Hearing of House Committee on Government Reform - The Capital Region's Critical Link: Ensuring Metrorail's Future as a Safe, Reliable, and...
HEARING OF HOUSE COMMITTEE ON GOVERNMENT REFORM - THE CAPITAL REGION'S CRITICAL LINK: ENSURING METRORAIL'S FUTURE AS A SAFE, RELIABLE, AND AFFORDABLE TRANSPORTATION OPTION
February 18, 2005
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Mr. Van Hollen. Well, thank you, Mr. Chairman; and I will be brief, because I am looking forward to the testimony of our witnesses. But I do want to thank you for holding this hearing on a very important issue to our region.
As we all know, people who are out there in traffic or in Metro every day in this region know and, as has been said, we are clearly, from a transportation point of view, one of the most congested areas in the country. And modernizing and upgrading and I believe eventually expanding Metro is going to be an essential part of the strategy for reducing that congestion or, at the very least, at least not getting worse.
The danger is, given the projected growth, if we don't do something on both Metro and other parts of our transportation system, it is not that we are going to improve congestion. We are going to go from a crawl to a dead stop if we don't do something and don't do something about it now.
Now, Metro has been a win-win for this area. It is obviously a win for people who use Metro. It is a great benefit to people who are driving, because those are people taking Metro who are, obviously, not on the roads with the drivers. It is also an essential part of trying to meet the clean air standards in this region, which is something that is always a struggle for this particular area. So I think it is essential the Federal Government do its part in this area.
Metro has been, in many ways, a victim of its own success. Its ridership has doubled, as we heard; and it is projected to increase substantially. I was a regular workday Metro rider for many years, for about 12 years, and I could see over that period of time that it was getting more and more crowded, especially during rush hours. Sometimes a train would come, and you just couldn't get on. It was packed.
So it is essential that we provide the revenue to expand the capacity so we get more cars on the rails, that we get more buses to provide people the transportation links that are essential. Because, if we don't, it is going to hurt our economy, it is going to hurt our quality of life, and this region is going to become a place that is not nearly the kind of place to live that it is today even under the difficult congestion we have today.
So I am really pleased that Metro has come up with a plan. I think the Federal Government has to come up with its part of the $1.5 billion and its share of the $3.4 billion, larger number, and I look forward to working with my colleagues to accomplish that.
Thank you, Mr. Chairman.
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Mr. Van Hollen. Well, thank you, Mr. Chairman.
I mean, I want to pursue some of these ideas that have been raised already with respect to how you would structure a dedicated revenue stream, and also to address the issues Ms. Norton has been raising with respect to the reliability of the current income stream.
First, as I gather, the main idea on the table is some kind of regional sales tax, surcharge that would go into a pool. Has any more thought been given how that would be structured so that the relative contributions that would--the current burdens that are, you know, today provided to the relative jurisdictions for their contribution to the use of Metro would somehow be reflected in the contributions from the different jurisdictions through a sales tax? I just do not know to what extent this idea has been flushed out.
Mr. Kauffman. If, perhaps, I could start, and then refer to Mr. Downey.
Certainly the Blue Ribbon Panel, as was mentioned earlier, mentioned as a key option a regional sales tax; it also offered a litany of other revenue instruments. One of the things that, on the one hand, is seen as very valuable is to have the same instrument applied across the region, the other is recognizing that each locality, each member has a different or best case way of raising some of those dollars.
I would say that yesterday I specifically asked, along with members of the Federal--the Board of Trade, the Greater Washington Board of Trade and the Federal City Council, that we should take that Blue Ribbon Panel and call the regions and the Federal-elected leadership together for a summit this summer to basically begin acting on those items.
A menu is prepared, and now we are calling folks to the banquet.
Mr. Downey. If I could just add to that.
In the Blue Ribbon Panel report, there are analyses of where the needs are and where the funds might come from under different assumptions.
The Panel's overriding view was, though, that Metro service, bus and rail, is a regional asset. And it is very hard to say that someone who lives in Virginia, works in the District and occasionally shops in Maryland is paying in only one place for that. So the premise of our thinking was regionalize it as much as possible. It isn't perfect. The numbers show that the burden would shift a little bit; that could be ameliorated in a variety of ways, but we thought dedication for the resources that have been described, particularly for the ability to plan and finance capital, and regionalization really reflected the nature of the service and
the nature of the agency.
Mr. Van Hollen. Just to followup on Ms. Norton's questions with respect to the reliability to which--with the contributions to the different jurisdictions have been made over a period of time. I mean, do you have any--a chart that would show these fluctuations just as part of an argument for why we would have to have a dedicated income stream? I mean, you were very creative, I guess, in this latest effort to modernize, where you went to the jurisdictions and you got them to agree to sign--binding contracts to make their contributions, and the extent to which they are going to be paying depends on the extent to which the Federal Government makes its contribution.
I guess one issue that obviously arises with respect to the need for dedicated income stream--because, I mean, look, it is going to be complicated getting all these different regions and jurisdictions together to agree on something--is the extent to which the current system is broken and not working, or whether, after at the end of the day, people are really coming through with their funding requirements.
