Saving Metro versus Subsidizing the Commanders:
Closing the WMATA budget gap would cost a fraction per Metro system user compared to proposed subsidies for new Commanders stadium seats
WMATA (Metro) is facing a $750 million annual operating budget shortfall in Fiscal Year 2025 (FY25), starting July 1, 2024, just 10 months away. If our state and local governments in Maryland, Virginia and DC don’t step up to address the ongoing funding need, our region’s mass transit would suffer from catastrophic cuts.
At the same time, we’ve seen a lot of press attention to potential public subsidies for a new football stadium for the Washington Commanders. So, the Coalition for Smarter Growth compared the cost of closing the WMATA budget gap to recent Maryland and Virginia stadium subsidy proposals.
Closing the WMATA budget gap: about $1.50 to $2 per rider, paid by each jurisdiction vs.
Subsidizing the Commanders’ new stadium: $17 to $29 per game fan, all paid by a single jurisdiction (DC or MD or VA)
The Math
Closing the $750 million FY25 Metro Operating Deficit: $750 million increased subsidy ÷ 133 million forecast passenger round trips1 = $5.64 per rider
VA share2 = 26 3% or $197 million or $1.48 per rider
DC share = 35 8% or $268 million or $2.02 per rider
MD share = 37.9% or $284 or $2.14 per rider
Subsidizing the Commanders Football Team Stadium: Stadium subsidy3 ÷ (10 home games X 68,500 seats4 X 30 years5) = per game fan subsidy
Mid-range subsidy proposals = $600 million or $29.20 per game fan
Low-range subsidy proposals = $350 million subsidy or $17.03 per game fan
1 Total Metrorail, Metrobus and MetroAccess forecast ridership in FY25 (approx 266M one-way trips) divided by two. For comparison purposes, the analysis assumes that each trip is one leg of a round trip.
2 Assumes FY24 jurisdiction share of Base Operating Subsidy is applied to $750M operating deficit
3 Based on recent proposals of Maryland and Virginia legislatures and/or executives See following pages for more background In DC, no formal proposals have been adopted by the Council or presented by Mayor Bowser; however, her administration is now launching a study on financing options for a new stadium
4 Median capacity of recently constructed NFL stadiums
5 Assumed term of stadium agreement, similar to FedEx Field (opened 1997; team must play through 2027)
Funding ALL Metro Subsidies is Still a Better Deal than Commanders Subsidies
All annual state/local subsidies to Metro to cover existing & future needs:
● State/local subsidy contributions, Operating & Capital (est for FY 25): $2 36 billion
● Closing the Metro Operating Deficit (FY25 budget forecast): $0.75 billion
● Funding the Proposed Better Bus Network Plan (est for FY25): $0 27 billion
● Closing future Capital Funding Deficit (starts FY30, but included here): $1.10 billion
● Total annual hypothetical FY25 state/local subsidies = $4.48 billion
○ VA share = $1 28 billion or $9.60 per rider
○ DC share = $1.60 billion or $12.02 per rider
○ MD share = $1 61 billion or $12.10 per rider
All much less than $17 to $29 per game fan
Sources and calculations are detailed in the methodology below.
A Question of Priorities
If our state and local governments in Maryland, Virginia and DC don’t step up to address the ongoing funding need, Metro would have to cut ⅔ of rail and bus service These massive service cuts would slash access to jobs and opportunity, lead to more traffic and pollution, and damage the region’s economy and family budgets.
