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11/4/2014



Rail News: Passenger Rail

Anti-transit tax policy to impact ridership, FY2016 budget, WMATA says


Washington Metropolitan Area Transit Authority (WMATA) officials anticipate no increase in subway ridership in fiscal-year 2016, which would require District of Columbia-area governments to help provide more funding to maintain the area's transit service, WMATA officials announced in a budget outlook yesterday.

The agency's Finance Committee will begin discussions this week to develop a balanced FY2016 budget, which is not expected to include a fare increase. In addition, the budget is being prepared "in an environment where anti-transit tax policy" has made it more affordable for commuters to drive to work rather than use transit options, WMATA officials said in a press release.

Despite an upward trend in bus ridership and higher rail ridership on a year-over-year basis with the addition of the Silver Line, changes in federal tax law that provide greater financial incentives to park than to use public transportation are one reason that WMATA officials expect rail ridership will be flat in the next fiscal year.

On Jan. 1, a federal transit subsidy was reduced from $240 to $130, which affected private-sector workers as well as federal workers who use SmartBenefits and pre-tax commuter savings programs through their employers, WMATA officials said. The subsidy level will continue through 2015 unless Congress acts during the lame duck session after today's election. Other ridership drivers include regional employment data that forecast a continuation of the recent decline in federal government-related employment.

"We will have to do whatever can be done to control expense and then work closely with the jurisdictions to determine how to provide the same level of service without asking our customers to pay more," said Finance Committee Chairman Mortimer Downey. "We recognize that affordability is fundamentally important to our commuters."

WMATA's board has considered fare increases every other year. Most recently, fare changes took effect July 1, so the agency is not contemplating another increase for FY2016.

While rail revenue has been affected by the federal tax policy that subsidizes parking at 88 percent more than bus or train travel, the policy affects both federal and private sector employees, WMATA officials said.

"The decrease in the transit tax benefit has penalized a broad cross-section of [WMATA] riders — both private sector workers and federal employees alike," said Chief Financial Officer Dennis Anosike. "There's no doubt that some commuters traveling longer distances are now finding it more affordable to drive than ride, and that needs to change."

The business plan would continue the agency's focus on building a safety culture, increasing rider satisfaction, improving service delivery, connecting the region, overhauling WMATA's financial management polices and systems, and strengthening the agency's workforce.

The Finance Committee's discussion this week is expected to focus not only on WMATA's operating budget for next year, but also capital requirements, which are being discussed among the jurisdictions in parallel with the FY16 operating and capital budget process. The funds will support continued system safety and state-of-good-repair work, as well as planned capacity investments in eight-car trains and core stations, agency officials said.



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