How could D.C. officials be so “un-regional” that they won’t support a regional tax to fund the Washington Metropolitan Area Transit Authority’s deferred Metrorail capital needs?
Indeed, an Aug. 27 editorial in The Washington Post labels our position a “death wish for Metro.”
Actually, the District does support a regional tax — estimated to be a 3/4-cent increase in the sales tax that would be paid by every resident, business and visitor in the region. This uniform approach — borne equally by everybody — is used by other cities.
The need for a new tax comes from years of underfunding Metro. The underfunding highlights the safety and reliability issues that have plagued Metro.
A regional tax recognizes that Metro is a regional system. It’s hard to say who benefits more when a resident of Northern Virginia commutes on Metro into the District for work. The District? Virginia? I say both. And when Metro helps relieve congestion on Interstate 95, I say the region benefits, because congestion makes the region less attractive for residents and businesses.
When the Wilson Bridge is blocked, we see gridlock downtown. When Constitution Avenue NW is closed due to an accident, we see gridlock in Virginia.
All of the nation’s largest transit systems — except ours — rely on a dedicated tax. Most often it is a sales tax, and typically it is regional and uniform — for example, New York City and seven nearby counties, or San Francisco and two adjacent counties.
After 40 years, regional leaders here have agreed, finally, to support a dedicated tax. But there is not agreement that it should be regional and uniform. Instead, the sentiment seems to be that District residents and businesses should pay about three times more than their counterparts in Virginia. Meanwhile, Maryland residents and businesses would pay double their Virginia counterparts.
Not only is this unfair — and “un-regional” — but it presents a burden that District residents and businesses cannot afford. Our hotel tax would go from 14.8 percent to 16.01 percent, among the highest in the country, and our convention center would lose business. Our restaurant tax would go from 10 percent, already the highest in the region, to 11.21 percent. Our general sales tax would go from the lowest (5.75 percent) to the highest (6.96 percent) in the region.
In the spirit of supporting our regional transit system, the District would be made uncompetitive with its regional partners!
Opponents of a regional sales tax point to the fact that Virginia would pay roughly half of the new, dedicated revenue. At first glance that would seem unfair. But the tax is on the individual, not the jurisdiction, and Northern Virginia has roughly half the region’s population.
Opponents also point to the current formula for funding Metro. It was a political compromise 40 years ago when the region’s sprawl looked very different and the rail system was envisioned to be 98 miles. Indeed, track miles are not part of the formula. The District pays 37.2 percent, Maryland pays 34.8 percent, and Northern Virginia localities pay 28 percent.
No one has explained why this is fair, and, indeed, it was not the approach when the District, Maryland and Virginia agreed in 2009 to pay one-third each to match new $150 million annual funding from the federal government.
Another issue with using the 40-year-old formula for a new, dedicated tax is that as ridership and station counts change, the allocation per jurisdiction would have to change. Because this is a dedicated tax, each jurisdiction would have to vote to change — sometimes raise — tax rates. That outcome can’t be guaranteed, contrary to the purpose of a dedicated tax.
Opponents also point to Richmond: The Northern Virginia jurisdictions cannot impose a new tax without approval by the commonwealth’s legislature. Not only does Richmond disfavor taxes, but a tax for Metro that comes 50 percent from Virginia taxpayers would be fatal.
I understand the argument — it’s a political one — but the response cannot be for District residents and businesses to subsidize the commonwealth.
Metro must have dedicated tax revenue. The burden should be shouldered equally by all individuals and businesses in the region. A regional 3/4-cent sales tax does that; is the same approach used by other big cities; does not alter the competitiveness among our local jurisdictions; and is more dependable than relying on allocations under an old formula.
Phil Mendelson is chairman of the D.C. Council.