    [House Hearing, 109 Congress]
    [From the U.S. Government Publishing Office]

     THE CAPITAL REGION'S CRITICAL LINK: ENSURING METRORAIL'S FUTURE AS A
              SAFE, RELIABLE, AND AFFORDABLE TRANSPORTATION OPTION

    =======================================================================

                                    HEARING

                                   before the

                                  COMMITTEE ON
                               GOVERNMENT REFORM

                            HOUSE OF REPRESENTATIVES

                           ONE HUNDRED NINTH CONGRESS

                                 FIRST SESSION

                                   __________

                               FEBRUARY 18, 2005

                                   __________

                                Serial No. 109-2

                                   __________

           Printed for the use of the Committee on Government Reform

      Available via the World Wide Web: http://www.gpo.gov/congress/house
                          http://www.house.gov/reform

                                     ______

                        U.S. GOVERNMENT PRINTING OFFICE
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                         COMMITTEE ON GOVERNMENT REFORM

                         TOM DAVIS, Virginia, Chairman
    CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
    DAN BURTON, Indiana                  TOM LANTOS, California
    ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
    JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
    JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
    GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
    MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
    STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
    TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
    CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
    JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
    CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
    MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
    DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
    GINNY BROWN-WAITE, Florida           C.A. DUTCH RUPPERSBERGER, Maryland
    JON C. PORTER, Nevada                BRIAN HIGGINS, New York
    KENNY MARCHANT, Texas                ELEANOR HOLMES NORTON, District of
    LYNN A. WESTMORELAND, Georgia            Columbia
    PATRICK T. McHENRY, North Carolina               ------
    CHARLES W. DENT, Pennsylvania        BERNARD SANDERS, Vermont
    VIRGINIA FOXX, North Carolina            (Independent)
    ------ ------

                        Melissa Wojciak, Staff Director
           David Marin, Deputy Staff Director/Communications Director
                          Rob Borden, Parliamentarian
                           Teresa Austin, Chief Clerk
              Phil Barnett, Minority Chief of Staff/Chief Counsel

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on February 18, 2005................................     1
    Statement of:
        Corbett, John J., Jr., co-founder, Metroriders.org...........   115
        Downey, Mortimer L., chairman of the board, PB Consult, Inc..   103
        Kauffman, Dana, chairman of the board, Washington
          Metropolitan Area Transit Authority........................   011
        Millar, William, president, American Public Transportation
          Association................................................    93
        White, Richard A., chief executive officer, Washington
          Metropolitan Area Transit Authority........................    20
    Letters, statements, etc., submitted for the record by:
        Corbett, John J., Jr., co-founder, Metroriders.org, prepared
          statement of...............................................   117
        Davis, Chairman Tom, a Representative in Congress from the
          State of Virginia, prepared statement of...................     4
        Downey, Mortimer L., chairman of the board, PB Consult, Inc.,
          prepared statement of......................................   105
        Kauffman, Dana, chairman of the board, Washington
          Metropolitan Area Transit Authority, prepared statement of.    14
        Millar, William, president, American Public Transportation
          Association, prepared statement of.........................    97
        White, Richard A., chief executive officer, Washington
          Metropolitan Area Transit Authority, prepared statement of.    22

     THE CAPITAL REGION'S CRITICAL LINK: ENSURING METRORAIL'S FUTURE AS A
              SAFE, RELIABLE, AND AFFORDABLE TRANSPORTATION OPTION

                                  ----------

                           FRIDAY, FEBRUARY 18, 2005

                              House of Representatives,
                                Committee on Government Reform,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 10:07 a.m., in
    room 2154, Rayburn House Office Building, Hon. Tom Davis
    (chairman of the committee) presiding.
        Present: Representatives Tom Davis, Cummings, Van Hollen
    and Norton.
        Staff present: Melissa Wojciak, staff director; David
    Marin, deputy staff director/communications director; Keith
    Ausbrook, chief counsel; Bill Womack, legislative director; Rob
    White, press secretary; Drew Crockett, deputy director of
    communications; Shalley Kim, professional staff member; Teresa
    Austin, chief clerk; Sarah D'Orsie, deputy clerk; Earley Green,
    minority chief clerk; Rosalind Parker, minority counsel; and
    Jean Gosa, minority assistant clerk.
        Chairman Tom Davis. Well, good morning. The committee will
    come to order, and I want to thank everybody for coming this
    morning.
        The Washington Metro system has become a vital part of
    everyday life in the Nation's Capital, providing an
    indispensable commuting option for hundreds of thousands of the
    area's workers and out-of-town visitors each day. A significant
    segment of the Federal work force also relies on the system,
    making it an integral component of the government's ability to
    function. It is also the primary means of transportation for
    those attending events of national significance, such as the
    Presidential Inauguration, the annual 4th of July celebration,
    and the Cherry Blossom Festival. Metro, in short, possesses a
    national significance.
        Metro was constructed to be a world-class system. As WMATA
    CEO Dick White will note in his testimony today, Metro boasts
    tile and granite platforms and vaulted ceilings. Its cars have
    a modern look to them and contain more seats for passengers
    than do cars on many other transit systems. It is also a system
    befitting the capital of the free world and one in which we
    should all take pride.
        Past administrations and Congresses have recognized the
    national significance of Metro, and the Federal Government has
    long played an appropriate significant role in the system's
    evolution. I have asked the Government Accountability Office to
    prepare a report detailing the role of Federal Government has
    played, and that report is available here today.
        The National Capital Transportation Act of 1969 and
    subsequent amendments in 1979 and 1990 originated in the House
    Committee on the District of Columbia, since incorporated into
    this committee. This remains the committee of jurisdiction over
    Metro. As Metro begins to show the inevitable effects of age
    and ever-increasing demand, it is incumbent upon this committee
    to once again play a leading role.
        In recent years, Metro's management has issued dire
    warnings that the system is in need of significant
    reinvestment. Metro's ridership has grown by 20 percent in the
    last 5 years, and it is expected to double by 2025. As any
    Orange Line passenger will tell you, additional rail cars are
    already urgently needed to meet peak hour demand. In addition
    to new rail cars and buses, Metro has requested significant
    dollars to maintain its existing infrastructure and make
    necessary expansions to reflect the growing metropolitan D.C.
    area.
        In 2002, Metro published a $12.2 billion, 10-year Capital
    Improvement Plan. This plan includes all of the necessary
    maintenance, increased capacity and service expansions Metro
    believes necessary for the original 103-mile system.
        Recognizing the fiscal constraints and political realities
    of the Federal, State, and local governments that fund the
    system, Metro's management subsequently developed a package of
    bare bones, must-have items that reflect the most urgent needs.
    This package, called the Metro Matters Program, consists of
    $3.3 billion for new rail cars and buses needed to relieve
    unmanageable congestion for another 10 years. It also contains
    other measures intended to keep up with demand and maintain an
    acceptable level of service.
        In my opinion, Metro Matters is not a pie-in-the-sky,
    Cadillac of a plan. It is more like a Yugo, a lean, mean
    proposal to keep the system moving, accommodate ridership
    growth and allow the Federal Government to operate effectively.
    It is a program that recognizes that Metro is unique, that
    Metro is a key partner to the Federal Government and a vital
    national security asset. When Metro shuts down, the government
    shuts down.
        Adding to these capital needs are the aggravating factors
    of increased post-September 11 security requirements and the
    growing MetroAccess paratransit program. Both represent
    significant obligations to Metro's budget.
        The recent report of the Metro Funding Panel describes
    MetroAccess as a social service rather than a transit issue and
    did not take costs associated with the program into account
    when making its projections and recommendations. Call it what
    you will; it is a serious matter. In his testimony, Mr. White
    calls for a similar blue ribbon panel to consider MetroAccess,
    and I echo that call.
        Metro has sought to make the case for significant
    additional investment at the Federal, State, and local levels.
    We hope to examine, if not validate, their request today. That
    said, one can't credibly make these requests without also
    taking a close look at Metro's management and operational
    performance.
        Metro suffered a series of embarrassments and problems in
    recent years. For example, Metro's unveiling of the Metro
    Matters campaign coincided with the revelations that millions
    of dollars in parking revenues had gone missing. Last November
    saw an actual train wreck at the Woodley Park station, causing
    20 casualties and disrupting service in the Red Line. Metro's
    implementation of its SmartTrip card program has been fraught
    with difficulties, causing frustration for its customers.
        We have done and will continue doing the management
    oversight we are responsible for, but that will not distract us
    from addressing our larger duty: Ensuring a renewed Federal
    Government commitment to the Metro system. After all, even with
    these high-profile incidents, Metro has been described as one
    of the better-managed transit systems in the country.
        Metro recovers 57 percent of its costs through the fare box
    and other revenue, one of the highest cost recovery ratios in
    the country. But does this figure truly represent an
    efficiently run system? From our witnesses today, we will
    attempt to derive objective measures to determine where Metro
    stands. We will also hear from Mr. White and Mr. Dana Kauffman
    regarding steps they are taking to tighten Metro's ship and
    improve performance.
        There is a great deal at stake in maintaining the
    investment we have made in Metro. More than just keeping the
    proverbial trains running on time, Metro does serve a vital
    role in the day-to-day operations of the Federal Government. If
    there are looming problems, we need to address them before a
    crisis sets in. Today's hearing marks the starting point in
    that endeavor.
        I welcome all the witnesses to today's hearing. I look
    forward to their testimony.
        [The prepared statement of Chairman Tom Davis follows:]