Mr. White. Yes. I will try to shed some more light on this.
I think the biggest effect of what we have had today is all of our assets have been identified--normal replacement cycles have been identified for this $10 billion investment that is now worth $24 billion, and there is a road map of what you need to do to keep your assets in a state of good repair----
Mr. Van Hollen. Right.
Mr. White [continuing]. So that we don't slip into the scenario that Mr. Downey explained occurred back in New York in the early 1980's.
And what has happened thus far is everybody says, that is impossible for us to fund, so we are deferring capital investments. And we have deferred more than $300 million of things that should have been done to date, and that number would go over a half a billion in the next couple of years were it not for this funding agreement. And quite frankly, it required some sort of forcing function to make this funding agreement happen. Everybody looked at one another, said we can't do it, our share is too big, the Federal Government should be doing more, and we kind of kept on drawing ourselves into the ground until we have literally said, we have this rail car contract, it has these options in it, these options expire on this date, the pricing is enormously attractive if we don't exercise these options, and by the way, we can guarantee you that if we don't meet this option date it will be too late and our rail cars will become so crowded that we can guarantee the service will fail.
And it was only that forcing, literally, that gun to people's heads that at the last second did people say, all right, well, I have to do this, and I will do this with great trepidation. And it bought us about 3 or 4 years of time, and we will be back in the same situation 3 or 4 years from now, looking for the same forcing function to make something happen.
And I think that is the dilemma that we are facing. The operating side sort of resolves itself, sometimes you raise fares, sometimes you tweak the service, depending upon what people can and cannot afford on the operating side, but the biggest impact is on the capital side measured in system deferrals, which catch up to you and have a huge impact on service reliability.
Mr. Van Hollen. I think you make a very good case for it. And as we think about this, I think it is also important to find a mechanism maybe for the Federal Government to continue to be a player going forward. I mean, the question is, after you have this income stream where the Federal Government says well, you have taken care of the problem and we no longer have any obligation ourselves, despite the fact the Federal Government should, in my view, for the reasons you stated, it is a unique system where the Federal Government has a unique interest in it compared to other Metro systems. Thank you.
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Mr. Van Hollen. Well, thank you, Mr. Chairman, again; thank all of you for your testimony today.
As I understand what you are saying, compared to other Metro systems in the country, in the WMATA system, riders generally are paying more. The Federal Government is paying more for the reasons we have stated historically. So the one component in the equation that is paying less relative to other Metro systems is the local jurisdictions; is that right, in terms of their input?
Mr. White. I don't know if I would go quite that far, Mr. Van Hollen.
In terms of--I think the distinction here is the extent to which State and local governments empower their transit system--in our case, Metro--to get the first dibs on money without having to put it in competition with other needs assessments that State and local governments do through their annual appropriations process. That is where we come up short. And we are shorter than anybody else in the country, and that is a major limitation. But the extent to which we do get contributions from State and local government, they are pretty sizable, and actually over the last set of years, are higher than what their historical proportion has been to the funding shares of the system.
Mr. Van Hollen. Right. I understand. I am just trying to compare it relative to other systems in the country, not historically within this system. If the riders here are paying relatively more and the Federal Government is paying more, it just seems to me that the other systems--somehow the local jurisdictions are paying less compared to other regions--as a percentage, not that they are not paying a lot.
Let me get on to the issue of funding and look at alternatives to dedicated funding source; and I think the proposal you floated is a very good starting point. But as you know, it is also complicated by the fact that we are talking about multi jurisdictions and a number of other issues.
Is there any way to essentially get the different jurisdictions to make a legally binding commitment to the WMATA system for a particular share of capital costs going into the future that you could hold them to legally, despite their annual appropriations process, and let the jurisdictions then figure out on their own how they go about funding it? Maybe they will fund it out of their existing allocation, maybe they will fund it out of, you know, additional dedicated revenue source they find, maybe they will add it out of general revenue; but is there a way to do that so that you can hold them legally to that commitment? And then you get everybody together and say, OK, we are on board.
Mr. White. We did find that way recently in the form of the Metro Matters funding agreement, where we have a legally binding 6-year commitment where everybody has a share, without there being a specific identification of how each jurisdiction is going to come up with its share, but they put their signature to a legally binding agreement that is subject to the annual appropriation process. So yes, Mr. Van Hollen, that is an option.
I think the Blue Ribbon Panel--and Mr. Downey might want to comment on this--they recognize it as certainly not the most preferred option. The most preferred option, and the one that they believe has the greatest opportunity for success, is some sort of regionally implemented funding mechanism that gets applied and raises money regionally, but they are also quick to identify there are other options to that, including the one that you said, sir, which would be some sort of subregional allocation, and then left up to each of those jurisdictions to figure out how to honor that.
Mr. Downey. I would only add to that that the panel also felt whatever was committed to regionally ought to be matched federally.
Mr. Van Hollen. All right. Thank you.
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