fiscal conservative disinclined to gamble with big spending schemes or tax cuts that could disrupt the state budget. “This is not the federal government,” he said at a recent reception in Mathews County. “We cannot print money. We have to balance budgets day in and day out every day.”

But some of his ideas need work. His proposal for jump-starting the economy is to increase transportation spending. Because he’s a fiscal conservative, he would finance that spending through a tax hike, shifting to a sliding scale in which gasoline taxes are higher when the retail price of gasoline is lower, and taxes are lower when the price of gasoline rises.

In the article, Wagner elaborated on his thinking about transportation as a driver of economic development:

Virginia’s transportation network does not foster economic growth, he said, and the state will fall further behind North Carolina without major improvements. For one, North Carolina is planning a highway to connect Raleigh and the research Triangle to Norfolk and the port.

“That’s what business-people do,” Wagner said. “They make strategic investments and expect a return on that investment.”

Another thing business people do is conduct cost-benefit analyses before they make big investments. If anyone has conducted a reputable cost-benefit analysis of Interstate 87 between Raleigh and Norfolk, you can’t find it on the website of the Triangle’s Regional Transportation Alliance (TRA). (If someone knows of such a study, please let me know.) By way of justification, the RTA offers gassy language about investment that would accrue to North Carolina communities along the route (without acknowledging that communities not on the route might see investment shrink) and make it easier for tourists up north to reach the Raleigh area.

The singular virtue that I can see in I-87 is that half the proposed route is already constructed to Interstate standards. Supposedly, the 213-mile Interstate would cost only $1 billion to build. By eye-balling the map, I’d guesstimate that North Carolina would be responsible for building and maintaining 90% of the length. If North Carolina wants to waste its money, well, what the heck, maybe Virginia should be willing to throw in a few bucks to open up a new route for truck shipments from Virginia ports.

But that’s all back-of-the-envelope thinking. The acid test of whether such a project would be an economic boon or drain is whether it could support itself through tolls. Is there sufficient demand for a Norfolk-to-Raleigh connection — perhaps from trucks emanating from the Port of Virginia — that it could pay its own way? If so, and if private sector concessionaires were willing to put their own money into a public-private partnership, I’d be inclined to support the project. Conversely, if business people look at the project and decline to invest their own funds, then I’d be inclined to think that I-87 is just another boondoggle backed by civic boosters angling for Some One Else’s Money.

If Wagner really wants to do like business people do, perhaps he should get business people to pay for the project — and not raise Virginians’ taxes.

John Fishwick Takes on Railroad Mogul in “CSX Train Robbery”

Roanoker John Fishwick launches effort to block "repulsive" compensation package for CSX CEO.

Roanoke attorney John Fishwick launches effort to block “repulsive” compensation package for CSX CEO.

John P. Fishwick, Jr., grew up in a railroading family. His father, after whom he was named, was president of the Norfolk & Western Railway before it merged with the Southern Railway to become Norfolk Southern. The younger Fishwick established a law career in Roanoke, working as U.S. Attorney for the Western District of Virginia in the Obama administration and then starting his own law firm.

But he never lost his fascination with railroads. He has taken up a new cause, blocking the out-sized compensation package of Hunter Harrison, a 72-year-old executive hired by CSX Corp. As a CSX shareholder, Fishwick objects to the company reimbursing Harrison $84 million in compensation he forfeited by leaving Canadian Pacific.

Harrison’s claim to fame is implementing the concept of “precision railroading” to boost profitability of Canadian Pacific. In precision railroading, a railway company monitors, tracks and optimizes rail car and locomotive utilization, allowing more efficient deployment of assets and enabling customers to better plan for shipment arrivals and departures. In merger talks with Norfolk Southern last year, Canadian Pacific dangled the prospect of improved investment returns by implementing precision railroading throughout Norfolk Southern’s rail system. Harrison dropped the Norfolk Southern bid in the face of stiff resistance. Then a few months later, with the backing of outside financiers, he took over as CEO at CSX, Norfolk Southern’s main rival for railroad traffic in the eastern U.S.

Fishwick has created a Facebook page and launched an effort to block Harrison’s compensation package. “By forcing the resignation and termination of long-term employees, while at the same time paying a new CEO exorbitant pay which he voluntarily forfeited by leaving his previous job, CSX is crushing the morale of CSX employees,” he wrote in a letter addressed to other shareholders.

Furthermore, he argues, CSX could be liable for Harrison’s back taxes, which could amount to “a few tens of millions of dollars,” and could expose itself to a Canadian Pacific lawsuit. “We the shareholders deserve to know that someone at CSX has fully reviewed Mr. Harrison’s contract with Canadian Pacific and can explain the non-compete clause in this contract.”