        [GRAPHIC] [TIFF OMITTED] T9581.001

        [GRAPHIC] [TIFF OMITTED] T9581.002

        [GRAPHIC] [TIFF OMITTED] T9581.003

        Chairman Tom Davis. I now recognize the distinguished
    ranking member, Ms. Norton--you are ranking member today--for
    her opening statement.
        Ms. Norton. Thank you very much, Mr. Chairman.
        I know the entire region appreciates that you have called
    this important and timely hearing, and called it early in the
    appropriations season, I might add, a hearing on Metro's system
    that we are very proud of in this region, as indispensable as
    any system in the region, a system that delivers gas and
    electricity, all the rest of them.
        The region, yes, and the Federal Government, as you said,
    Mr. Chairman, collapses without the Metro system. But I am not
    sure that we have been hard enough on ourselves or, for that
    matter, on the Federal Government in recognizing the problems
    that I think we all have to take responsibility for.
        Metro's growing problems are the responsibility essentially
    of two large actors, the regional governments and the Federal
    Government, their failure of will to take responsibility for
    the funding needs of a system that the Federal Government gave
    everyone a head start on and expected us all to act
    responsibly. Part of this comes from the region's refusal to
    accept its identity as a coherent region, both for roads and
    for Metro. And that, as a coherent region, what we do with
    roads and Metro must reflect that regional identity.
        We see on the roads the most serious congestion at the same
    time that we have mounting Metro problems, but Metro was
    supposed to relieve congestion on the roads. We have one of the
    most congested areas on the roads, even though people are
    clamoring to get on Metro. That ought to tell us a great deal
    about what we have failed to do and what we need to do.
        I remember when we urged people over and over again to take
    the Metro. Guess what? We got what we wished for, and we are
    embarrassed by our success. The crowding may be the chief
    complaint of riders on the Metro, but, ironically, the Metro is
    unable to run its full complement of existing cars. At the same
    time, it needs more cars. Without any reliable capital funding
    source to purchase them, the region is going to end up paying
    more for them and considerably more for them again because of
    funding shortfalls for which we must take responsibility.
        Who is to be held accountable? Let us move first to the
    region, because I don't believe in going to the Federal
    Government and hopping over ourselves as if this were not our
    system as well.
        The region, all three jurisdictions, Virginia, Maryland,
    and the District, demand that Metro act like and perform like a
    regional transportation system without a regional funding
    source. I don't think it is fair to criticize Metro for not
    doing what other systems do with such a funding source.
        The region has no problems holding Metro accountable with
    free-flowing criticism, while refusing to alter the archaic
    funding source and formula that is at the root of Metro's
    problems. Metro is forced to live from paycheck to paycheck,
    almost entirely at the whims of local and State annual budgets.
        Now, face this irony. None of these jurisdictions have the
    alternative of not funding Metro. So why not designate a
    reliable source of funding if you have to come up with the
    money anyway? What are we saving ourselves? Well, we are
    costing ourselves. And I am sure we will hear today how not
    having a reliable source, living from paycheck to paycheck
    costs riders, costs the system, and keeps Metro from reducing
    additional costs that it is now carrying.
        I congratulate Metro for not raising fares for 7 or 8
    years. Although I must say that when you do raise fares,
    everybody is going to scream and holler. I don't even believe
    in that way of dealing with the problems of consumers. I think
    that, to the extent that the regional governments don't want to
    step up and do their part, unless you begin to raise fares
    gradually, over time, instead of letting it pile up and raising
    it at one time, there is no pressure on the regional
    governments to do their part. They could be screaming right
    along with the consumers when Metro decides to raise its fares,
    not to mention what a reliable funding source would do for
    improved management and maintenance of a system that is now in
    middle age.
        The continuing dependence on the present formula and
    funding source raises the most serious problems for one partner
    in particular, and that is the District of Columbia. The Metro
    serves only part of Maryland and Virginia, but Maryland and
    Virginia are not crazy. They fund--Maryland funds the Metro
    payment, the State of Maryland, entirely, and Virginia pays
    half of it. That leaves D.C., a city without a State, paying
    the largest share to bring huge numbers, increasing numbers of
    suburbanites into the District of Columbia. There is something
    wrong with that, ladies and gentlemen, where those with the
    smallest ridership, those who are least dependent because we
    have people who get around with buses and not only through the
    more costly Metro system are paying the largest shares as if
    this were 1967 rather than 2005.
        That is unsustainable for the District of Columbia to
    continue to do as Metro's costs rise, and I put everybody on
    notice now, we cannot sustain the present cost the present
    formula forces on us. The Revitalization Act, with the
    indispensable help of the chairman, took some costly State
    functions and left us with a whole lot of others, including the
    Metro payment. As Federal funding for mass transit has been
    reduced, States have stepped up and increased their funding.
    What is the District of Columbia, without a State, to do in
    that situation? The Metro payment is a leading cause of the
    District's structural imbalance. Unsustainable.
        A primary cost of Metro's major funding problem, however,
    is the region's major employer, the Federal Government. The
    Federal Government helped build the system, but not as a gift
    to the region. Not then, not now, and not ever does the Federal
    Government just go out handing out money. It did the same kind
    of quid pro quo that every other major employer does. It funded
    Metro more than it funded other systems because the Federal
    Government could no longer do without Metro.
        By the 1967 opening of Metro, we were already very late in
    opening a system. There had been no room for some time in D.C.
    for many Federal agencies. We had proliferated the Federal
    Government into the region. The Federal Government was by then
    a major regional employer. It needed Metro a whole lot more
    than the District of Columbia needed Metro.
        The continuing dependence of the Federal Government on the
    Metro system is seen by the subsidy that all of us support for
    riders to encourage the use of Metro. It makes good sense. The
    result, however, is intolerable crowding, traceable directly to
    the Federal Government and its employees, who are almost half
    of the ridership.
        The region has no alternative but to look to the Federal
    Government for a subsidy greater than that provided for other
    systems under TEA 21 because this system is indispensable to
    the daily functioning of the Federal Government itself.
        All of us have to do our part, and we all recognize that.
    Because everything we do in this region depends upon the Metro,
    beginning of course with our major employer, the Federal
    Government, including most especially today Homeland Security
    for the region in the post-September 11 era.
        Without Metro, there is no safe passage in the event of a
    terrorist occurrence. The region is a mecca for tourism and for
    national events. This implicates each and every Member of the
    House and the Senate, whose constituents come here to the tune
    of $20 million per year. We have scandalous environmental or
    clean air problems and remain stuck on stupid on that, perhaps
    about to lose some of our Federal funding. Metro is our best
    hope for further reducing air pollution.
        There are many problems--Chairman Davis mentioned them--for
    which management alone must be answerable. For example, when
    there is an accident at the Woodley Park station--I don't care
    how poor your capital funding is. I don't care how deteriorated
    the subways become. I spent a good part of my life in New York
    riding on the New York subways, and they were in deplorable
    condition, but they knew one thing: You had better get people
    there safely, no matter what the funding problems were.
        So there is no question that Metro has to be held
    accountable, even as the Federal Government and the regional
    governments don't do their part.
        At the same time, I have to say that I think Metro's Board
    and its management and its employees deserve credit, even
    gratitude, for doing their job a lot better than the Federal
    Government and regional founders and funders have done their
    job. We have shirked our financial and planning
    responsibilities for making sure that a world-class system
    remain world-class.
        I am pleased that Metro has a 10-year plan for improving
    and preserving the system that has been considered one of the
    best in the country. I applaud you for opening yourselves to
    consumer scrutiny, even for matters that you may not be able to
    entirely control, to your advisory committee notes and your
    town meetings, your Board meetings. All of that feedback is
    important for a system like your own. I am sorry it didn't
    exist all along. I welcome that you have opened your Board
    meetings as well to consumers, and I especially welcome today's
    witnesses for any advice and counsel they can give us on how we
    can get the Federal Government and the regional governments to
    move to do their part.
        Thank you very much, Mr. Chairman.
        Chairman Tom Davis. Thank you very much.
        Mr. Van Hollen.
        Mr. Van Hollen. Well, thank you, Mr. Chairman; and I will
    be brief, because I am looking forward to the testimony of our
    witnesses. But I do want to thank you for holding this hearing
    on a very important issue to our region.
        As we all know, people who are out there in traffic or in
    Metro every day in this region know and, as has been said, we
    are clearly, from a transportation point of view, one of the
    most congested areas in the country. And modernizing and
    upgrading and I believe eventually expanding Metro is going to
    be an essential part of the strategy for reducing that
    congestion or, at the very least, at least not getting worse.
        The danger is, given the projected growth, if we don't do
    something on both Metro and other parts of our transportation
    system, it is not that we are going to improve congestion. We
    are going to go from a crawl to a dead stop if we don't do
    something and don't do something about it now.
        Now, Metro has been a win-win for this area. It is
    obviously a win for people who use Metro. It is a great benefit
    to people who are driving, because those are people taking
    Metro who are, obviously, not on the roads with the drivers. It
    is also an essential part of trying to meet the clean air
    standards in this region, which is something that is always a
    struggle for this particular area. So I think it is essential
    the Federal Government do its part in this area.
        Metro has been, in many ways, a victim of its own success.
    Its ridership has doubled, as we heard; and it is projected to
    increase substantially. I was a regular workday Metro rider for
    many years, for about 12 years, and I could see over that
    period of time that it was getting more and more crowded,
    especially during rush hours. Sometimes a train would come, and
    you just couldn't get on. It was packed.
        So it is essential that we provide the revenue to expand
    the capacity so we get more cars on the rails, that we get more
    buses to provide people the transportation links that are
    essential. Because, if we don't, it is going to hurt our
    economy, it is going to hurt our quality of life, and this
    region is going to become a place that is not nearly the kind
    of place to live that it is today even under the difficult
    congestion we have today.
        So I am really pleased that Metro has come up with a plan.
    I think the Federal Government has to come up with its part of
    the $1.5 billion and its share of the $3.4 billion, larger
    number, and I look forward to working with my colleagues to
    accomplish that.
        Thank you, Mr. Chairman.
        Chairman Tom Davis. Thank you.
        You have heard from us. We are ready to hear from our very
    distinguished panel, our witnesses today.
        We have Dana Kauffman, who is the new chairman of the Board
    of the Washington Metropolitan Area Transit Authority.
        Let me just say, on a personal basis, I have great
    confidence in Dana. I knew him as an aide to a young
    supervisor, Joe Alexander in Fairfax County, whose name was
    Metro Joe. Joe was also chairman of the Metro Board. We have
    named one of our transportation centers after him. But, Dana,
    we are just happy to have you here in your initial appearance
    before this committee; and, just from a personal basis, I am
    just proud to have you there. I am very confident of your
    abilities to lead, and look forward to you.
        Mr. Kauffman. Thank you, sir.
        Chairman Tom Davis. We also have Richard White, the general
    manager and chief executive officer of the Washington
    Metropolitan Area Transit Authority. I have seen Dick work in
    the subways. He takes the subway in every day to work, so he is
    a rider and is running the whole operation. William Millar, who
    is the president of the American Public Transit Association,
    thank you for being here. Mr. Mortimer Downey, very highly
    regarded. He is the chairman of the board of PB Consult, Inc.
    And John J. Corbett, Jr., the co-founder of Metroriders.org.
        Thank you all for being here.
        I am going to start with Chairman Kauffman and move on down
    the line.
        Dana, we have buttons there. Your entire statement is in
    the record, so it is all there. Questions will be based on
    that.
        But the light will turn green when you start, it turns
    orange after 4 minutes, red after 5. If you need to take a
    little bit more to sum up, I don't want to limit you, but that
    is kind of--we would like to keep it to close to 5 minutes for
    everybody. But this is your maiden speech here. We want to make
    sure you get all your points in. This is an important issue. So
    thanks for being with us. You are on.

