Gas Tax Shortfall Could Hit Bus Services

Loudoun’s 2 percent gasoline sales tax will soon be dedicated entirely to fund Metro capital projects—and already are expected to come up short by an average of $5.1 million each year, leaving the county in a financial bind.

The county’s revenue projections from the fiscal year 2015 budget showed the gas tax bringing in $12.6 million during fiscal year 2017, the current budget year. Supervisors revised that projection down to $7.9 million in the adopted 2017 budget, but the county budget office now says even that still was too high—Loudoun is projected to bring in $6.9 million—$5.7 million less than the original projection and nearly a million dollars less than the adopted budget.

The shortfall is caused by gas prices that began falling in 2014—just as the board voted to adopt its fiscal year 2015 budget. The gas tax helps fund county contributions to capital projects in the towns and certain nonprofits, but the biggest chunk is used to underwrite the Loudoun County Transit bus service.

In the past several years, the county has filled the gap between gas tax income and expenditures with savings from previous, more lucrative years, but after this year, that fund will run dry. Without changes, gas tax funding is expected to fall $2.9 million short next year, necessitating service cuts or supplemental funding from other sources.

Loudoun County Transit includes Metro Connection service, long-haul service, local fixed route services, and commuter services. In the west, Loudoun supports transit through payments to Virginia Regional Transit.

Finance committee chairman Supervisor Matthew F. Letourneau (R-Dulles) said that may all have to get cut back.

“We need a more efficient bus system with service focused primarily on commuters,” Letourneau said. “That would ultimately mean the elimination of a significant number of fixed routes.”

That money also supports on-demand paratransit services for disabled riders in western Loudoun, and paratransit within three-quarters of a mile of any fixed bus route in eastern Loudoun. Letourneau said he has “a policy concern” there—that people in the west can get paratransit service anywhere, and people in the east can only get service near existing bus routes.

A Loudoun County Transit bus picks up riders at the county government building in Leesburg. (Renss Greene/Loudoun Now)
A Loudoun County Transit bus picks up riders at the county government building in Leesburg. (Renss Greene/Loudoun Now)

The Americans with Disabilities Act only requires complementary paratransit within three-quarters of a mile of a fixed bus route—not the on-demand service that VRT provides in Western Loudoun, and to which Loudoun is contributing $332,243 this year.

Those services for Loudoun’s disabled population could also be on the chopping block.

“I think this comes into a little bit of the fairness issue Supervisor Letourneau was talking about as well, that if I’m way out somewhere I can get service, but if I’m seven-eighths of a mile from a station I can’t get service,” said Supervisor Ralph M. Buona (R-Ashburn). “And I don’t know why we would go beyond what’s mandated by the federal government in providing this right now when our resources are getting scarcer and scarcer to fund this.”

The county has known for years that it would have to do without gas tax funding eventually. In fiscal year 2019, the county will divert all gas tax money to Metro capital funding. The gas tax is expected to fall short of that obligation too, meaning the county will have to find another source of funding.

This year, the county set aside room in its Capital Improvement Plan to pay for the shortfall with debt financing if necessary—using bonds that would normally be used to pay for the county’s own capital projects. County budget staff also has raised the possibility of taking revenue generated by two cents of the real estate tax rate that is earmarked for transportation construction projects and redirecting it to Metro.

Buona said if long-haul bus service to DC can’t be made to pay for itself, it may have to go.

“I’ve always believed once Metro arrives—and I know this is not politically popular, I know it takes some political will and it’s difficult—but once Metro arrives, unless we can make the long-haul fare-neutral, then we’re going to have to look at possibly eliminating long haul and getting people to Metro,” Buona said.

There is some question whether long-haul service can be made to pay for itself—as fares go up, ridership may decrease too much.

“It is kind of a luxury service, but it’s also a user fee,” said Chairwoman Phyllis J. Randall (D-At Large). “If they want to pay it, then they pay it.”

The county budget staff will continue to look for ways to supplement gas tax shortfalls, which will come back up during budget deliberations.

2 thoughts on “Gas Tax Shortfall Could Hit Bus Services

  • 2016-10-19 at 4:17 pm

    Paging Ken Reid. Isn’t this exactly what Ken Reid warned against years ago before the metro vote took place?

    Revenue neutral buses? Good idea. Now, let’s make metro revenue neutral also and see how passengers stomach $25 fare rides.

  • 2016-10-20 at 10:15 am

    It’s the same old story again and again: Government projections are off by only 50 percent, Hooray! Loudoun taxpayers will once again, have to cover the 50 percent. Open up your checkbooks folks.

    A 5th grader can tell you that global oil prices fluctuate, and by extension, gasoline. Nobody at Harrison Street bothered to factor that in?

    You’re right Mr. D. — Make metro “fare neutral” and see what happens.

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