Both the House and Senate will soon have an opportunity to vote
on legislation introduced by Representative Tom Davis (R-VA) to
divert $1.5 billion of federal revenues over 10 years to provide
additional subsidies to the deeply troubled Washington Metropolitan
Area Transit Authority (WMATA), which serves the nation's capital
and his congressional district with buses and a metro rail system.
Titled the "National Capital Transportation Amendments Act of
2007," both the Senate version (S. 1446) and the House version
(H.R. 401) have been reported out of committee and now await action
on the floor. These proposed subsidies, and the tax increases
needed to fund them, would be in addition to the other subsidies
and tax increases being sought to extend WMATA's metro rail service
to Dulles Airport.
Defined as an earmark because of its location-specific
applicability and the distribution of benefits to a small number of
people in a limited number of communities, this massive earmark
would be one of the largest ever passed--larger than even Alaska's
infamous "Bridge to Nowhere," which Congress and the state of
Alaska have since canceled. Congress should reject the bailout
approach and instead link the continuation of existing federal
subsidies to management and labor reforms at WMATA.
Overstepping Federal Bounds
As bad as this legislation may be from a federal budget
perspective, the Davis bailout also promotes tax-and-spend policies
at the state and local levels. Section 18 (d)(1)(A) requires
jurisdictions in Metro's service area to raise local matching funds
through a "dedicated funding source" in order to receive the
federal funds. This, of course, implies the imposition of a
dedicated tax. This 10-year, $1.5 billion commitment would be on
top of the $671 million the local communities already provide WMATA
each year.
Seduced by the federal largesse, legislators in Virginia
recently enacted a controversial transportation law (HB 3202) that
empowered a transportation taxing authority for Virginia's
Washington suburbs. The authority's unelected board would be
allowed to impose theses taxes, and would guarantee that the first
$50 million in taxes raised by the authority each year would go to
WMATA, despite the fact that only a small number of people in the
region use the system. Widely unpopular among voters, the Virginia
legislation is now the subject of court challenges based on its
constitutionality, and some analysts believe that voters' adverse
reaction may lead to a change in party control of the Virginia
legislature.
Rewarding Poor Performance
Mr. Davis justifies the earmark on the grounds that "Metro, the
public transit system of the Washington metropolitan area, is
essential for the continued and effective performance of the
functions of the Federal Government, and for the orderly movement
of people during major events and times of regional and national
emergency."
But Metro provides no such service. Unreliable and poorly run,
the system is subject to frequent shutdowns and service
interruptions due to equipment failure, bad weather, suicides,
driver error, and passenger medical emergencies. During one recent
setback, a Metro spokeswoman noted that "Because nearly half of
Metro's daily commuters are federal government employees... delays
could be less severe if large numbers of them take advantage of the
unscheduled leave option and stay home." So much for it being
"essential for... the Federal Government." Perhaps as a result of
its low quality service, WMATA ridership has been stagnant over the
past few years, declining from 2004 to 2005, but rising to slightly
above the 2004 volume in 2006.
Despite decades of lavish subsidies from state, local, and
federal authorities, WMATA is plagued by serious problems, chief
among them being a legacy of mismanagement and high-cost
operations. As a consequence of its many operating inefficiencies,
the system is broke and has no funds to add to capacity, replace
unreliable rolling stock, or make other necessary repairs and
improvements. Although it has raised fares twice in the last few
years, the modest increases were well below the cost increases
incurred by local motorists due to soaring gasoline prices. A
proposal by its director to increase them again was not supported
by its board.
WMATA has avoided opportunities to save money and improve
service through competitive contracting, due in part to
management's unwillingness to confront opposition from its
unionized workforce. The communities it serves do not share WMATA's
fear of contracting. Private contractors operate virtually all of
the newer public transit services in the Washington, D.C., area;
the WMATA alternative is simply too expensive and unreliable.
Another troubling aspect of this legislation is the regressive
nature of the spending policies it promotes. Notwithstanding the
bill's contention that subsidizing the daily commute of civil
servants is an essential national need, Washington-area workers are
among the best paid in the nation. Whereas the median household
income nationwide was $58,526 in 2006, it was $119,812 in Fairfax
County, VA--the most populous part of Mr. Davis' congressional
district. Also, the U.S. Bureau of the Census reports that only 9.4
percent of Fairfax County residents and only 4.2 percent of Prince
William County residents use WMATA services or another form of
transit to get to work.
Conclusion
This bill would do little more than reward poor performance with
an unprecedented taxpayer bailout. Congress should force
fundamental market-based reforms on Metro by linking the
continuation of the system's existing federal subsidies to
reductions in operating costs, improvements in service, and an
aggressive program of competitive contracting similar to the
successful reforms implemented elsewhere in several of the major
metropolitan areas of Europe.
Ronald D. Utt,
Ph.D., is Herbert and Joyce Morgan Senior Research Fellow in
the Thomas A. Roe Institute for Economic Policy Studies at
The Heritage Foundation.