     STATEMENT OF DANA KAUFFMAN, CHAIRMAN OF THE BOARD, WASHINGTON
                  METROPOLITAN AREA TRANSIT AUTHORITY

        Mr. Kauffman. I appreciate it. I hope it doesn't violate
    the formal protocol here, but I would like to begin by saying
    ditto to your comments, very much captured my concerns. Also,
    Ms. Norton, I appreciate on behalf of all the Metro employees
    your recognizing their hard work. Oftentimes, the success has
    been extremely painful, and we are working our way through it.
        Good morning, Mr. Chairman and members of this committee.
    Thank you very much for inviting me today to testify. As
    stated, my name is Dana Kauffman, and I am a Fairfax County
    Board member and currently serve as the chair of the Washington
    Metropolitan Area Transit Authority. I am pleased to have the
    opportunity to answer your questions and tell you about some of
    the fundamental reforms and initiatives that the WMATA Board is
    implementing to improve accountability at WMATA. And that key
    word, ``accountability'', is certainly going to resonate
    throughout all of our testimony.
        I will address your specific questions momentarily. First,
    I want to acknowledge some recent good news about Metro.
    Although WMATA's Board and senior staff have just come through
    a year of tough challenges, many of which are subject to
    questions from this committee, it is important to note that we
    added 10,000 new daily riders in December, a strong sign that
    we are doing something right.
        I am also heartened to see the major article in last
    Sunday's Washington Post reporting the results of recent
    commuter surveys that present more positive news about Metro.
    For example, of those who ride Metro, 88 percent rate our
    service good or excellent in terms of reliability, and 77
    percent rate Metro good or excellent in terms of value for the
    money. These are encouraging numbers, and we look forward to
    working to increase these ratings even further.
        Now to your specific questions. You asked about the
    challenges posed by Metro's reliance on multiple funding
    partners, including the Federal Government. This structure has
    indeed tested WMATA's Board through the years. When Congress
    enacted the National Capital Transportation Act in 1960
    authorizing Maryland, Virginia, and the District to negotiate
    an Interstate Compact, it recognized the necessity of
    continuing Federal financial support, declaring that the
    creation of certain major transportation facilities are beyond
    the financial capacity of local governments in this region.
    That still holds true. WMATA is unique, and I would again
    emphasize unique, among Interstate Compact agencies in serving
    two States, the District of Columbia, and the Federal enclave.
        The WMATA Compact specifies how the 12 members of our Board
    are appointed, how we are financed, and how we procure goods
    and services and the jurisdiction of our police. As to whether
    the Compact should cover additional areas, no obvious or
    geographic expansions are necessary at this time.
        Various amendments have refined and clarified Compact
    provisions as needed. For example, in 1997, a Compact amendment
    brought WMATA into conformity with Federal procurement
    practices. In 1997, the Compact was expanded geographically to
    include Loudoun County, even though it does not contribute
    financially to WMATA because we do not yet provide services
    there. In addition, WMATA occasionally goes beyond its
    jurisdictional boundaries through specific contract-for-service
    arrangements, such as when we won competitively bid-for
    contracts to provide bus service in Prince William County, VA,
    and Montgomery County, MD.
        The Board meets regularly, sometimes we think all too
    often, both as a full Board and in smaller committees to
    consider budget, policy, safety, operations, audit, planning,
    and development matters. We work closely with Maryland,
    Virginia, and the District of Columbia, and also with two
    counties and three cities in Virginia and two counties and
    numerous municipalities in Maryland and the Federal Government.
    The range of opinions, backgrounds and experience among these
    stakeholders sometimes makes consensus difficult. Moreover,
    since inception, the Board's governance has included a
    jurisdictional veto, that is, that no proposal can pass without
    at least one supporting vote from each signatory.
        You asked, does this represent the best governance
    structure? Maybe not. Like democracy, it isn't perfect, but it
    is better than the alternatives. Given the substantial Federal
    financial contributions to WMATA, perhaps there is a role for
    the Federal Government at the table. If that would help to
    forge a stronger partnership, the Board would be happy to
    discuss the idea.
        You ask what steps the Metro Board has taken to improve
    oversight. The Board has an active Audit Committee that meets
    publicly each quarter. In the second quarter of 2004, the Board
    received 42 internal audits from WMATA's general auditor, and
    recently we began to share these audit reports publicly to
    increase accountability.
        In addition, an Ernst and Young audit of WMATA's fiscal
    year 2000 to 2004 operating costs recommended several areas of
    improvement, and we have worked to make those happen.
        Yesterday, I announced my intention, as Board Chair, to
    promote new openness and accountability in the way Metro
    operates. Specifically, we again are establishing a riders
    committee, making our public comments added to our Board
    meetings, continuing to hold town hall meetings, and improving
    access to our records and operations.
        Again, this is a key issue when it comes to funding. We
    have to show that we are real about this.
        In the Washington Post poll I mentioned, nearly 58 percent
    of the region favors establishing a new way to fund Metro. My
    Board of colleagues and I believe now is the time for action on
    the Metro Funding Panel's recommendations. We want to make sure
    the region's policymakers make this blue ribbon panel real, and
    we look forward to your counsel and support as we embark on
    that task. It is key that the Federal Government remain a full
    partner in this effort, just as it was 50 years ago when we
    established what is today known as ``America's Subway.''
        I thank you for the opportunity to be testifying here
    today.
        Chairman Tom Davis. Thank you very much, Dana.
        [The prepared statement of Mr. Kauffman follows:]

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        Chairman Tom Davis. Mr. White. Thank you.

        STATEMENT OF RICHARD A. WHITE, CHIEF EXECUTIVE OFFICER,
             WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY

        Mr. White. Thank you.
        Good morning, Mr. Chairman and members of the committee.
    Thank you for the thoughtfulness of your opening remarks and
    also for the opportunity to testify before you this morning.
        My name is Richard White, and I am the general manager and
    chief executive officer of the Washington Metropolitan Area
    Transit Authority. I request that my full statement be inserted
    for the record, along with the several attachments to my
    testimony, including the answers to the six questions posed in
    your invitation letter, a 2004 report by the Brookings
    Institution, and a report issued in January 2005, by the Metro
    Funding Panel.
        More than 50 years ago, the Federal Government in this
    region forged a vital partnership to pursue a grand vision to
    design and build a rapid transit system that would serve the
    Federal Government and be worthy of the Nation's Capital. Along
    the way, and approximately 30 years ago, responsibility for
    operating and maintaining a regional bus system was also
    transferred to Metro.
        By any measure, Metro has succeeded beyond anyone's
    expectations in meeting the goals that Congress set. Last year,
    Metro provided 336 million passenger trips on rail and bus.
    Metro rail is the second most heavily used rapid transit system
    in the Nation, and it does carry on a daily basis the
    equivalent of the combined subway ridership of BART, MARTA, and
    the SEPTA subway systems, and Metro bus is the fifth most
    heavily used bus system.
        The 103 mile adopted regional Metro rail system cost $10
    billion to construct, approximately two-thirds of which was
    paid by the Federal Government. The value of this asset today
    represents $24 billion in current dollars. Metro has provided
    an excellent return on this investment, particularly to the
    Federal Government. Designed specifically to serve Federal
    facilities, Metro serves more than 300 Federal agencies today,
    and 47 percent of Metro's rush hour riders are Federal
    employees. What makes the Metro system undeniably unique is
    that Metro was built primarily to serve the Federal work force
    and to serve the national capital area, and it has done so
    admirably for decades.
        But Metro is now a mature system, and it faces a new set of
    challenges. Our infrastructure is aging. Sixty percent of our
    rail system is now more than 20 years old, and daily ridership
    has grown by 33 percent in the last 8 years. The cost of
    operations, maintenance, and rehabilitation have outstripped
    the ability of our State and local funding partners to pay. In
    fact, Metro is the only public transportation system in the
    country without a dedicated funding source to pay for its
    operating and capital funding requirements. The need to address
    this shortcoming is becoming more and more urgent.
        The June 2004, report by the Brookings Institution,
    revealingly entitled, ``Washington's Metro: Deficits by
    Design,'' concluded that WMATA receives less than 2 percent of
    its capital and operating funding from dedicated funding
    sources, as compared to the national average of 34.7 percent.
    In addition, it called WMATA an institutional orphan, with no
    clear funding ownership and a funding structure that creates
    recurring financial crises. It predicts that these funding
    shortcomings threaten to undo more than a quarter century of
    success.
        Mr. Kauffman's and my extended testimony describe a number
    of organizational improvements designed to make our service
    more reliable, responsive and accountable to the public; and I
    would be very happy to expand on these in response to your
    questions. But taking necessary and appropriate management and
    policy actions can achieve only so much. At some point, we need
    more resources. We must reinvest substantially in the system to
    avoid deteriorating service and unmanageable crowding.
        Our State and local funding partners stepped up to the
    plate last fall and signed the Metro Matters funding agreement,
    substantially increasing their funding requirements through the
    year 2010. This is a $3.3 billion 6-year funding plan to
    address a backlog of deferred capital investments and to help
    relieve system overcrowding.
        There are some charts which we have provided to the
    committee and which are posted over there which show
    historically how the system has been funded both from 1975 to
    2003, a current snapshot of our 2005 budget, and what it would
    be if the Metro Funding Panel's recommendations were to be
    implemented for the years 2008 to 2015. I think they are quite
    revealing.
        An independent Metro Funding Panel validated the Brookings
    Report in January 2005. After an exhaustive review, the panel
    found that, even after accounting for periodic future fare
    increases and inflationary adjustments to existing State and
    local subsidies, Metro faces a $2.4 billion shortfall during
    the period of 2008 to 2015, and that excludes a $1.1 billion
    projected shortfall associated with paratransit costs. The
    panel recommended meeting the shortfall through a combination
    of dedicated regional funding and a commitment of $1.2 billion
    in new Federal funds beyond the surface transportation funding
    that we receive today.
        Our message today is that the Federal Government and the
    region have made a substantial investment in an extremely
    valuable asset and one that is designed to serve the Federal
    work force in the national capital region. We must act
    expeditiously to protect that substantial investment. Now is
    the time to recommit to the original Federal, State, and local
    partnership and to put Metro on a stable funding course to
    avoid it slipping into serious disruption.
        I commit to you that we recognize and are facing up to our
    need for improvement. However, a healthy dose of funding is
    required to ensure that the national capital region continues
    to have a reliable transit system that Congress mandated a half
    a century ago.
        We look forward to working with you, Mr. Chairman, and the
    committee and the entire national capital region to address
    this urgent matter. Thank you.
        Chairman Tom Davis. Thank you very much.
        [The prepared statement of Mr. White follows:]

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        Chairman Tom Davis. Mr. Millar, thanks for being with us.

