Think back to November 2020, when Metro faced a $500 million pandemic-induced budget deficit. Metro officials proposed drastic cuts including shuttering 19 stations, eliminating weekend service, laying off 2,400 workers, and trains every 30 minutes.

Months later, the federal government came in with relief funds to save the day and avert a crisis.

Now, the $2.6 billion in federal dollars provided since the pandemic began are running out. Fares, which make up 35% of Metro’s operating budget, are down since ridership has not returned to pre-pandemic levels. Metrorail has only recovered 42% of its ridership and Metrobus has recovered about 60%.

This time, Metro officials are not banking on the cavalry — in the form of a federal bailout or additional local dollars — to arrive.

Later this summer, board members and new Metro General Manager Randy Clarke will begin to calculate how to plug a $356 million operating budget gap.

The three remaining “levers” left to pull are unenviable decisions that will negatively affect riders and the workforce: service cuts, fare increases, layoffs, or most likely, some combination of all three. Metro could also hunt for internal cost savings.

Metro’s budget process usually kicks off in the fall, so it’s a bit unclear just how much service would have to be cut or fares raised to meet the budget. It won’t be as draconian in terms of cuts compared to what was proposed in 2020 (and never actually happened).

But all options are on the table, according to Metro board finance chair Matt Letourneau, who spoke at Thursday’s Northern Virginia Transportation Commission meeting.

“I think people out there do understand that costs are going up everywhere… and it’s logical that Metro costs are also going up.”

He says it’s worth a conversation to get input from riders and local officials.

“It’s difficult to have that conversation (about fare increases) when service has been less than optimal,” Letourneau said. “Hopefully that is improving throughout the summer and into the fall.”

Long and short-term challenges

The tough choices come at a time when Metro is already dealing with dwindling rider confidence because of several safety crises, including the sidelining of 60% of its fleet after a 7000-series train derailed last October, as well as lapsed certification of dozens of train operators.

Metro is also going up against the headwind of increased telework. Pew Research Center reported in January that 60% of Americans are still working from home two years after the pandemic. Federal workers, which made up 40% of Metro’s ridership pre-pandemic, are seeing more flexibility from their departments. Nearly 80% of government employees now say they have the ability do their jobs remotely.

Letourneau has said the budget situation is both short-term, with the looming budget gap next year, but also long-term. Metro’s financial model ultimately needs to be re-evaluated, in part to include more all-day service. For decades, Metro relied on regular nine-to-five commuters who haven’t returned in the numbers they need to keep the current model afloat.

The deficit situation is and has been fluid. Metro has already found $150 million in savings and increased ridership revenue to reduce the gap from the previously-estimated $500 million.

Members of the Northern Virginia Transportation Commission say they are studying ideas and strategies to address Metro’s long-term financial model, the rising labor costs, rider confidence, the fare structure, and how to increase non-fare revenue.

Metro has already factored in one major rising cost: labor. Metro’s contract with ATU Local 689 signed in 2019 includes a 2.5% general wage increase, a provision to keep up with the cost of living, and a 1% raise when ridership increases by more than 2%. Overall, it’s about a 10% raise for union workers this year.

Board members say Metro staff will run the latest projections for ridership, return to work, spending rates, and other increased costs in September. If cuts or fare increases are needed, they would go into effect on July 1, 2023.

Luring riders back

Metro staff declined to be interviewed for this story, but in a statement, board chair Paul Smedberg said “There’s no doubt that there are challenges ahead beyond our next fiscal year… (but) Metro is well poised to support the region and grow ridership.”

The board passed a number of fare changes that went into effect this month to entice riders back, including $2 flat fares after 9:30 p.m. and discounts on monthly passes that represent about a 13% savings. He also touted improved amenities at some recently-renovated stations and technology improvements like new fare gates and mobile payment.

But it’s likely those won’t be enough to get ridership back to pre-pandemic levels.

One problem that has grown during the pandemic is fare evasion, something Metro may address as a means to shore up the budget.

Metro estimates it lost $10 million in the last six months of 2021 because of fare evasion. The transit agency said 1 in 3 bus trips were not paid for in those months. Rail fare evasion is harder to measure, but is also expected to be high, officials posit.

“It’s an issue Paul (Smedberg) and I have spent many hours on,” Letourneau said. “The incoming GM is focused on this issue… we’ll have more to say about that at the next meeting.”

Not only is it a financial issue, but it’s also an image issue for Metro. Public commenters have complained about people jumping the turnstiles with no repercussion and increased levels of other rule-breaking on Metro. In 2019, D.C. decriminalized fare evasion, an issue that was hotly debated on both sides and has led to uneven enforcement in other jurisdictions.

A 3% operating expense cap looms over Metro’s budget

Other solutions, like more federal bailout money or additional local funding, are unlikely at this point.

But it’s something that Metro should fight for, says Stephanie Gidigbi-Jenkins, a former Metro board member from D.C.

