Robert McCartney: Welcome to Think Regionally, a podcast on Washington area issues sponsored by COG. I'm your host, Robert McCartney. I spoke for an hour with Clark and Mercer about DMV Moves and how it could lead to a landmark overhaul of the region's public transit. The challenges are well-known and are not limited to the metro rail and metro bus systems run by WMATA. For instance, the region has multiple local bus systems in Northern Virginia and suburban Maryland, which have varying standards and don't always mesh well with each other. Here's Clark.

 

Randy Clark: If we can all work together, we can be more cost-efficient, which that's not a Republican Democrat idea, that's everyone idea. Then we can create better service for everyone, ideally get more people on transit system and then have a better overall experience. So a good example would be we don't have a regional fare policy. We have some transit operators that are zero fare. Then people also then say, "Metro, you've got to raise your fares." I think there's an inconsistency there, as an example. We've got some fares that there's a transfer penalty and the others there is pre transfer. We don't have the same fare program in the region on what kids are. Some are under five and some are under 18. That's not a regional approach to transit. It's a fragmented, Frankenstein approach.

 

Robert McCartney: WMATA also has a multi-headed governing structure that has been wieldy at times. The system has to answer to four masters. The district, Maryland, Virginia, and the federal government. Here's Mercer.

 

Clark Mercer: No business would go to four different boards of directors to get their budget passed each year. That's insane, right? And I talked to folks that are in the business committee. I said, "Hey, what if you had to go to four different boards of directors that changed every year and maybe one year you'd have a board of directors that maybe doesn't even like your business or doesn't prioritize your business as much as the previous?" That's what Randy has to do each year. He has to go to the capitals in Annapolis and Richmond. He's got to go to DC and he's got to talk to the feds. And yeah, they change all the time and their priorities change all the time.

 

Robert McCartney: Unlike almost every other major American transit system, WMATA has never had a guaranteed stream of funding such as from a portion of a sales tax or similar levy. Six years ago, after extensive debate in the region, WMATA did receive a commitment from the three jurisdictions to provide $500 million a year, but it was only for capital funding. That is long-term investments in infrastructure and not for day-to-day operations. It has proved to be insufficient.

 

Randy Clark: In 2018, there was a very significant effort, there's no question about that, but it was very capital focused. That was really what it was about, and the place has fallen apart in a lot of ways. So it was really staying in good repair and the idea that the system was becoming unsafe because of the maintenance aspect. So at the time, seemingly 500 million was a big lift, but I think in retrospect today, 500 isn't what 500 was then. It was also not indexed. So the purchasing power, we've already lost 20% of the purchasing power of the dedicated funding for capital that was put together 2018, 2019.

 

Clark Mercer: Obviously COVID was a big wake-up call in terms of the financing for Metro. But what we've learned and what I think folks are realizing is that Metro's finances were never set up correctly at the beginning of Metro as a system 50 years ago, 60 years ago, and COVID only exacerbated that. So it's kind of called the region's hand to come together and find a solution.

 

Robert McCartney: It's important for the region to get this right, because quality public transit is central to so many of our goals.

 

Clark Mercer: I was in Richmond the last 10 years and spoke with a lot of companies. One of them, Amazon when they came to this region and they came a big reason and a big part of their incentives that the state provided was making sure folks could get to Metro. Opened up a new station, putting a pedestrian walkway to Reagan National Airport. And I've heard firsthand from CEOs and company leadership, the importance of transit and getting folks to be able to get to and from work and their homes. And so I know from an economic development standpoint, if we're going to continue to grow and if we want to continue to be competitive and more competitive, making sure folks can move around this region's important. Obviously from an equity standpoint and livability standpoint, everyone being able to have that freedom to move around, transit is the answer. And we're sitting a few feet away from my boardroom and I've got elected officials from across the DMV that come in and have passed some pretty bold pronouncements in terms of environmental and energy goals that they'd like to see this region accomplish. And you're not going to accomplish those if everyone's sitting in traffic for multiple hours a day, right?

 

Randy Clark: We have to come to a conclusion what we're going to be as a region. Are we going to decline? Are we going to continue to be economically competitive? Are we going to basically fund our region's values? We say our region's values are sustainability, economic development, economic inclusiveness, equity. Transit does that equal to or better than almost every other public policy thing there is. So we are going to just have to step up and realize that things cost money to do them well. We are arguably the best or one of the best transit systems in the United States. Do we want to keep that and grow or do we want to decline?