        STATEMENT OF WILLIAM MILLAR, PRESIDENT, AMERICAN PUBLIC
                       TRANSPORTATION ASSOCIATION

        Mr. Millar. Mr. Chairman, it is my pleasure to be here with
    you today and with my colleagues, and I appreciate the
    invitation. As president of the American Public Transportation
    Association, our association is the Nation's largest trade
    organization that represents both the providers of public
    transportation, such as Washington Metro and New York City
    subways and so many others, as well as the private sector
    companies that supply our industry.
        Also, I am here because I am a regular Orange Line rider.
    This week I used Metro for my regular business, and this week I
    happened to ride all five of the Metro rainbow colors. Orange,
    blue, red, yellow and green. So I am really pleased for the
    interest you are taking in this.
        Chairman Tom Davis. It looks like the recovery ratios are
    going up this week.
        Mr. Millar. Hey, listen, you made money on me this week.
    For sure.
        Anyway, you asked me to comment on three particular areas,
    and I will be happy to do that, and then, at the appropriate
    time, expand on those or get into other areas you might prefer.
        First, related to measuring and benchmarking transit system
    performance. Let me be clear, each community that our members
    operate in is different. Each has unique characteristics. APTA
    itself does not rank its members in terms of their performance.
    However, we do encourage our members to set goals and then set
    appropriate performance measures for their situation and then
    to benchmark against those performance measures. In that
    regard, we also collect and publish a great deal of data that
    allows our members to make some of these comparisons.
        We encourage effectiveness and efficiency. We believe these
    are essential elements to good customer service. And we
    encourage our members to work with our local and State
    governments, with business and community groups to assess how
    well the system is performing.
        In this regard, I think the activity of the blue ribbon
    panel that has already been referred to in testimony today as
    well as the work of the Brookings Institution last year are
    clear examples of a good performance measurement and
    benchmarking activities. I have reviewed this material. I find
    it to be of highest professional standing, very good work, and
    I very much support the conclusions that are contained in both
    those reports. In short, the reports say, and I believe this to
    be true, that Metro is effectively managed and operated, but it
    is going to need help financially if it is going to meet the
    future growth of this region.
        I did take a chance to look at some additional material,
    though, outside those reports; and one area that constantly
    comes to everyone's attention is how well is the labor force
    being used, how are labor costs being managed.
        In an organization such as Metro, labor costs are typically
    the largest portion of the costs of a system with good reason:
    It is a service provided by people.
        Since 1996, some numbers that I reviewed from a recent
    study that an APTA member did show that real wages in the
    public transit industry as a whole since 1996 have been growing
    at a rate much slower than those in the private sector. So then
    I took that general industry look, and I said, well, how does
    it apply to Metro?
        In reviewing multi-year labor settlements last year in our
    industry, there were 57 of them, including WMATA's; and what I
    found was that WMATA's increase of labor cost was the 12th
    lowest of the 57. When you look at that, it represented only
    about 57 percent of the average of that group. Clearly, Metro
    is doing what it can to keep its costs and its largest single
    cost in reasonable shape on this and, more than reasonable,
    below certainly the averages we would expect. So I think that
    says a lot about performance.
        Turning to the issue of the second question you asked,
    which is best practices by public transit systems for
    implementing capital and funding capital improvement programs.
    Again, there are many different ways that transit programs are
    funded, but, in my experience, a couple of characteristics are
    essential to the most successful ones.
        First, we need an--obviously--source that is big enough to
    do the job. Second, it must grow with the needs of the system.
    Third, it must be dedicated so that long-range planning is
    real, so that good plans can be made and carried out over time.
        I wanted to bring to the committee's attention and with
    your permission would put in the record a survey of State
    funding for public transportation. We worked with the U.S.
    Department of Transportation, Bureau of Planning Statistics and
    other organizations to put that together.
        Chairman Tom Davis. Without objection, it will be put in
    the record.
        Mr. Millar. Thank you, sir. I believe there is a wealth of
    information in there that may be useful as the committee
    considers its future option.
        [Note.--The information is on file with the committee.]
        Mr. Millar. The idea of guaranteeing funding is very
    important in dedicating funding, and we see examples at many
    levels of government where the benefit of this is clear. For
    example, at the Federal level, you all passed, and I commend
    you for it, in 1998 the TEA 21 Act that guaranteed for the
    first time funding for public transit. Well, what have we seen?
    We have seen that the money the transit systems were promised
    actually came, that the plans they promised the public they
    were able to implement, and a great deal of uncertainty has
    vanished from the system.
        A similar experience in States that do this and localities
    that do this. It guarantees to the public that they will get
    what they paid for.
        It also helps in other ways. By having a guaranteed source
    of funding, it makes it much easier to attract private
    financing to public transportation, because, as we know, the
    private industry has this strange notion they would like to be
    paid back when they actually invest in things. So certainly
    having good, dedicated, stable and growing funding enables us
    to do this.
        Now, to get a dedicated funding source, the lesson we have
    learned from other regions is that you have to build the public
    support for this; and you can't look at just what you need
    today, you must look what you need over the next 20, 30 years
    or more. We know--others have already referred to it in this
    testimony--our area is going to grow and with it congestion. We
    already know how much congestion there is in this area. We need
    to make the case to people, too, that it is not just people
    like me who ride the system who benefit from this. It is indeed
    the entire region and the States that are involved and the
    District of Columbia in total that benefit from this.
        I brought along another report that again I would like to
    suggest we put in the record. It is entitled, ``How Transit
    Benefits People Who Do Not Ride It: A Conservative Inquiry.''
    It is by Paul Weyrich and Bill Lind. Mr. Weyrich, as you may
    know, is the founder of the Heritage Foundation, certainly
    great conservative credentials.
        Chairman Tom Davis. Without objection, that will be put in
    the record as well. Thank you.
        Mr. Millar. Thank you very much.
        [Note.--The information is on file with the committee.]
        Mr. Millar. One of the things Mr. Weyrich points out is the
    benefits for people who do not ride include such things as the
    overall economic growth of the region, the growth in tax values
    of the region and that helps in many, many ways.
        The third area you asked me to address was to try to shed
    some light on the lessons learned around the country related to
    paratransit services and the providing of paratransit services.
        Paratransit service, particularly for persons with
    disabilities, has been one of the most important outcomes of
    the Americans With Disabilities Act. It has allowed an
    unprecedented level of mobility for persons that, quite
    frankly, were left out of our society in many ways over a long
    period of time.
        Now this increase in mobility, where we have seen this
    service offered in paratransit in the last 10 years go up by
    over 100 percent around the country, this increase in mobility
    has certainly been beneficial to the persons with disabilities
    and very beneficial to the communities in which they travel,
    but it has also had an obvious impact on transit agency capital
    budget costs and operating costs. For example, in the last 10
    years we have seen capital costs for paratransit rise
    nationally by 163 percent and the operating costs rise by over
    200 percent in that same time period.
        By way of example, in 2003, the last year for which I have
    complete statistics, transit agencies spent some $2.3 billion,
    about 8.8 percent of their operating budgets, to provide
    complimentary paratransit services, to provide service to
    almost 111 million riders. So its benefit can't be argued. It
    has been very beneficial. But the cost effect on transit
    systems, and particularly on systems such as Metro that do not
    have a reliable and growing source of funding, is equally
    undeniable. We do believe additional funding is needed in this
    area.
        We do think there are other things that can be done. We do
    want to encourage the Federal Government to encourage the
    coordination of social service transportation costs. We note a
    1999 GAO report that found there was some 62 different Federal
    human service transportation programs in the Federal
    Government, that the spending, depending on how you counted it,
    ranged from $4 to $7 billion a year. That is almost as much as
    the Federal Government invests in all of public transportation
    every year. Certainly better coordination of the spending of
    that money to make sure it is done as efficiently as possible
    is very important.
        We certainly applaud the work of the Federal Transit
    Administration and other Federal agencies who are trying to get
    their act together, so to speak, through something they call
    United We Ride. And certainly we in the public transit industry
    pledge to encourage that and work them in any way we can.
        In conclusion, Mr. Chair, from the perspective of one who
    has 33 years of experience in the public transit industry as
    well as is a regular Metro rider, as I have already said, I
    find the Metro system to be a well-run transit system. It faces
    many constraints, which I am sure the committee is well aware
    of. But within those constraints it is certainly one of the
    finest systems and one of the best-run systems that I know
    about anywhere in the world.
        I look forward to your questions and expanding on these
    points.
        Chairman Tom Davis. Thank you very much.
        [The prepared statement of Mr. Millar follows:]

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        Chairman Tom Davis. Mr. Downey, you have had a lot of
    experience with systems in New York and elsewhere; thanks for
    being with us this morning.

      STATEMENT OF MORTIMER L. DOWNEY, CHAIRMAN OF THE BOARD, PB
                             CONSULT, INC.

        Mr. Downey. Thank you, Mr. Chairman, Ms. Norton, and
    members of the committee, for holding this hearing--it is very
    timely--and for inviting me to testify.
        My name is Mortimer Downey, currently chairman of P.B.
    Consult, but I have also served as Deputy Secretary, U.S.
    Department of Transportation, and for many years, at the MTA in
    New York. And like my two colleagues, I am a daily rider on the
    Orange Line from Vienna.
        I also recently had the opportunity to serve as the staff
    director of the Blue Ribbon Panel, it has been referred to
    today. I know you have its report, and I certainly commend it
    to you, not only for its unanimous recommendations as to
    Metro's needs, but also for the data it provides on the
    operations system, on how it compares with others around the
    country, and on where Metro should be going.
        When I look at that issue from the perspective of having
    been in New York, I can tell you that is a place you do not
    want to go--New York is fine, but the condition of its
    transportation system, when I joined it in 1981, was
    deplorable; it was deplorable as a function of lack of
    reinvestment and lack of funding for the system's needs. It was
    below the standard of service, almost below the standard of
    safety; that is not where we want to see the system go. It took
    us years to turn that system around; the job isn't complete
    yet, but they have made enormous progress. They made that
    progress because elected officials, local and Federal, made a
    commitment to investment, made funding available on a dedicated
    basis, made the funding available, and held us at the MTA
    accountable for achieving results.
        That is what needs to happen here if we don't want to see a
    Metro future like the New York past. The recently adopted Metro
    Matters capital program is a good first step, but it needs to
    be followed by more permanent solutions.
        The panel, the Blue Ribbon Panel, made up of bipartisan
    citizens from around the region, strongly endorsed that
    principle of reinvestment, as well as the importance of Metro
    services, in meeting the transportation and economic needs of
    the region.
        Chairman Penner of the panel, Rudy Penner, in his
    transmittal letter, stressed the primary conclusions of the
    report, the fact that there will be a shortfall of revenues--we
    are comfortable with the fact that had to be dealt with--and
    that two partners have to deal with those shortfalls, the
    Federal Government should be a significant participant,
    particularly for capital maintenance and system enhancement,
    and the jurisdictions in Maryland, Virginia and the District of
    Columbia, in the panel's view, should mutually create and
    implement a single regional dedicated revenue source. The panel
    recommended the sales tax, but that is a choice the region and
    the jurisdictions need to make.
        The charts show, particularly the one on the right, that
    partnership has been the watch word for Metro's success over
    the years. The center chart is what the panel recommends going
    forward. Again, a partnership enclosing the increment needs of
    the system through a sharing of local jurisdictions, the
    Federal Government and the riders.
        Metro has been successful over 30 years, holding together
    its new construction program largely by the power of that
    regional Compact. It is a truly amazing feat when you look
    back. But there is no comparable partnership for ongoing
    operations and support. Metro has to go back to its partners
    every year, it would be like recapitalizing your business each
    year, it is not a way to really focus on the important issues
    of management.
        So each of the beneficiaries of Metro service, in our view,
    should be a contributor, the riders, who today, in fact, pay
    fares above the national average and contribute more than the
    average to the support of the system, but that reflects the
    level of service and the nature of their options. The region's
    governments are interested parties and beneficiaries in keeping
    the economy strong, in meeting environmental goals and
    supporting a truly regional set of solutions. But I think the
    Federal Government also belongs at that table. Metro service,
    carrying a significant portion of the government's workers, is
    essential to day-to-day operations, and critical in the event
    of national emergencies.
        Other countries do recognize the special needs of their
    national capital in terms of transit investment. I have been
    working over the past year in London on the rebuilding of that
    system. There is now a partnership in place, $20 billion to be
    spent over the next 5 years, about two-thirds of it from the
    national government, one-third of it raised by debt from the
    system, but it recognizes the need of that region and the
    special responsibility that their national government has. Our
    Federal Government can do the same; not in lieu of local
    effort, but as a partnership to generate workable solutions.
        Again, I commend the committee for timely inquiry into this
    important topic, and I would be happy to answer any questions
    now or for the record, as well as to work with you in
    developing the long-term solutions.
        Chairman Tom Davis. Thank you very much.
        [The prepared statement of Mr. Downey follows:]