Finally, Fishwick charges, CSX over-estimates the value of Harrison’s expertise in precision railroading.

Precision railroading is Mr. Harrison’s calling card and it seems to focus on running the trains on time and getting better routes. This does not appear to be that unusual a strategy and is not patented. Surely someone else could execute this strategy just as well and far more cheaply.”

The CSX annual shareholders meeting is scheduled to be held June 5 in Richmond. It should be interesting.

Woo hoo, Wonks! Interactive Map Shows Average Commute Times by Zip

Click for larger image.

If you squint real hard, you can see the map above displays Virginia and parts of surrounding states. The color codes mark the average commute time by zip code. The dark purple indicates zips with the shortest average commutes and the pinkish-yellow colors the longer commutes. To view the specifics for any given zip code, check out the interactive map created by, an online auto accessories retailer.

The Washington metropolitan region appears to be the commuting hell-hole of the country. Only the New York and Los Angeles metros come close. Maryland ranks 1st among all states for the longest average commute (31.9 minutes), while Virginia ranks 4th (28.6 minutes). Even the most cursory glance at the map above shows that in Virginia the longest commutes are centered on the Washington metro and outlying jurisdictions.

Interestingly, commute times in the center of Washington, D.C., are relatively short — some in the vicinity of 20 minutes. Commutes are tolerable in zips near the core in jurisdictions like Arlington, Alexandria and even in areas farther out such as Tysons, Reston and Herndon. But average travel times become brutish on the outlying fringes of the metropolitan region, sometimes exceeding 50 minutes.

Urban cores across the state have shorter commuting times. That applies to Norfolk, Richmond, Charlottesville, Roanoke, Lynchburg and Virginia’s smaller metros. Another pattern that strikes the eye  is the line of purple along the Interstate 81 corridor from north of Harrisonburg through Staunton, Lexington, Roanoke, and Blacksburg all the way to Bristol.

There are patches of pinkish-yellow in rural Virginia where, presumably, inhabitants have to drive great distances to jobs — the West Virginia phenomenon.

The map vividly shows that the biggest transportation dysfunction in Virginia is the mass movement workers from the bedroom communities of far-flung Washington exurbs to jobs in the metro core. What the map doesn’t reveal is how to solve the problem, which is rooted in counter-productive zoning and land use policies. This map shows symptoms, not causes. Still, even a map of symptoms has its uses.

Philip Shucet, Transportation’s First Responder

Philip Shucet

Philip Shucet. Photo credit: Virginian-Pilot

Elizabeth River Crossings (ERC), the public-private partnership that built new tolled tunnels linking Norfolk and Portsmouth, has hired Philip Shucet as CEO. His first task, according to the Virginian-Pilot: Fix customer service.

“I’ve got to understand it, then we’ll fix it,” Shucet told the Pilot minutes after the announcement. “But know this – everyone who uses that tunnel is a valued customer, and we’ll treat ’em that way.”

The state contract with ERC has come under fire in recent weeks for its handling of unpaid tolls. The company has imposed late fees and processing fees that socked motorists with bills as high as $18,000, the Pilot has reported. Because the tolling contract is nearly impossible to re-negotiate, Governor Terry McAuliffe has said he would publicly pressure ERC parent companies Macquarie and Skanska to change ERC’s business practices.

Fixing ERC’s customer-relations problems is the latest in a long line of rescue operations. Shucet first made his mark in Virginia as commissioner of the Virginia Department of Transportation (VDOT) when he overhauled procedures to bring in construction projects on budget and on time. After leaving VDOT he rescued the Norfolk Tide light rail system from massive construction cost overruns, and then was called upon to oversee the ticklish implementation of upgrades to U.S 29 north of Charlottesville.

Bacon’s bottom line: Most people working the interstices between the public and private sectors are usually looking to line their pockets by trading on their relationships. Philip Shucet is a different breed. Not to say that he hasn’t done well for himself as a businessman and consultant in recent years, but he could work anywhere in the country he chooses and probably make a lot more money. Fortunately for the commonwealth, Shucet, who lives in Virginia Beach, has chosen to dedicate much of his career to public service and tackling some of the state’s biggest, stickiest transportation problems. We’re lucky to have him.

Update: Neil Williamson with Charlottesville’s Free Enterprise Forum offers a different take on Shucet’s departure from the Rt. 29 Solutions team: “In our three years of observation, we have grown to appreciate the charming manner in which Shucet manages (some might say manipulates) meetings and their outcomes.”

