Management

WMATA outlines $750 million deficit expected in FY25

June 23, 2023

The authority says it cannot cost cut its way out of the looming crisis that was brought on by raising costs, decreased revenues and voluntary subsidy reductions.

Mischa Wanek-Libman

Customers at the Farragut North Metrorail station. Without a solution to its pending financial crisis, WMATA says service could end at 9:30 p.m. and train wait times would be between 20 and 30 minutes starting in FY24.

The Washington Metropolitan Area Transit Authority (WMATA) has been able to celebrate many victories in the past year, including the opening of the Silver Line Extension and the Potomac Yard station, improved service on its Metrorail system, growing customer satisfaction and ridership. However, it’s near-term future is clouded by “the precipice of Metro’s funding crisis” in Fiscal Year (FY) 2025 when the authority is expected to face a $750 million deficit that will grow to an anticipated $1.2 billion by FY35 if no action is taken.

A chart illustrating WMATA's anticipated growing deficit starting in FY24 through FY35.

WMATA, like many peer agencies, has relied on emergency funding provided by the federal government to bridge the revenue gaps left during the pandemic. These funds will be exhausted in FY24. The authority says the FY25 deficit is being driven by a combination of factors, including a $196 million reduction in jurisdictional subsidy funds, a $288 million reduction in fare, parking and advertising revenues and an increase cost of $266 million due to inflation and annual increases associated with its collective bargaining agreements.

"We cannot afford to let Metro fail. It is too important to the region, our economy and quality of life, connecting people to jobs and family, reducing gridlock and cutting carbon emissions," said WMATA General Manager and Chief Executive Officer Randy Clarke. "Concerns were first raised about the lack of a dedicated and ongoing funding source in 1976 when Metrorail opened, and it is time for the region to come together to solve this serious financial challenge."

Simply cutting costs will not be enough to salvage WMATA’s financial future. WMATA explains balancing the budget with service cuts would mean the elimination of two-thirds of WMATA’s existing service, including:

No service after 9:30 p.m.
135 bus lines would be reduced to 37 lines
Train wait times would be between 20 to 30 minutes
MetroAccess would serve a smaller area during reduced hours.

WMATA says nearly 3 million people living in the region, 70 percent of jobs and 50 percent of employers are located within half-mile of a WMATA station or bus stop. Given WMATA’s reach, the economic impact of service cuts would drastically reduce transit’s value to the region.

"Without a strong, reliable transit system millions of people across the region stand to lose," said WMATA Board Chair Paul C. Smedberg. "Customers would see longer waits, constant gridlock, higher fares and reduced operating hours and the region’s economy could stagnate."

WMATA will engage with federal, state and local leaders, as well as other stakeholders over the next year to explore long-term funding options.

A presentation on the pending financial crisis can be found at WMATA’s website.

About the Author

Mischa Wanek-Libman | Editor in Chief

Mischa Wanek-Libman serves as editor in chief of Mass Transit magazine. She is responsible for developing and maintaining the magazine’s editorial direction and is based in the western suburbs of Chicago.

Wanek-Libman has spent more than 20 years covering transportation issues including construction projects and engineering challenges for various commuter railroads and transit agencies. She has been recognized for editorial excellence through her individual work, as well as for collaborative content.

She is an active member of the American Public Transportation Association's Marketing and Communications Committee and serves as a Board Observer on the National Railroad Construction and Maintenance Association (NRC) Board of Directors.

She is a graduate of Drake University, where she earned a Bachelor of Arts degree in Journalism and Mass Communication with a major in magazine journalism and a minor in business management.