Over the weekend, state legislators nearly unanimously passed a bill to fund Metrorail that county supervisors say will gut transportation funding in Loudoun and Northern Virginia.
The bill has won accolades from legislators in other areas and Loudoun’s own Chamber of Commerce for filling Virginia’s estimated $154 million portion of Metro’s annual funding gap, but local government leaders like Supervisor Matthew F. Letourneau (R-Dulles) say Loudoun taxpayers “would have been better off with no bill.”
Letourneau chairs the board’s finance committee and the Metropolitan Washington Council of Governments. He said the bill is bad for Loudoun because it strips money from the Northern Virginia Transportation Authority, which funds hundreds of millions of dollars of transportation projects every year, and redirects that money to Metro. That includes funding from the region’s grantor’s tax, its transient occupancy tax, and its gas tax, among other sources.
The only new money expected to result from the bill is $22 million from a gas tax floor in the Northern Virginia region. The state is expected to contribute $30 million.
“The way that they did it was sort of the easiest way for them, which was to grab a whole bunch of money that was obviously tied up in road planning projects, and redirect it,” Letourneau said.
Taking money from the NVTA for Metro puts a heavier burden on Loudoun. Loudoun is responsible for 7.5 percent of Virginia’s share of Metro costs, but about 18 percent of NVTA funding—so shifting money from the NVTA means Loudoun is paying a bigger share of Metro’s costs.
And Loudoun board Vice Chairman Ralph M. Buona (R-Ashburn) said using grantor’s tax money for Metro is even worse for Loudoun taxpayers. That is a tax on real estate transactions—and Loudoun has one of the busiest real estate markets in the state.
“Grantor’s tax collection per capita is the largest in Loudoun in the region, and yet Loudoun’s contribution to Metro is the smallest per capita in the region,” Buona said. That, he said, means Loudoun is again disproportionately affected.
This year for the first time, more than half of Loudoun’s six-year capital spending plan is tied up in transportation projects, nominally a state government responsibility. Loudoun relies on NVTA funding—established in 2013 to allow the region to raise money for transportation projects—to get the most out of that plan. But with both Loudoun and the NVTA nearing a vote on their respective six-year plans, the region’s roster of road projects has been shaken up by the General Assembly’s decision to take much of that funding for Metro.
According to the NVTA’s 2017 annual report, last year the grantor’s tax and transient occupancy tax together added up to more than $81 million in revenues.
“There is not a large enough amount of money coming out of the state,” said County Chairwoman Phyllis J. Randall (D-At Large). “That is a problem, and it’s a huge problem.”
She said the cut to funding would not only reduce the amount available to transportation projects in the region, but could also affect the NVTA’s ability issue bonds and even its credit rating.
“You’ve just kind of shaken the confidence of the bonding agencies, that’s what the General Assembly’s done,” agreed Buona, who sits on the NVTA’s Planning Coordination Advisory Committee, which is writing the NVTA’s six-year plan. “Because bonds are issued under the reliance that there’s going to be a continuous funding source for it, and all of a sudden the General Assembly’s kind of messed with that funding source.”
“Really, the General Assembly just passed the buck,” Buona said. “They allowed us to tax ourselves back in 2013 to build roads, and now they’re saying, that money we allowed to tax yourself, now we’re going to take it away and hand it to WMATA.”
The bill was agreed to by every member of Loudoun’s General Assembly delegation except Del. Dave A. LaRock (R-33) and Sen. Richard H. Black (R-13).
“I get those concerns, but frankly unless we wanted to raise taxes, which there was absolutely no support for that, then there’s no other way we can do this,” said Del. John J. Bell (D-87).
Bell said it was important Virginia fill the full $154 million funding gap so that Maryland and DC would be under pressure to follow suit. And he said doing nothing was not an option given Metro’s safety and reliability problems.
“If we don’t give them that bond authority, which this does, then they can’t purchase those cars and frankly make the system safe,” Bell said. “So I think punting, not doing anything, is the wrong answer, because people’s safety and lives are at risk.”
The bill represents the first time Virginia will provide direct tax funding for Metro. It will also help Metro issue general obligation bonds to help defray the upfront costs of catching up on years of underfunding and neglect to maintaining the system.
Under this bill, if Metro’s expenses grow by more than three percent annually, the state would automatically start withholding 35 percent of Metro funding from Virginia.
“We’ve stepped up to Metro, but we’re sending a message that we want them to control the cost,” Bell said. “And the operating costs over the last few years—their projections have just continued to rise, and frankly in a way that there doesn’t seem like there is as much discipline in the system as there should be.”
He said the bill “sends a message,” and may help bring those operating costs down by helping pay for newer equipment.
In a press release, Loudoun County Chamber of Commerce President and CEO Tony Howard said the “General Assembly has proven a willingness to work together and compromise, both across partisan lines and between the House and Senate, to make an investment in Northern Virginia’s economy and in our citizens quality of life,” and state legislators “should be commended for their willingness to listen to Northern Virginia’s business and community.
“We recognize that certain industries are being asked to shoulder an increased financial burden by this legislation, and that this measure does redirect existing transportation funds previously intended to fund road improvements,” Howard stated. “While we would have preferred that the Commonwealth invest more statewide funds into Metro, this compromise represents the very best hope of getting a funding measure approved in the 2018 session.”
The bill now goes to the desk of Gov. Ralph Northam. Monday morning, Northam said he would be making tweaks to the bill, which would send it back to the General Assembly again for another vote. While he did not reveal details, he said he would seek to fund Metro from other sources besides diverting funding from Northern Virginia transportation projects.