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        Chairman Tom Davis. Mr. Corbett, thanks for being with us.

     STATEMENT OF JOHN J. CORBETT, JR., CO-FOUNDER, METRORIDERS.ORG

        Mr. Corbett. Thank you, Mr. Chairman, and members of the
    committee.
        MetroRiders.org is the recently established transit users
    group to help improve public transit services in the Washington
    Metro area. We appreciate the invitation to present our views
    on the current problems and the future needs of WMATA.
        MetroRiders.org was formed primarily because transit riders
    want a safe, more reliable Metro system, efficient management,
    and better coordination with the other bus and train systems
    serving our area.
        Whether or not you personally use the Metro system--and I
    am sure you cannot beat the percentage participation of our
    panel today--you have heard from your staffs that many Metro
    trains are chronically overcrowded, escalators and elevators
    often don't work, rail cars and busses too often break down,
    causing riders to be late for work or getting home. A lot of
    worried looking congressional staffers have to hurry up the
    escalator at the Capitol South station when Metro problems
    lengthen their commute.
        Conversations with Capitol Hill staffers about Metro too
    often are discussions only about Metrorail. To our transit
    riders, Metro also means bus service and the Metro Access
    Paratransit system as well.
        The committee's invitation indicates interest in the
    results of the survey we have conducted on our Web site. In
    short, some 1,500 respondents rated Metro's overall service
    quality as barely fair, two on a scale of four; the results are
    summarized in the first attachment. Mr. Chairman, I compared
    those somewhat negative results with the results of the
    Washington Post survey this past Sunday, and the survey reports
    in the Post are for people who have used the Metro system as
    least once; the people who respond to our Web site are daily
    dedicated Metro users. Even though they have expressed
    dissatisfaction with Metro's operations, our organization's
    objective is a positive one.
        Attached to our testimony is a list of our organization's
    short-term objectives. As you may notice, we believe everyone
    needs to do a better job, and that includes passengers.
        Help from WMATA is needed from Congress as well. Today's
    hearing highlights the effort needed from the Maryland and
    congressional delegations, and from the District of Columbia's
    delegate to help fund WMATA's capital needs. You know these
    better than I, the surface transportation bill is being marked
    up this month. There is an opportunity there for large--high
    levels of formula funds for WMATA for both rail and bus. I am
    sure you will be maximizing your discussions with those
    authorizes.
        On the appropriations side, the Department of
    Transportation Treasury bill generally provides an opportunity
    for earmarks for WMATA to help acquire additional rail and bus
    systems. We hope you will be active again this year, as will we
    and the riders, to try to maximize earmarks for the WMATA
    system.
        Security is a very difficult issue, as you know. You know
    the situation that occurred in Madrid. Even though the
    Department of Homeland Security Appropriations Committees
    generally don't do any earmarking, we hope you will communicate
    the needs of the WMATA staff for high levels of security
    funding in the 2006 process.
        Although WMATA may now be open to setting up a Riders
    Advisory Committee, our organization is convinced that this
    step, however well-intentioned, is too timid a response for
    Metro's users needs for input into WMATA decisionmaking. In
    recent months transit riders were angered to read how few WMATA
    board members actually use the bus and rail systems whose
    funding, whose operation and whose culture they control. Only
    with the addition of a new board member specifically to
    represent Metro system users will our needs truly be heard.
        WMATA's structure and organization is determined by the
    Interstate Compact involving Maryland, Virginia and the
    District of Columbia. A new WMATA board member cannot be added
    without the adoption of substantially similar legislation by
    the three jurisdictions, followed by an approval from Congress.
    Frankly, only amending the U.S. Constitution seems a more
    complex process than modifying WMATA's structure to add one
    board member. We hope Congress will help facilitate an
    amendment to this Interstate Compact to add a rider
    representative to the WMATA board. The New York City Transit
    System has a board member appointed solely to represent riders,
    transit riders here deserve no less.
        Finally, Mr. Chairman, you have discussed the Metro Funding
    Panel report. Upon its release, unnamed officials in some
    jurisdictions intimated in the press that ``This isn't the year
    for increasing taxes.'' The issue has been stalled ever since.
    I understand that a committee of the Virginia legislature early
    this week just voted against any favorable consideration of any
    funding for Metro this year.
        Mr. Chairman, we are fearful that without some
    congressional leadership, there never will be a good year to
    solve WMATA's chronic funding problem. We hope you will
    consider calling another Metro oversight hearing later this
    spring to receive testimony from Governors Erlich and Warner,
    Mayor Williams and the chief executives of the other
    contributing jurisdictions.
        If you were to seek their reactions to the Metro Funding
    Panel's report, and whether they would commit to meeting on a
    date certain with the other involved jurisdictions, your
    intervention could offer a tremendous lift to this unresolved
    important issue.
        Again, our organization is grateful to the committee for
    having scheduled today's hearing, and for the opportunity to
    present our views. Thank you.
        [The prepared statement of Mr. Corbett follows:]