Meanwhile, last year, state legislatures in Maryland and Virginia passed bills that would provide hundreds of millions of taxpayer dollars (proposals ranged from $300 million to $1 billion), to entice the Commanders football team to build a new stadium in their jurisdictions With new ownership, the approaching 2027 end of the current stadium lease, and the start of Fall football season, we can anticipate more and louder calls from some sectors to publically subsidize a new stadium for the Commanders
The Enormous Benefits of a Healthy Metro System
Many studies have shown the limited net economic benefit of subsidizing football stadiums with their small number of home games each year But the benefits of maintaining a healthy Metro system are enormous. Within our region’s Metro Compact Area,6 the land within ½ mile of the system’s Metrorail stations and Metrobus stops contains 60% of the region’s population, 70% of jobs, and 50% of businesses The Metrorail station areas are only 3% of the region’s land area,
6 Includes the District of Columbia, City of Alexandria, Arlington County, Fairfax County, City of Fairfax, City of Falls Church, Loudoun County, Montgomery County and Prince George’s County
but contribute 30% of its property tax g p Commission study also showed the benefits of WMATA and other local Northern Virginia transit for the state of Virginia: generating $1 billion annually in personal income and sales taxes, and 5% of the general fund revenues Overall, for every $1 Virginia invests in transit, transit generates $1.60 in revenues for the state.8 WMATA presented the many societal benefits of its rail and bus services – and how our region could not function without them – in its 2011 Making the Case for Transit: WMATA Regional Benefits of Transit report. These tax revenue benefits are likely similar for Maryland and even greater for DC In addition, Metrorail and Metrobus are essential for enabling workers to reach jobs and contribute to the economy, and to slashing the greenhouse gas emissions which are already posing huge economic and social costs on society
Our State and Local Governments are Key for Supporting Metro
While the federal government provides some ongoing capital funding support for Metro (and transit commuter benefits to federal workers), and the system receives farebox revenues from riders, our state and local governments provide the largest share of operating and capital support to Metro. Some topline numbers on current funding and future needs include:
● Current annual contribution to capital and operating needs by DC, MD, VA and local Northern VA jurisdictions: about $2.3 billion
● Projected FY25 and beyond operating shortfall: $750 million per year9
● Capital funding shortfall starting in 2030: $1.1 billion per year (the 2018 capital funding deal enabled $15 billion in capital rehabilitation of the aging Metro system, but starting in 2030 the annual funding will be going entirely to debt service)
● Better bus network: about $268 million (or 35%) above current operating costs
Virginia, Maryland, DC and local governments – rather than the federal government – will have to be the leaders in addressing the crisis in the short-term, given the political climate in Congress Fortunately, other states (e g , New York and California) have stepped up to successfully address their main transit systems’ fiscal cliffs It is our hope that our state and local governments will make WMATA, not public subsidies for a new football stadium, their priority
Detailed Methodology
Metro additional subsidy required to close FY25 operating deficit per rider
7 WMATA, Future Financial Planning FY2025-2035, Finance and Capital Committee presentation, June 22, 2023, slide 5
8 Northern Virginia Transportation Commission, Value of Northern Virginia Transit to the Commonwealth, June 2023 report
9 WMATA projects the operating deficit to grow in later years, the amount depending on the rate of further ridership recovery See WMATA, Future Financial Planning FY2025-2035, slide 17
● Forecast FY25 operating deficit = $750 million
○ This analysis conservatively assumes that state and local governments end up covering this full amount
● Forecast FY25 annual total ridership
○ WMATA forecast: 75% of pre-pandemic level
○ FY2019 annual ridership (last full year before pandemic): 354,660,37310
○ 354,660,373 X 75% = 266 million approximate forecast FY25 annual ridership
○ 266 million X 0 5 = 133 million assumed round trips
● Forecast FY25 operating deficit ÷ Forecast FY25 annual ridership = operating deficit per rider
○ $750 million ÷ 132,997,640 = $5.64 per rider
○ VA share11 = 26.3% or $197 million or $1.48 per rider
○ DC share = 35 8% or $268 million or $2.02 per rider
○ MD share = 37 9% or $284 or $2.14 per rider
Sources:
● WMATA FY25 forecast operating deficit and ridership recovery from WMATA, Future Financial Planning FY2025-2035, Finance and Capital Committee presentation, June 22, 2023, see slides 17-18
● Pre-pandemic system ridership, FY19 from WMATA FY19 Annual Financial Report, p. 118, Annual Unlinked Passenger Trips.
