By Wyatt Gordon
Note: This article is part three of an ongoing series regarding the Washington Metropolitan Area Transit Authority (WMATA) and the region’s transit fiscal crisis. A version of this analysis was originally published by Greater Greater Washington, a nonprofit dedicated to advancing racial, economic, and environmental justice in land use, transportation, and housing throughout the Greater Washington region.
For months, the Capital Region has been staring down the barrel of a $750 million budget gap—a "fiscal cliff" that threatened to trigger a 67% reduction in transit service across the nation’s capital. However, with the Virginia General Assembly recently allocating $149.5 million to Metro in its latest biennium budget, the three jurisdictions served by WMATA—the District of Columbia, Maryland, and Virginia—appear to have successfully steered away from the immediate precipice.
While Virginia Governor Glenn Youngkin’s subsequent amendment may trim that contribution to $130 million, the broader takeaway is clear: the immediate survival of the region’s transit backbone is secured for the next two years. Now, the conversation has shifted from emergency triage to the more arduous task of addressing the structural, long-standing financial deficiencies that have repeatedly pushed WMATA to the brink of collapse.
The State of the System: Post-Pandemic Performance
The current relief is bolstered by a period of operational success. WMATA has seen a notable rebound in service quality, marked by the implementation of 24/7 bus service, improved wayfinding signage, and the restoration of pre-pandemic frequency levels. Riders have responded in kind; the Capital Region currently leads the nation in transit ridership recovery among heavy-rail systems.
Yet, complacency is not an option. Even with the recent uptick in ridership, Metrorail boardings on an average weekday remain roughly half of what they were in 2019. Like other major transit agencies across the country, WMATA is battling the dual pressures of inflated operational costs and the permanent shift in how and where people work.
However, DC’s situation is uniquely precarious. Because roughly one-third of the city’s land is owned by the federal government, the local tax base is constrained in ways that other major cities are not. While the region’s jurisdictions have pledged enough funding to keep the agency whole through the current biennium, the structural "year three" problem remains: the region must find a way to stop cannibalizing maintenance dollars to cover basic operational expenses.
Chronology of the Crisis: From Emergency to Long-Term Planning
The road to the current reprieve began over a year ago when the Metropolitan Washington Council of Governments (MWCOG) convened two critical stakeholder groups. The first—comprised of chief administrative and financial officers and the Northern Virginia Transportation Commission—has been tasked with "bean counting": verifying WMATA’s financial data and providing objective advice to elected officials on potential revenue streams.
The second group, a roundtable of executive and legislative leaders from all three jurisdictions, has been meeting bi-weekly to ensure the political willpower exists to close the budget gap.
Clark Mercer, the director of MWCOG, views this as a vital turning point. "We’ve got to have a bigger conversation and have it be a more public process," Mercer said. He argues that the region must move away from reactive budgeting. "Coming up with ideas of how to pay for things before we define exactly what we want isn’t the right order of operations. To get our electeds, our stakeholders, our counties, and our cities on board, we have to agree on the ‘what’ first, how much it costs, and options to pay for it—then electeds can decide whether that is palatable."
Decongestion Pricing: A Modern Revenue Engine
While officials focus on the "order of operations," policy advocates are already socializing bold solutions, most notably congestion or "decongestion" pricing. With the New York City Metropolitan Transportation Authority (MTA) set to implement tolling in its central business district this June, the Capital Region is under mounting pressure to consider a similar windfall.
"Effectively pricing access to roads is a win-win because it lowers traffic and raises money," says Alex Baca, GGWash’s DC policy director. The concept is not new—tolls have been used to manage infrastructure since 1792—but it remains politically charged.
Critics often argue that road pricing places a disproportionate burden on low-income residents. However, Dan Reed, GGWash’s regional policy director, rejects this framing. "People argue that we can’t have tolls because of higher costs to poor people and equity," Reed notes, "but all of the burdens of driving fall disproportionately on poor people—whether that is pollution, time lost to traffic, or the cost of owning and operating a car."