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        Chairman Tom Davis. Thank you. This won't be the only
    hearing we do on this. If we are serious about an authorization
    bill, we have to lay appropriate groundwork, bring the States
    into this as well, and some of the other localities, and we
    will coordinate with you in terms of how we do this and how we
    orchestrate it.
        Mr. Corbett, let me just start--you had an interesting
    suggestion about adding a rider to the Metro board; how is that
    selected in New York?
        Mr. Corbett. Maybe Mort can give us more detail, but my
    understanding is there are nominations made; I think the
    Governor of New York selects a person to represent the riders
    on a panel, and that person changes over a period of time. But
    that person, as I understand it, has the function of
    representing the rider to make sure the board is sensitized to
    people who have daily experience with the system. We are having
    internal discussions; maybe Ms. Norton could give us advice as
    to whether it should have a voting representative or a non-
    voting representative.
        Chairman Tom Davis. Well, I mean, I think the membership of
    Metro is something we need--I have no idea where we go with
    this, thinking out loud is dangerous, but to play with it is
    something that we might need to look at.
        And I think, Mr. Kauffman, your comments, you just said
    let's talk about it, so I don't want to have a formal
    discussion here. I know you do have a number of Metro board
    members that ride the subway now--I know Mr. White rides it
    every day; Dana, you ride it, other people--so you have other
    board members, but they are not there as Metro reps, they
    represent taxpayers and community interests and everything
    else. So I think that is something I think we look at as we
    move forward, and we will try to continue the dialog on that.
        Mr. White, why should the Federal Government fund Metro in
    ways it does not fund other subway systems in the country? This
    is our dilemma. We would love to be able to get into the TEA
    LU--or whatever the new transportation bill is called, and I
    know Senator Sarbanes is trying to do that; but the practical
    effect of that, because we have asked for additional money for
    Dulles rail and other areas out of this, the practical side of
    that is we are going into a grab bag where we are going to be
    limited in our ability to get it done.
        I mean, certainly, Mr. Van Hollen will support it, and I
    will support it and Ms. Norton, who is on the committee, will
    support it--she won't be able to vote with us on the floor,
    unfortunately. We are working on that. But the fact is that is
    unlikely to happen. And if you look at traditionally how Metro
    has been funded, it has been a completely separate pot, feeling
    that the Nation's Capital and the work force here basically
    deserve a separate consideration. And if you look at the three
    previous Metro authorizations, that is how it is done.
        So, I mean, I will take the money from wherever we can find
    it, but I think we are going to need additional authorization
    that is going to need some administration buy-in, but we are
    certainly going to push it because it is needed; and if we
    don't, we are not even protecting the current investment. But
    am I missing anything.
        Mr. White. No, Mr. Chairman, I think you put your finger
    right on it because it was recognized that we needed a system
    to serve the Federal work force in the national capital region.
    The Congress, in that recognition, funded specially--outside of
    any Surface Transportation program--the construction of the
    system, and actually invested over $6 billion to that end
    through three separate authorizations of the Congress,
    independent of the Surface Transportation program.
        So I think the question is, now that the system has matured
    and requires reinvestment, is the time appropriate for this
    separate view of this from the Congress, in its recommitment
    with State and local government, to help keep this investment
    in a state of good repair so it can serve the Federal work
    force and the national capital region in the future, and
    perhaps outside of the Surface Transportation program.
        Chairman Tom Davis. Let me ask Mr. Downey, you have had
    experience in the New York system. If a system gets into a high
    level of disrepair, the costs at that point become really
    astronomical, don't they?
        Mr. Downey. Just like your house, if you don't do anything
    with it for years, what you then have to do with it is
    enormous. So the downward spiral of lack of investment, lack of
    ridership, safety issues is clearly a point of a place not to
    go.
        Chairman Tom Davis. Well, let me ask you, Mr. Millar, with
    your knowledge around the country, are you aware of any
    instances where the lack of reinvestment has gone on and they
    have actually had to close stations and have undergone that
    kind of problem?
        Mr. Millar. Yes, sir, that has occurred. Certainly New York
    is an example, Philadelphia is another example; Pittsburgh has
    a line that was closed after years of neglect. And certainly, I
    would second Mr. Downey's statement, in our experience
    rehabilitation after a certain point is just very, very
    expensive, better to keep up with it as you go along.
        Chairman Tom Davis. OK. Thank you.
        Mr. Kauffman, let me ask you, in January, the Metro Funding
    Panel called for a regional sales tax, deserves a dedicated
    roll. Would it be fair to have Federal representation in the
    WMATA board if the Federal Government came in with an infusion
    of cash? Is that open for discussion, do you think, with the
    jurisdictions?
        Mr. Kauffman. I think it is definitively open for
    discussion because certainly--looking, for example, Mr.
    Corbett's issue of rider representation, who would that rider
    be, would that be a D.C. rider, Maryland, Virginia----
        Chairman Tom Davis. I think a Virginia rider----
        Mr. Kauffman. I would think--who happens to be a Federal
    employee who is very concerned about parking.
        But essentially, Mr. Chairman, wedded to a recognition of a
    significant and ongoing Federal contribution, I think that a
    place at the table would definitely be open for discussion.
        Chairman Tom Davis. I mean, I think we are going to have to
    strategize how we can get this--how we can sell such an
    authorization, and then how we reach--how the State and locals
    have to match, something we have been through before.
        Mr. Downey, let me ask you; should any additional Federal
    funding be tied to the WMATA signatories' ability to come up
    with a dedicated funding source?
        Mr. Downey. That has been tried before, but not successful;
    I think it is still worth pursuing.
        In the first of the special reauthorizations for WMATA, the
    Stark Harris bill of 1977--and I represented the then
    administration on putting that together--Congress called for
    the creation of stable and reliable funding to match what the
    Federal Government would do. It didn't come to fruition----
        Chairman Tom Davis. I remember.
        Mr. Downey. Virginia did pass one tax, it kind of fell
    apart in other places and was later forgotten; but it is not an
    idea that should be left----
        Chairman Tom Davis. Maybe we just need better leverage if
    we do. I mean, Mr. Kauffman and I still have the wounds from
    supporting the last transportation for sales tax when we were
    overwhelmingly rejected by our constituents. But I think that
    may have to be part of this as we move forward. These are just
    ideas under discussion, we have a long way to go. This hearing
    today really lays a groundwork for where we want to go.
        I think we will do another round of questions, but I want
    to give the other panel members an opportunity, Ms. Norton, and
    then Mr. Van Hollen.
        Ms. Norton. Thank you very much, Mr. Chairman. I appreciate
    the testimony we received today.
        The chairman just discussed the difficulties of getting tax
    increases for anything in his jurisdiction, that is the case
    throughout, of course, the region. One of the problems, I
    think, is the jargon of ``dedicated funding.'' It doesn't
    really mean anything to the average rider or the average
    person. If I could ask, perhaps, Mr. White or Mr. Kauffman--Mr.
    White may be more in touch with the operations or with the
    capital spending.
        If you had a--everybody knows that we pay for Metro anyway,
    so everybody knows that the money comes from Maryland, Virginia
    and D.C., so what difference would a ``dedicated funding''
    source mean? In real terms, that people who say don't raise my
    taxes can understand, for example, what would it do for a
    rider, what evidence would they see of improvement in the
    system or maintenance of the system that would make them think
    that whatever that dedicated source took from them, directly or
    indirectly, was worth it? Can you break down the benefits of
    dedicated funding over the kind of funding we already give
    every year which comes out of our pockets?
        Mr. Kauffman. If I could, Ms. Norton, start at the 30,000
    foot level policy, but also incorporating the rider's
    perspective, and then shift for details to Mr. White.
        The real impact of being able to rely on stable and
    reliable service could be most readily captured by the
    struggles the District of Columbia went through not that many
    years ago when there were serious funding challenges facing the
    District and they had to pull back and then sometimes stop the
    regular payments, and the painful real impact to riders is in
    order to maintain funding at the level that could be afforded,
    that a third of the District's bus service was cut,
    discretionary bus service was cut. So by having a----
        Ms. Norton. But what does that have to do with dedicated
    funding?
        Mr. Kauffman. What I am leading to is by having a dedicated
    and reliable stream of funds that we can rely on with a new
    Federal partnership, then the ups and downs of the support we
    have seen from municipalities would be flattened out, that
    impact would be flattened out because today we are really
    dependent on the lowest common denominator member contribution
    and erratic fare increases. By this group acting, it would
    seriously stabilize the impact for riders in the region.
        Ms. Norton. In other words, you are saying that you can't
    count on any specific amount of money, and that it changes from
    year to year?
        Mr. Kauffman. It is subject to annual appropriation by
    member jurisdictions----
        Ms. Norton. Yes. But is there a formula that says that
    everybody has to come up with a certain amount of money every
    year?
        Mr. Kauffman. There is an extremely Byzantine formula that
    allocated both the operating and the capital dollars, and that
    is--unfortunately, as we focus on that from time to time, that
    has proven to be a zero sum game with jurisdictional vetoes at
    bar. I think at least three times in recent history, we have
    tried to readjust the Rail Funding formula, and we ended up
    seriously bloodying each other on the Metro board and did not
    come to closure.
        But I recognize, quite frankly, that there needs to be more
    parity with some of the funds the District puts on the table,
    and perhaps one of the best ways to address that is in concert
    with this new Federal partnership coming forward; and then
    wedding the two, we can make some, you know, very painful
    experiences for our District funding partners a thing of the
    past.
        Ms. Norton. Yes, Mr. White.
        Mr. White. Ms. Norton, I think you, yourself, almost said
    it best in your opening remarks when you said our funding
    arrangement is like living from paycheck to paycheck. I think
    all of us understand in our own personal life what that means
    when we are living from paycheck to paycheck; it means you
    can't really plan on anything, you can't plan on anything
    outside of that which you know you can absolutely afford and
    fit into your baseline budget.
        I think the second descriptor that is one that is
    understood in terms of the analogy of a businessman is what Mr.
    Downey said, you know, the arrangement is like having to
    recapitalize your business every year. If you can't count on a
    multiyear set of funding commitments that you know are going to
    come your way, how can you do capital planning? How can you
    make sure that your physical plan is in a state of good repair
    and buses are replaced when they are supposed to be replaced?
        Ms. Norton. Mr. White, they know the money is going to
    come. It is going to come. So it is the specific amount of the
    money? I mean, it is not going to convince anybody who rides
    the Metro that 1 day somebody may not, in fact, come--Virginia
    may not come forward with this amount, even the District of
    Columbia. You have to help us out. People have to understand
    the relationship between ``dedicated funding,'' which has
    absolutely no meaning to the average person, and something they
    would see at Metro that they don't see today.
        I am still not sure of what it is that they could see,
    because you certainly can't say--you can talk about being more
    stable and all the rest of it, but they know good and well the
    jurisdictions are going to come up with a certain amount of
    money. I do not know if you are telling me that the amount
    fluctuates, that the formula is such that you don't even know
    the ballpark amount that each jurisdiction will give you. I am
    just not sure----
        Chairman Tom Davis. Will the gentlelady yield for just a
    second? Let me also ask, without dedicating funding, what
    happens to capital bonds? That did make that part of the
    question.
        Mr. White. I think that is probably one of the most
    important parts of the finding from the Metro Funding Panel,
    which is to say that you really can't go out and engage in any
    thoughtful capital planning program and one that the market
    would underwrite without a guarantee and the knowledge that
    there is going to be an income stream that is going to come in
    and pay those bills. And obviously, the risk associated with it
    is the less certain the assignment of the money, the higher the
    risk, and therefore, of course, the more of the debt that one
    has to pay to do that.
        But I think in further answer to Ms. Norton's question, it
    really gets down to--what we are dealing with is deferred
    investment and deferred capitalization; but how the rider sees
    it is the reliability of the system and the age of the asset
    that they have. But our funding arrangement, quite frankly, is
    getting down on our hands and knees every year and going to
    about seven or eight funding partners and literally begging
    them for a certain dollar amount. And if any one of those eight
    or nine funding partners say, you know, I have to put my money
    into schools this year, or public safety, or health and human
    systems, and I can't meet your number, in Mr. Kauffman's terms,
