Maryland Taxpayers Association

No dedicated funding for Metrorail
by Peter Samuel

June 7, 2004

Brookings Institution transport analyst Robert Puentes says Washington
Metrorail needs a dedicated funding source. A one percent regional
sales tax, he notes, would raise $400 million/year - about enough to
cover Metrorail's operating deficit. Puentes argues that Metrorail
faces a financial crisis because of its need to refurbish its
middle-aged system and its dependence on annual grants from state and
district general funds.

A dedicated tax for Metrorail is a very bad idea. Metrorail is a
business. it provides a transport service in return for fares. To the
extent it cannot cover its costs of operation from the farebox it
should justify every penny it asks from taxpayers through the
legislative process - through making annual bids and undergoing state
assembly oversight and appropriation. A dedicated funding source would
effectively remove Metrorail from oversight and accountability. It
would be an open invitation to waste and extravagance.

It would burden the whole region with a new tax and detract from the
standard of living of the people of this area.

A regional sales tax would also be inequitable. It would tax many who
don't use Metrorail much, or at all, on behalf of others who use it
disproportionately. And what is the "region?" I live in Frederick. I
use Metrorail, not on a daily basis, but quite frequently. Where would
the regional line for the tax be drawn?

Imagine the car dealerships and outlet stores that would develop just
outside the line! The dread "sprawl" would be encouraged by this tax.
Also consider another aspect of the unfairness of a regional tax. A
considerable proportion of Metrorail users are tourists and other
visitors to the national capital. They are certainly outside the tax
region, yet those within the region would pay a tax to subsidize their
visits.

What Metrorail needs is not more secure subsidies but more emphasis on
reducing the need for subsidies by raising its farebox revenues and
lowering costs.

Peter Samuel is a journalist specializing in road issues and produces
TOLLROADSnews a web-based specialist news service. He also writes for
the Reason Public Policy institute and Maryland Public Policy Institute
on transport issues.

NoDedicated$sMetrorail040603