 

Robert McCartney: COG and WMATA formally launched DMV Moves in May. It is scheduled to propose its vision for a comprehensive regional transit plan in May of 2025. The initiative is guided by a 23 person task force comprising top elected officials from throughout the region. Two advisory groups are also part of DMV Moves. One is made up of government administrators and transit providers, and the other represents business labor and community organizations.

 

Clark Mercer: When we've pulled together our elected officials, leaderships, mayors, supervisors, elected officials at the state level from the House of Delegates in both Maryland and Virginia and executive and legislative branch leadership, so both governors and the mayor's teams are involved. So we have all the right stakeholders at the table talking. We have two work groups. That's every chief administrative officer, chief financial officer, every operator of bus and transit systems in this region talking, and then every kind of private and nonprofit stakeholder. All your chambers of commerces, your environmental groups, your labor groups. We want everyone at the table. The last thing at the end of this effort, we want anyone to be able to say is, "We didn't have input and we weren't at the table." We're going to try our best to find consensus, but we want everyone's voice involved along the way.

 

Robert McCartney: And who's speaking for riders and commuters, how are they being represented?

 

Clark Mercer: There are a couple of dedicated committees that we have here at COG that are rider committees. So riders have their own committees at the table. We've got folks with disabilities that also have dedicated committee here at COG that we work with WMATA on, and they've got a seat on the stakeholders' group as well.

 

Robert McCartney: The initiative began with a first time ever joint meeting of the boards of directors of COG and WMATA.

 

Randy Clark: I think it's pretty symbolic and pretty astonishing that the WMATA board and the COG board never actually met before formally. So I think that alone shows the seriousness of this effort and then to create this task force, which is arguably, as Clark said, all the key people in this region together. And the other part I like about it is there's a transparency element to this, which is the task force meetings are a public meeting and that wasn't ever done historically here as well. So that is good. The sunlight exposure is good there.

 

Robert McCartney: While a key goal is to secure reliable long-term funding for transit, the first step is to determine what kind of system we want.

 

Clark Mercer: Obviously, Metro is a big part of that and Randy will talk about all that they provide on the rail and the bus lines, but we also have a dozen transit operators in this region that operate buses. We've got MARC and VRE on rail and we'll talk about the combination of reasons why now is the time to come together and talk about what the vision is for transit in this region, what we want to look like in 20 to 30 years. And then once we can define what we want to be when we grow up, we can define how much that costs, how we pay for it, and how we manage it.

 

Robert McCartney: Before asking the public for more funding, it's important to ensure that transit systems have already done as much as they can to raise revenue and reduce costs.

 

Randy Clark: When people say you've got to cut service, I say to them, "What do you want me to cut? Do you want me to cut the rush hour service?" Which basically is now coming back really pretty full? No. "Do you want me to cut the weekend service where we're carrying more people now than we did before the pandemic?" Well, no. "Special event service?" Well, no. "Midday or evening service, which is high, high importance for people, especially low income people of color, getting to work opportunities off conditional nine to five hours or getting to school or medical appointments?" No. So that leads to no, on all the above. More people want more stuff and we can't afford what we have today, but this idea that fares are going to magically solve the problem, they are not. We just increased fares 12.5%. I can't comprehend if we would raise fares next year. Quite frankly, we got lots of people to want us to go fare free. I'm not saying that's going to happen either because we collect hundreds of millions of dollars in fares. There's nothing really left for us to cut. I got in here, so a new GM, right? Last GM cut a bunch of stuff. Now I'm the new GM, I saved $150 million on our capital program. My first year we saved $95 million in operating, and last year we sold another 50. Literally, there's nothing else to cut. Almost all of our expenses are labor costs and you've got to pay people to run trains and buses and fix them and do tracks and all the other stuff. There's really not a lot left to even be discretionary at this point. So it's really service. We were funding service and what service levels do we want?

 

Robert McCartney: What are the main things that got cut?