Supporting this view, a recent study from George Washington University concluded that implementing fees for driving and parking would significantly decrease air pollution and improve public health outcomes across the District. While a 2019-2020 DC study on the policy remains inexplicably withheld by the District Department of Transportation (DDOT), the evidence for road pricing as both a climate strategy and a revenue generator continues to mount.
Leveraging Land: The 19th-Century Solution
Beyond tolls, the region’s fiscal health is inextricably linked to land use. One proposal gaining traction is the Land Value Tax (LVT). Unlike a traditional property tax, which taxes the building and the land together, an LVT taxes the value of the land itself at a higher rate. This creates a powerful financial incentive for property owners to develop underutilized parcels to their highest potential.
"The implementation of an LVT would increase the value of the land itself and decrease the value of the improvement," explains Baca. "It would allow us to better match why land is perceived as valuable—its proximity to transit and the amenities that result from that."
Even without an LVT, the region could boost its tax base by easing zoning restrictions and parking requirements near transit hubs. Currently, the region’s local governments often make it unnecessarily difficult to build dense housing, despite the fact that the vast majority of new construction cranes are clustered near Metro stops. As journalist Matthew Yglesias puts it: "Allowing housing to be built gives you revenue, and that is what you need to keep public services functioning."
Federal Responsibility: A Seat at the Table
The federal government is not merely a stakeholder in WMATA; it is a primary driver of the system’s demand. With 400,000 federal employees in the region, each additional day that the federal workforce spends in the office contributes roughly $20 million to WMATA’s annual revenue.
However, even a full return-to-office mandate would not solve the long-term fiscal crunch. Instead, advocates like Beth Osborne, director of Transportation for America, argue that Congress must change its fundamental approach to funding.
"Rural and small-town transit agencies can use federal dollars for operations," Osborne notes, "but Congress has always had the attitude that cities are big and wealthy and can pay for transit operations themselves, ignoring the fact that many cities have no authority to raise money for transit."
There is evidence that the legislative tide is turning. During a recent MWCOG reception on Capitol Hill, regional senators signaled an increased openness to federal operating support. Virginia Senator Mark Warner has even advocated for WMATA funding on the grounds of homeland security. With a new transportation authorization bill on the horizon within the next two years, the possibility of a shift toward permanent federal operating assistance is a topic of intense, if cautious, optimism.
Implications: A Regional Tax Structure?
The central challenge remains the "tri-state" nature of WMATA. Yonah Freemark, a research associate at the Urban Institute, emphasizes that the funding mechanism Metro needs lacks a direct model because transit governance in America rarely crosses jurisdictional boundaries.
"What is needed is some regional tax structure that would not only fund the operations of WMATA but also the expansions that the agency is looking at," says Freemark. He points to Seattle’s Sound Transit as a potential blueprint—a system funded by a diverse, voter-approved combination of sales, property, and motor vehicle excise taxes.
While some Northern Virginia officials have proposed relying on transient occupancy taxes (taxes on tourists and business travelers), Freemark finds this strategy flawed. "This idea that you should charge people who are visiting the region as your primary source of revenue isn’t grounded in reality," he warns. "The primary people benefiting from the Metro are those who live here."
Conclusion
As the Capital Region looks toward the next decade, the message is clear: the status quo is no longer a viable path forward. With gas-powered car usage declining and the traditional gas tax losing its effectiveness as a funding mechanism, the region must pivot toward holistic solutions.
Whether through congestion pricing, land value taxes, or a new federal-local partnership, the path to a thriving Metro requires a willingness to embrace structural reform. As Dan Reed aptly summarizes: "The sources we have been using so far are no longer sufficient. We have to think of bigger, holistic solutions that can undo some of the mistakes of the past."
The survival of WMATA is not just about keeping the trains running—it is about securing the economic and environmental future of the entire Washington region.