● FY24 base operating subsidy for jurisdictions from WMATA FY24 Budget Book, p 14
Metro total of all existing state and local subsidies and future needs per rider
For FY25, if state and local governments totalled up their estimated operating and capital subsidies required under existing agreements, and added future operating and capital needs, this would include:
Operating Subsidies
● Existing state and local government operating subsidies
○ FY24 all state/local subsidies: $1 333 billion (adopted budget), includes
■ Base subsidy
■ Reimbursables
■ Debt Service
○ 3% annual increase cap (applied in this analysis to reimbursables and debt service as well as the Base subsidy)
○ Estimated FY25 Net Operating Subsidy: $1 333 billion X 1 03% = $1.373 billion
10 Total of all Metrorail, Metrobus and MetroAccess one-way unlinked trips
11 Uses WMATA FY24 budget jurisdiction shares of Base Operating Subsidy to apply to FY25 $750M operating deficit WMATA anticipates presenting jurisdiction shares of operating deficit in Fall 2023
● FY25 Operating Deficit $750 m ( g )
● Better Bus Visionary Network additional Metrobus cost
○ Additional Metrobus operating expenses estimated to be 35%
○ Assumes full amount is included in state and local operating subsidy
○ FY24 Metrobus operating budget = $742.9 million
○ Estimated FY25 Metrobus operating budget = FY24 budget + 5% increase12
○ Estimated FY25 Cost of Better Bus Visionary Network: 35% of estimated Metrobus operating budget = $273 million
FY25 estimated State/Local Operating Subtotal = $2.396 billion
Local share estimates13 of FY25 Operating Subsidy:
○ DC share: 35.8% or $858M
○ MD share: 37 9% or $909M
○ VA share: 26 3% or $629M
Capital Subsidies
● Existing state/local government capital subsidies = WMATA FY25 Plan: $988.6 million
● Future Capital Funding Deficit Starting in FY30: $1.100 billion
○ For illustrative purposes, this analysis assumes that state and local governments begin funding these capital needs in FY25
FY25 estimated State/local Capital Subtotal = $2.089 billion
Total FY25 hypothetical State/Local subsidy (Operating + Capital) = $4.485 billion
Local shares estimated based on FY24 budget base capital subsidy share:
○ DC share: 35.5% or $741M
○ MD share: 33 5% or $700M
○ VA share: 31.0% or $647M
Total State and Local Annual Hypothetical Subsidy per Rider
● $4.485 billion ÷ 133 million annual FY25 riders = $33.72 per rider annually14
○ DC share: $1 559B or $12.02 per rider
○ MD share: $1 609B or $12.10 per rider
○ VA share: $1.277B or $9.60 per rider
12 WMATA financial forecast for FY25 assumes 5% increase in personnel and non-personnel expenses
13 Uses WMATA FY24 budget jurisdiction shares of Base Operating Subsidy to apply to FY25
14 While this appears high, the subsidies for and externalities of driving, car ownership and related infrastructure are generally much greater See for example, Litman (2023) Fair Share Transportation Planning: Estimating Non-Auto Travel Demands and Optimal Infrastructure Investments or Gössling, et al (2022) The lifetime cost of driving a car
Sources:
● Existing state and local government operating and capital subsidies from WMATA FY24 Budget, pp 6, 14, 16
● WMATA Better Bus Visionary Network, 35% higher Metrobus cost, cited in DCist summary article. Existing FY24 Metrobus operating cost from WMATA FY24 Budget, p. 34 5% expense increase for FY25 from WMATA, Future Financial Planning FY2025-2035, Appendix, slide 36
● Forecast capital deficit from WMATA, Future Financial Planning FY2025-2035, Finance and Capital Committee presentation, June 22, 2023, slide 19
Washington Commanders new stadium subsidy per game fan
● Commanders home games (including pre-season) = 10
○ Fall 2023 schedule = 2 pre-season + 8 regular season home games
● Fans per game = 68,500
○ Median seating capacity of recent new NFL stadiums, opened 2006-2020
● Commanders tenure in new stadium = 30 years
○ Based on current FedEx field - opening 1997; team agreement through 2027
● Stadium subsidy proposals, mid-range = approximately $600 million
○ In 2022 in Maryland, Gov. Hogan’s administration proposed $600M each to upgrade the Ravens M+T Bank Stadium and Orioles Camden Yards ballpark Separate 2022 legislation provided $400M in public funds to upgrade infrastructure and community facilities near the FedEx Field site (did not include financing for the stadium) A Prince George's County proposal suggested an additional possible public funding source for the team
○ In 2022 in Virginia, the General Assembly considered proposals that would provide public subsidy packages to a new Commanders stadium ranging from $300M to $1B.
○ In DC, no formal proposals have been adopted by the Council or presented by Mayor Bowser; however, her administration is now launching a study on financing options for a new stadium
Mid-range public annual subsidy per game fan:
$600 million ÷ (10 games X 68,500 seats X 30 years) = $29.20 per game fan
Low-range public subsidy per game fan:
$350 million ÷ (10 games X 68,500 seats X 30 years) = $17.03 per game fan