 

Randy Clark: Oh, this year we did some consolidation, office consolidation stuff. We did some stuff. We got rid of some consultant stuff that nice to have, but with lean times. Every staff member taking a 0% pay increase, which in one of the most competitive economic times, I can't do that again, but we're pulling out every rabbit out of the hat, if you will, we can, but there's just the hat's not big enough. There's no rabbits left, right?

 

Robert McCartney: What's been done to discourage fare evasion?

 

Randy Clark: So fare evasion, when I got here, the number one thing people wanted to talk to me was fare evasion. The only thing people wanted to talk to me over and over and over. And so we basically swapped out all the gates. We'll have it done by more or less the end of the summer, early, early September, but we're both say 65% done and of those stations we're already reduced fare evasion by over 70%.

 

Robert McCartney: Given all that, the solution has to be some new revenue source.

 

Clark Mercer: Obviously when you look at sustainable funding, you can't run a business if you don't have confidence that it's going to be funded for out years. You can't plan on the capital side, capital projects on the out years. You can't talk about workforce of the future without steady, reliable funding. So I'm not going to sit here and say, "This is the funding source or this is the tax revenue that you would look towards." The first thing we have to do is agree on what we want, and once we get consensus there, we can agree on how to pay for it, but clearly we need some kind of dedicated revenue. And when you talk and you wanted to talk about governance and things like that, I mean that will all be part of that. If there is a new stream of revenue that comes in, how is it managed moving forward? But there's certainly the appetite to talk about it and we'll leave it to the elected officials to figure out what mechanism they might want to pursue so that we can fund metro and our transit partners.

 

Robert McCartney: I asked the Metro GM how other transit systems get a reliable source of revenue.

 

Randy Clark: So it's a little all over the place. So the system I had was the CEO before I came here. It was Capital Metro in Austin. Capital has its own sales tax by statute and collects its own sales tax, and so it's a little more impact with high recessions, but basically it's your money. It's not connected to the city or the state, and you're supposed to use your money and finance and plan and run your operation.

 

Robert McCartney: How big was the sales tax?

 

Randy Clark: That one was a 1 cent, like a penny.

 

Robert McCartney: A penny on the dollar.

 

Randy Clark: So I think Dallas is the same way, Houston is the same way. If you went up to Seattle, they did multiple packages. Sales is part of it, I believe excise tax on vehicles. I think they did some carbon stuff. They did some property, a mix of that. If you went to Massachusetts, the MBTA that is funded through or was, and I think it's still that way, a 1 cent sales tax for the whole state goes there.

 

Clark Mercer: I think when folks become more knowledgeable about how transit systems are run, it's a public good and we put a lot of money, billions of dollars into our roads and our highways and ticket revenue obviously helps the bottom line for Metro, but transit systems are heavily subsidized worldwide and that's standard operating procedure.

 

Randy Clark: There's been referendums all over this country, and usually when voters get asked to fund transit overwhelmingly people vote to support them.

 

Robert McCartney: Now I'll share some final thoughts of my own. I'm old enough to remember when the Metro subway network first opened in the 1970s and it was a jewel and a source of great pride for the district and the region. In the decades since then however, the region has drastically shortchanged it. Past officials didn't want to spend the money to do adequate maintenance to preserve it, creating a multi-billion dollar shortfall that grew each year. A combination of COVID, remote work, and inflation has brought this longstanding problem to a crisis point. At the same time, there's broad consensus that preserving and even expanding public transit is critical to economic development, the environment, and quality of life. The politics of developing a regional transit vision and sustainable funding model will be very difficult, but it's also a big opportunity. Mercer said success with Metro could pave a path for progress on other major issues in our region.

 

Clark Mercer: Lastly, I would just say, look, this region needs some more wins and we need to be able to show that we can get big things done. I truly believe government can get big things done, and I think now more than ever, if we can demonstrate that, if we can do that here, we can do that in a lot of other. Yesterday I was on an all day meeting on affordable housing, which is another issue we tackle here, but let's start where we can get some big wins and that can start a headwind for this region.

 

Robert McCartney: I hope you've enjoyed this podcast. We welcome your feedback. Email us at thinkregionally, one word, at mwcog.org. This podcast is produced by Lindsay Martin, Amanda Lau, and Steve Kanigan. I'm your host, Robert McCartney, urging everyone once again to think regionally.