“It’s going to be important for the leadership in each of the jurisdictions to think about how to ensure that there’s sustainable funding for Metro in the long term… and how to also meet the needs of riders.”

But a 2018 dedicated capital funding law passed by D.C., Maryland, and Virginia prevents WMATA from increasing its operations budget by more than 3% a year. It would likely require passing legislation in all three jurisdictions to change that. It was created to constrain Metro’s growing budget and give jurisdictions a better idea of how much they’d owe each year.

“I don’t think anyone could’ve understood the implications of the pandemic regionally and globally,” Gidigbi-Jenkins said. “The 3% cap doesn’t make sense in this moment.”

“I think it would be important in Maryland, Virginia, and D.C. to meet the needs of the riders.”

For years, Metro has aimed to implement fare increases every other year, but those fare hikes were paused as Metro dealt with dwindling ridership and infrastructure issues.

The last time Metro raised fares was back in July 2017, when bus rides went up 25 cents to $2, off-peak rail fares went up 25 cents to $2 base fare, and peak rail fares went up 10 cents to $2.25 base fare.

In recent years, Metro has tried to reduce costs through $2 flat fares on weekends and after 9:30 p.m. and discounted passes.

Can the system sustain higher fares and service changes?

Higher fares and less service are going to be tough for riders to swallow, local Metro watchers say. Riders have already expressed frustration because they’re currently paying peak service fares while waiting 10-30 minutes for a train. (Letourneau said they did not get rid of peak fares because it would exacerbate the upcoming budget gap).

And local officials are not wild about helping Metro beyond its yearly 3% increase in funding without some proof that Metro can fix its ongoing issues.

“I think that WMATA is going to have to come to the table and come up with some concrete solutions on what they can do to help with this revenue gap,” said Maryland state Sen. Craig Zucker of Montgomery County. “And I think it’s important for leaders across the region to come together and figure out what makes the most sense.”

Zucker said he understands how vital Metro service is to Montgomery and Prince George’s County residents, and he notes Maryland has consistently supported WMATA.

Del. Marc Korman, chair of Maryland’s House Subcommittee on Transportation and Environment, says in order to accrue more regional funding, WMATA needs to prove it is dealing with structural and managerial issues beyond just pandemic-related ones.

“Navigating COVID is hard enough, but we also have to keep our eye on that broader ball of concerns, because just dumping more money in doesn’t solve those problems — and those are real problems.”

Korman adds the change in Metro’s leadership also may not address the root of WMATA’s problems.

“It’s nice to change leaders,” Korman said. “I wish Randy Clarke good luck, but we’ve had a series of savior general managers over the past 15 years, and obviously that doesn’t solve the problem. I hope he brings good ideas and a good management style, but it’s not the personalities, it’s the structure that I think is what needs to be examined.”

Joe McAndrew, who manages transportation policy for the large business group Greater Washington Partnership, says before the civic alliance advocates for more money on WMATA’s behalf, they need transparency and cooperation from WMATA.

“It’s tough to know who’s the problem actors or what’s the organizational structure that enables these issues to persist,” says McAndrew. “But these issues have persisted not just in the last six months or a year; these go back many years and so because of that, we need to see WMATA do a real big look and tell the region why we have a system today that enables noncompliance on safety, and what they plan to do to fix it.

“I think that that’s something that we need WMATA itself to do before we can go ahead and have trust and confidence placed back in the system,” McAndrew said.

From overcrowded trains to dwindling ridership

Dr. Zachary Schrag, Professor of History at George Mason University, who wrote the book, “The Great Society Subway: A History of the Washington Metro,” says Metro has a history of issues with trust. The book covers the origins of Metro in the 1970s, painting it as an exemplar of Lyndon B. Johnson’s progressive public works initiatives. Schrag adds, however, that the public’s enthusiasm for the Great Society programs and government in general faded in the 70s, taking Metro down with it.

But Schrag says it is a mistake to blame all of Metro’s failures on a general lack of trust in government. He attributes ineffective and decreased service to poor money management on WMATA’s part, as well as issues with the organization’s safety culture and management.

Schrag says better facilities, like recently renovated stations, and better land use, like recent efforts to build more apartments, offices, and mixed-use areas near stations, might increase ridership and help get Metro back to a robust budget.

Cutting service to match the level of revenue Metro is receiving will only further frustrate customers who rely on Metro and alienate those who are “choice” riders with other options like driving, he said.

“Twenty years ago, Metro’s great challenge would be to handle all the people who want to ride,” Schrag said. “Obviously, 20 years later, the challenge is to get people to want to ride.

“There were many complaints about the crowds 20 years ago. Now, there are understandable complaints about the infrequency of service, so it can be a challenge to have too many people or too few.”

Current Metro predictions put returning back to pre-pandemic ridership by 2024, but even now some doubt they’ll ever get back to those numbers.