McAuliffe Orders WMATA Review

Governor McAuliffe has ordered a sweeping review of WMATA, the Washington area's train-wreck of a commuter rail system.

Governor McAuliffe has ordered a sweeping review of WMATA, the Washington area’s train-wreck of a commuter rail system.

Governor Terry McAuliffe has announced an independent review of the Washington Metropolitan Area Transit Authority (MWATA), the troubled organization that runs rail and bus systems in the Washington metropolitan area. Hampered by massive maintenance backlogs, high labor costs, safety issues and declining ridership, the authority requires billions of dollars in capital funds and hundreds of millions a year in operating funds to reverse a devastating loss of traffic. There is no consensus on where the money will come from.

Ray LaHood, former U.S. Secretary of Transportation, will lead an “objective, top-down review” of WMATA, said a statement issued by the governor’s office today. Virginia will pay for the review but will not control it. WMATA is governed by an interstate compact between Virginia, Maryland and Washington, D.C.

WMATA’s rail and bus operations move more than one million people a day, making it essential to the Washington-area economy. “Unfortunately,” the statement said, “WMATA today has significant problems that hinder its ability to serve this region’s residents and businesses. It did not happen overnight. It is the result of decades worth of decisions.”

“Everything will be looked at, including operating, governance, and financial conditions,” the statement said. That includes board governance, labor policy, and long-term financial stability. The study will benchmark system costs and expenses, governance, funding levels, cost recovery, maintenance costs, and rail safety incidents. A final report is expected to be issued this November.

The latest fiasco. There was no explanation of what prompted McAuliffe’s decision to launch the review, but news of another management fiasco today illustrates how badly WMATA has broken down. Federal track inspectors have found that the new 7000-series rail cars, which are heavier than the older cars, may be damaging the tracks, reports the Washington D.C. Patch.

WMATA purchased 528 of the 7000-series rail cars in 2013. News reports revealed last year that the cars wouldn’t be used on Blue, Orange and Silver lines because they can’t navigate a steep curve on a stretch of tracks shared by the three lines. Then this year, it was reported that the trains were experiencing failures every 5,000 to 10,000 miles, way below the contract expectations of 20,800 miles.

The decision in 2013 to purchase rail cars that can’t navigate a critical curve, experience failures at three times the contracted rate, and also damage the rail lines is a management failure of spectacular proportions — and the responsibility doesn’t go back decades.

McAuliffe’s decision to act is welcome, even if it’s overdue. The Commonwealth of Virginia cannot continue to dump money into a dysfunctional organization without concrete assurances that the money won’t be wasted.

Update: I was curious about how the McAuliffe administration came to the decision to launch this review but had no insight to share when I made this post. Turns out that the 2017 budget bill called for it, ordering the Secretary of Transportation to “initiate an objective review of the operating, governance and financial conditions” at mWATA.

The review shall encompass the following: (1) the legal and organizational structure of WMATA,; (2) the composition and qualifications of the WMATA board of directors; (3) potential strategies to reduce the growth in labor costs; (4) options to improve the sustainability of employee retirement plans; (5) safety and reliability; and (6) efficiency of operations.

Loudoun County Never Bargained on This

Loudoun County doesn’t even have service on the Metro Silver Line yet, but potential liabilities are escalating beyond levels county officials ever imagined when they signed up to participate.

Metro’s capital needs and operating deficits are growing as the transit system grapples with a multibillion-dollar maintenance backlog, union featherbedding, and declining ridership.

The system’s operating shortfall of nearly $300 million by fiscal 2018 and could double by 2019, said Jim Corcoran, a Virginia representative to the Washington Metropolitan Area Transit Authority (WMATA) board. “If things don’t change, it will be impossible. … We’re at $300 million this year … but next year it’s going to be $500-$600 million.”

WMATA hopes to close the gap through some combination of help from the federal government, the states of Virginia and Maryland, Washington, D.C., and local governments served by the commuter rail system. There is nothing close to a consensus on how to apportion the costs. Many, including Corcoran, said that changes to the regional compact between Virginia, Maryland and D.C., may be necessary to reach a financial agreement.

Writes the  Loudoun Times-Mirror:

According to the Metropolitan Washington Council of Government’s latest projections from October, Loudoun will start to pay Metro around $12 million in fiscal 2019 in annual operating and capital costs. The next year, the number is slated to jump to $50.8 million, then to $58.4 million in 2024 and as high as $82.1 million in 2025.

Phase 2 of the Silver Line, which is still under construction, is scheduled to go into service in Loudoun in 2020. How much more the county will have to pay as its share of keeping the rail system solvent is not known, but it is sure to measure in the millions of dollars yearly.