    it is a game of lowest-common-denominator policymaking.
        In our history over the last decade or so we have had
    different jurisdictions who have had different pressures on
    their budgets at different points in time, and it is not just
    one jurisdiction; so the cycle is at one point the District has
    a problem, at another point Virginia has a problem, and a third
    point Maryland has a problem. Nobody makes up for the funding
    partners' problems that they may have for those 2 or 3 years,
    everybody rolls down to the lower level, which means that we do
    less.
        Ms. Norton. I will come back.
        Chairman Tom Davis. Thank you very much.
        Mr. Van Hollen.
        Mr. Van Hollen. Well, thank you, Mr. Chairman.
        I mean, I want to pursue some of these ideas that have been
    raised already with respect to how you would structure a
    dedicated revenue stream, and also to address the issues Ms.
    Norton has been raising with respect to the reliability of the
    current income stream.
        First, as I gather, the main idea on the table is some kind
    of regional sales tax, surcharge that would go into a pool. Has
    any more thought been given how that would be structured so
    that the relative contributions that would--the current burdens
    that are, you know, today provided to the relative
    jurisdictions for their contribution to the use of Metro would
    somehow be reflected in the contributions from the different
    jurisdictions through a sales tax? I just do not know to what
    extent this idea has been flushed out.
        Mr. Kauffman. If, perhaps, I could start, and then refer to
    Mr. Downey.
        Certainly the Blue Ribbon Panel, as was mentioned earlier,
    mentioned as a key option a regional sales tax; it also offered
    a litany of other revenue instruments. One of the things that,
    on the one hand, is seen as very valuable is to have the same
    instrument applied across the region, the other is recognizing
    that each locality, each member has a different or best case
    way of raising some of those dollars.
        I would say that yesterday I specifically asked, along with
    members of the Federal--the Board of Trade, the Greater
    Washington Board of Trade and the Federal City Council, that we
    should take that Blue Ribbon Panel and call the regions and the
    Federal-elected leadership together for a summit this summer to
    basically begin acting on those items.
        A menu is prepared, and now we are calling folks to the
    banquet.
        Mr. Downey. If I could just add to that.
        In the Blue Ribbon Panel report, there are analyses of
    where the needs are and where the funds might come from under
    different assumptions.
        The Panel's overriding view was, though, that Metro
    service, bus and rail, is a regional asset. And it is very hard
    to say that someone who lives in Virginia, works in the
    District and occasionally shops in Maryland is paying in only
    one place for that. So the premise of our thinking was
    regionalize it as much as possible. It isn't perfect. The
    numbers show that the burden would shift a little bit; that
    could be ameliorated in a variety of ways, but we thought
    dedication for the resources that have been described,
    particularly for the ability to plan and finance capital, and
    regionalization really reflected the nature of the service and
    the nature of the agency.
        Mr. Van Hollen. Just to followup on Ms. Norton's questions
    with respect to the reliability to which--with the
    contributions to the different jurisdictions have been made
    over a period of time. I mean, do you have any--a chart that
    would show these fluctuations just as part of an argument for
    why we would have to have a dedicated income stream? I mean,
    you were very creative, I guess, in this latest effort to
    modernize, where you went to the jurisdictions and you got them
    to agree to sign--binding contracts to make their
    contributions, and the extent to which they are going to be
    paying depends on the extent to which the Federal Government
    makes its contribution.
        I guess one issue that obviously arises with respect to the
    need for dedicated income stream--because, I mean, look, it is
    going to be complicated getting all these different regions and
    jurisdictions together to agree on something--is the extent to
    which the current system is broken and not working, or whether,
    after at the end of the day, people are really coming through
    with their funding requirements.
        Mr. White. Yes. I will try to shed some more light on this.
        I think the biggest effect of what we have had today is all
    of our assets have been identified--normal replacement cycles
    have been identified for this $10 billion investment that is
    now worth $24 billion, and there is a road map of what you need
    to do to keep your assets in a state of good repair----
        Mr. Van Hollen. Right.
        Mr. White [continuing]. So that we don't slip into the
    scenario that Mr. Downey explained occurred back in New York in
    the early 1980's.
        And what has happened thus far is everybody says, that is
    impossible for us to fund, so we are deferring capital
    investments. And we have deferred more than $300 million of
    things that should have been done to date, and that number
    would go over a half a billion in the next couple of years were
    it not for this funding agreement. And quite frankly, it
    required some sort of forcing function to make this funding
    agreement happen. Everybody looked at one another, said we
    can't do it, our share is too big, the Federal Government
    should be doing more, and we kind of kept on drawing ourselves
    into the ground until we have literally said, we have this rail
    car contract, it has these options in it, these options expire
    on this date, the pricing is enormously attractive if we don't
    exercise these options, and by the way, we can guarantee you
    that if we don't meet this option date it will be too late and
    our rail cars will become so crowded that we can guarantee the
    service will fail.
        And it was only that forcing, literally, that gun to
    people's heads that at the last second did people say, all
    right, well, I have to do this, and I will do this with great
    trepidation. And it bought us about 3 or 4 years of time, and
    we will be back in the same situation 3 or 4 years from now,
    looking for the same forcing function to make something happen.
        And I think that is the dilemma that we are facing. The
    operating side sort of resolves itself, sometimes you raise
    fares, sometimes you tweak the service, depending upon what
    people can and cannot afford on the operating side, but the
    biggest impact is on the capital side measured in system
    deferrals, which catch up to you and have a huge impact on
    service reliability.
        Mr. Van Hollen. I think you make a very good case for it.
    And as we think about this, I think it is also important to
    find a mechanism maybe for the Federal Government to continue
    to be a player going forward. I mean, the question is, after
    you have this income stream where the Federal Government says
    well, you have taken care of the problem and we no longer have
    any obligation ourselves, despite the fact the Federal
    Government should, in my view, for the reasons you stated, it
    is a unique system where the Federal Government has a unique
    interest in it compared to other Metro systems. Thank you.
        Chairman Tom Davis. Thank you. We will do one more round, I
    think, of questions.
        I have a question--Dana, I will start with you, but anybody
    can answer it and step in.
        The Brookings report, ``Washington Metro, Deficits By
    Design,'' points to the increasing Metro ridership from
    outlying jurisdictions. Should we not, therefore, look at
    expanding the area covered by the Metro Compact? These same
    areas want to be included in the definition of national capital
    area for DHS funding. If they are going to compete for these
    funds, doesn't it make sense, maybe to expand the Metro region
    and share the burden?
        Mr. Kauffman. I would not close the door, Mr. Chairman,
    but, for instance, we have had a similar discussion with the
    Virginia Railway Express board, and time and again, we have
    seen--particularly with our Fredericksburg line--that far and
    away, the majority of folks coming there are outside of
    Fredericksburg, coming in from even further outlying
    communities, and many folks are willing to have the opportunity
    to get on board that system, but few are willing to pay. And I
    guess the real issue is expanded membership could be a fine
    thing, but membership would have its price.
        Chairman Tom Davis. I think many will come, but few will
    pay. And the outlying jurisdictions are the most reluctant to
    pay. It was just on the bond referendum where the
    transportation money would have gone in the outlying
    jurisdictions, and they were the ones that voted most
    overwhelming. That is, of course, what drives a lot of people
    to move further out is the tax burden.
        Mr. Kauffman. And one of the things, also, if I could just
    add to that, Mr. Chairman, was certainly the gas tax revenue
    issues; that was one of the captured items that prompted a lot
    of the interest on the part of some of the outlying counties
    with VRE. I do not know how, again, any tax instrument would be
    viewed since any form of tax instrument is often viewed as
    anathema the further out you go.
        Chairman Tom Davis. That's right. On the other hand, they
    are asking Fairfax to pump a lot of money into the system and
    provide parking places for commuters from other counties that
    are coming in here; and you get taxed to the max, I mean, it is
    just--OK.
        Any other comments on that? Dick, I do not know if you have
    any comments. I guess you would probably like as many payers as
    you can get, wouldn't you? It is an easy shot for Dana on this
    because he is from Fairfax; I have Prince William in my
    district, too, so I was very careful how I word it.
        But I think we have to understand here that it is
    affecting--a lot of people are using this from outside of the
    jurisdictions that are paying for it.
        Mr. White. And it is getting bigger and bigger as the
    commutes go longer and longer. I mean, the Washington Post
    story recently has clearly vividly illustrated that people in
    this region seem to have a tolerance twice as much as the rest
    of the citizens of our country to live further away from their
    jobs and to spend more time commuting to those jobs, which
    means, in our case, we are getting more and more of our
    ridership coming from outside of our Compact jurisdictions,
    which means that all of our Compact jurisdictions are
    subsidizing, to some extent, the citizens that live in other
    counties outside of the Compact; and there is no current way of
    capturing that other than through the fare revenue itself, but
    there is no subsidy way to capture that phenomenon which is
    growing.
        Chairman Tom Davis. And, in fact, your fare revenue capture
    is one of the highest in the country, isn't it, in terms of
    recovery rest?
        Mr. White. We are the second highest to New York City, yes.
        Chairman Tom Davis. Mr. Millar, any comment on that?
        Mr. Millar. If I may make a couple of comments on this.
        First, the experience around the country is the larger the
    taxing area gets, you get some unintended consequences, they
    are logical, but unintended. The argument today I understand
    certainly, people come from there, they get on here, they go
    there, they ought to be taxed there. Well, everybody else who
    lives there and doesn't make that trip then says well, if I am
    paying that tax, I ought to get some additional amount of
    service. And we have many examples where the regional transit
    systems have outrun their tax base, when originally it was all
    done for the best of intentions of including everybody in it.
    So we certainly need to be very careful about how that goes.
        The other thing one might think about is the States and the
    role of the States in this. If truly the commuters' shed grows
    at least as far as it is from my understanding--which is very,
    very far now from the core counties and the District--many
    places have looked at what the States might do in that regard
    and have the States act as a surrogate, in essence, for these
    other outlying--so you get combinations where the State puts in
    an amount of money, the core counties put in an amount of
    money, and you do it in that fashion.
        Chairman Tom Davis. Right. Well, that is a problem our
    State legislators are going to have to face up to.
        Let me ask you this, Mr. Millar, too: You talked about the
    Americans With Disabilities Act requirements for paratransit.
    What is that costing the system? Is there a more effective way
    to do it? And are there any ongoing Federal efforts to
    coordinate transportation services offered by Human Service
    programs?
        Mr. Millar. The cost of complimentary paratransit is
    usually the fastest growing part of a major transit system's
    budget over the last 10 or 15 years. I had some statistics in
    my testimony. In general, now we are spending over 8 percent of
    the operating cost nationwide on that service; very important
    service for the people who use it and the communities in which
    they live, to be sure, but a nightmare for the public transit
    budget. When you take it and you begin to look down at what is
    going on with individual transit systems, you see costs that
    have been rising in excess of 100 percent. Well, there is
    simply no tax base of--no local tax base, no way that kind of
    cost can overrun a budget. Now, yes, we are in the early years
    of that, so we are probably on a steeper slope than we will be,
    say, if we were having this discussion 5 years from now, but
    still, it is a major and growing part of the budgets.
        Chairman Tom Davis. My last question: Does ADA require
    curb-to-curb service?
        Mr. Millar. Yes, sir, it does.
        Chairman Tom Davis. So that is basically an unfunded
    mandate.
        Mr. Millar. Yes, sir, it is; absolutely.
        Chairman Tom Davis. So we have to look at ourselves on
    that. That is also this jurisdiction, though, as we look at
    that, and that is also an issue.
        OK. Thank you. I think you have clarified it.
        Ms. Norton.
        Ms. Norton. Thank you, Mr. Chairman.
        I want to quickly get through a set of questions. The
    reason I pressed the--I got only one question last time because
    I am interested in solving a problem.
        Don't expect elected officials to solve the problem of
    dedicated funding, they are born cowards, they are not going to
    get up and say raise anybody's taxes. So we have to get at
    ways--and I have looked at some of what you have recently done;
    for example, it was either in your testimony or I may have read
    it before I came here, that 58 percent--that is almost 60
    percent of the people in this region--say we need a ``new way
    to raise funds for Metro.'' I take that as we are part of the
    way there.
        You haven't done a fare increase in a long time. I am going
    to say to you, Mr. Corbett, the only problem I have with an
    actual voting--I am not sure what that does, one person--but
    the only problem I have with that--and this may sound strange
    coming from me--is if anything, this system needs a regional
    constituency for hard issues. And it is easy enough to
    represent the riders--I love to throw eggs, you know, at the
    system; and it seems to me that person, for example, if the
    notion of a fare increase came up, hey, this guy or woman would
    try all they could to say don't do that, you haven't done it
    for 8 years, or whatever.
        Please don't take me to say I believe in fare increases,
    the poorest people in the region live here and would be hurt
    most. But I know this much, if you do what PEPCO is now doing,
    an 18 percent rise, because we have not had a rise in PEPCO for
    so many years, you don't help the poor people in my region.
        So I have an open mind on that. I like what they have done,
    have you come and speak at the board meetings. I am not sure
    what more harangue on the board would do with a--I am in the
    Congress of the United States, and I see what people who
    operate from the narrows of constituency, I see what they get
    us. Tom Davis and I try, in the way we approach issues, to step
    back and say--sometimes one of us has to give up and the other
    one not; so I just put that on the record.
        Let me cite to you a poll that came forward, reported in
    the Washington Post, that most people prefer tolls to taxes.
    You know what? The Washington Post gave them a choice; this had
    to do with roads, and it said tolls or taxes. If you had said
    do you want tolls, 98 percent of course not; if you had said to
    taxes--so we are not framing the issue well.
        Has, for example, Metro ever done a survey to find out
    whether or not people would prefer tax increases--fare
    increases, rather, to fund more cars or further delays? I mean,
    you have to put the real alternatives before people. Or have
    you ever asked in any survey whether you would prefer a
    dedicated sales tax or further delays? I mean, have you done
    any surveys? You are going to have your public coming in one
    way or the other, what surveys have you done to indicate that
    people have preferences one way or the other, the way we now
    know they have preferences for tolls over taxes when it comes
    to roads?
        Mr. White. Ms. Norton, I don't think the Metro organization
    itself has done those kind of surveys, I mean, we certainly do
    a lot of surveys in terms of customer satisfaction,
    measurements and things of that measure, but we have not--
    certainly historically--taken the step to kind of present those
    kinds of choices because Metro does not have its own funding
    source, we are a product of the State and local governments
    that fund us----
        Ms. Norton. I understand; I understand, Mr. White; I
    realized that the answer was probably no.
        You hear me giving you a suggestion. This does not have to
    do with funding, this has to do with grooming the public fairly
    to understand what their alternatives are, and I have to tell
    you, I don't think the public has any idea. We are going to try
    to do our job, so are you. I am going to have to try to quickly
    get through this set of questions, unless somebody else has
    something to add there.
        Mr. White. Mr. Millar, I think, has a good national
    perspective on it.
        Mr. Millar. Yes. To your point about people understanding
    what their choices are, I think there are lessons to be learned
    from other parts of the country.
        On November 2nd, when we were re-electing the President,
    when many folks were arriving in the Congress on a no-tax
    general view of life, voters around the country approved 24 of
    31 ballot initiatives that were presented to raise their own
    tax to fund public transportation systems. So we have learned
    some lessons about designing good programs, about bringing the
    public into that design, about helping, educationally, for the
    public to understand what the benefits are, and now delivering
    to the public those benefits. One of the key parts of the
    dedicated funding is the ability to actually follow through on
    the promises that are made. So I would be happy to work with
    them on that.
        Ms. Norton. All I can say, Mr. Kauffman and Mr. White, is
    you need to have somebody do a serious analysis of how they
    were able to do what nobody in this region--it may have
    something to do with the fact that we are a multi-state region,
    I don't know if that contributes to it, I won't dwell on that--
    but we need to understand how come that happened across the
    country, particularly in this atmosphere, no-tax atmosphere.
        And again, I go back to the notion that nobody understands
    what you use the money for. Now they know how to complain, Mr.
    Corbett can tell you, about elevators that don't run,
    escalators that break down, too much crowding; we love that.
    And you deserve it if you don't come back at people with some
    way for them to understand why that occurs.
        Could I ask, what is the percentage of Federal funding that
    is now in--goes to Metro, approximately? How much Federal
    funding already goes to Metro as a result of simply the TEA
    21--I guess it would be--type funding.
        Mr. White. I will try and answer that question, Ms. Norton,
    in a few different ways by referring to the charts there.
        In our current budget, capital and offering in the Federal
    contribution is 13 percent, and that is largely because the
    Federal Government does not participate in weighing in the
    average jurisdiction----
        Ms. Norton. Is that more or less what the contribution
    would be in the average jurisdiction?
        Mr. White. No.
        Mr. Millar. No.
        Ms. Norton. Mr. Millar.
        Mr. Millar. In my experience, the customers here pay a much
    higher percentage than is normal, I would say, in that regard.
        Ms. Norton. I am asking about Federal funding.
        Mr. Millar. In Federal funding, in the large systems there
    is very little Federal funding for operations, there is a great
    deal of funding for capital expenditure; and again, it varies
    all over the lot, depending on where they are in their cycle.
        Ms. Norton. Mr. White, what percentage of the passengers
    for Metro originate in D.C.?
        Mr. White. The chief financial officer has given me a note,
    and it says 45 percent of our bus and rail riders are D.C.
    residents; and that is largely because we have a very extensive
    bus network; and of course, the District doesn't even have a
    school bus system, so we provide some of those services for the
    District residents; but 45 percent in combination.
        Ms. Norton. We are very proud of the New York Avenue
    subway. I was able to get some funding here in the Federal
    Government, and D.C. stepped right up to the plate, and the
    private sector recognized the benefit. Does this model have any
    future elsewhere in this region?
        Mr. White. I hope so, Ms. Norton, because I agree with you,
    I mean, it was very, very innovative and very, very successful.
    In this instance, there was a partnership that came together
    that recognized there is a special benefit to be made by
    putting that infill station in there to help that land realize
    its potential and the community to realize its potential. The
    landowners were willing to tax themselves through an
    assessment, about one-third of the cost of that station,
    recognizing they are going to benefit from having a Metrorail
    station put down there. The District of Columbia contributed
    another third share, and a special appropriation of the
    Congress contributed another third share, at least those were
    the original shares initially.
        So this motion here, I think it is a notion of value
    capture, and I think it is something that needs to be talked
    about more in the future, is that there are certain people in
    our metropolitan area who benefit from a large scale capital
    investment, and perhaps there needs to be some more value
    capture around that. And another notion of that, and one that
    has been talked about a little bit, is maybe those employers
    who have--who are in office buildings that are within proximity
    of Metrorail stations, maybe there should be some additional
    incremental assessment recognizing the extraordinary benefit
    that they receive for being located that close to a Metro
    station.
        So the notion of value capture and private benefit I think
    is something that needs to be explored more in the future, and
    is something that came out of the New York Avenue station.
        Ms. Norton. Finally--I do not have any other questions--I
    note that in Mr. Kauffman's testimony, he said there were no
    obvious substantive or geographical expansions that are
    necessary at this time. I mean, when you hear about all the
    congestion on the road, what you are saying is you can't even
    begin to think about bringing some of those folks in by Metro;
    you certainly can't mean that they are not necessary, with
    people hanging on the roads forever.
        And finally let me just say, in terms of how--I have
    mentioned the Metro, the New York Avenue subway, and I am not
    sure--obviously that works for expansion, but I want us to
    think about it even as to whether or not it has some
    application for the system as it is now operated. And I do not
    know what the win-win there, but I wish we would think about
    that model, using our powers of analogy, see if there is some
    way to do something similar. The Federal Government, I mean, we
    were clear to the Federal Government, you need this stop
    because you need this land nearby. If we are not expanding, we
    need to think of how Tom and I could present this to the
    Federal Government so that they would understand, as they did
    with the New York Avenue Metro subway, that they were getting
    something out of it.
        And let me tell you what I think the real model in how to
    operate really is. The District of Columbia, in building this
    subway stop, contributed $2.1 billion, more than any other part
    of the jurisdiction. How did they do it? It transferred
    interstate highway funds in order to do it, and that meant that
    it was making a larger contribution than Maryland or Virginia
    toward the construction of the Metro rail system. We knew what
    we had to gain, it was absolutely clear to us, we knew that
    highways should not be the wave of the future, particularly in
    the District of Columbia.
        They have become the wave of the future since 1967, so we
    have to somehow figure out what to do with the arrangement of
    funds and how to keep this competition for funds between
    highways and Metro from continuing so that people really do do
    what they want to do, which is to take Metro if they can only
    find a way, one, to get Metro out there, and two, to get on a
    Metro car, even if they were within the Metro area.
        Thank you very much, Mr. Chairman.
        Chairman Tom Davis. Mr. Van Hollen.
        Mr. Van Hollen. Well, thank you, Mr. Chairman, again; thank
    all of you for your testimony today.
        As I understand what you are saying, compared to other
    Metro systems in the country, in the WMATA system, riders
    generally are paying more. The Federal Government is paying
    more for the reasons we have stated historically. So the one
    component in the equation that is paying less relative to other
    Metro systems is the local jurisdictions; is that right, in
    terms of their input?
        Mr. White. I don't know if I would go quite that far, Mr.
    Van Hollen.
        In terms of--I think the distinction here is the extent to
    which State and local governments empower their transit
    system--in our case, Metro--to get the first dibs on money
    without having to put it in competition with other needs
    assessments that State and local governments do through their
    annual appropriations process. That is where we come up short.
    And we are shorter than anybody else in the country, and that
    is a major limitation. But the extent to which we do get
    contributions from State and local government, they are pretty
    sizable, and actually over the last set of years, are higher
    than what their historical proportion has been to the funding
    shares of the system.
        Mr. Van Hollen. Right. I understand. I am just trying to
    compare it relative to other systems in the country, not
    historically within this system. If the riders here are paying
    relatively more and the Federal Government is paying more, it
    just seems to me that the other systems--somehow the local
    jurisdictions are paying less compared to other regions--as a
    percentage, not that they are not paying a lot.
        Let me get on to the issue of funding and look at
    alternatives to dedicated funding source; and I think the
    proposal you floated is a very good starting point. But as you
    know, it is also complicated by the fact that we are talking
    about multi jurisdictions and a number of other issues.
        Is there any way to essentially get the different
    jurisdictions to make a legally binding commitment to the WMATA
    system for a particular share of capital costs going into the
    future that you could hold them to legally, despite their
    annual appropriations process, and let the jurisdictions then
    figure out on their own how they go about funding it? Maybe
    they will fund it out of their existing allocation, maybe they
    will fund it out of, you know, additional dedicated revenue
    source they find, maybe they will add it out of general
    revenue; but is there a way to do that so that you can hold
    them legally to that commitment? And then you get everybody
    together and say, OK, we are on board.
        Mr. White. We did find that way recently in the form of the
    Metro Matters funding agreement, where we have a legally
    binding 6-year commitment where everybody has a share, without
    there being a specific identification of how each jurisdiction
    is going to come up with its share, but they put their
    signature to a legally binding agreement that is subject to the
    annual appropriation process. So yes, Mr. Van Hollen, that is
    an option.
        I think the Blue Ribbon Panel--and Mr. Downey might want to
    comment on this--they recognize it as certainly not the most
    preferred option. The most preferred option, and the one that
    they believe has the greatest opportunity for success, is some
    sort of regionally implemented funding mechanism that gets
    applied and raises money regionally, but they are also quick to
    identify there are other options to that, including the one
    that you said, sir, which would be some sort of subregional
    allocation, and then left up to each of those jurisdictions to
    figure out how to honor that.
        Mr. Downey. I would only add to that that the panel also
    felt whatever was committed to regionally ought to be matched
    federally.
        Mr. Van Hollen. All right. Thank you.
        Mr. Chairman, I don't have any more questions. Thank you.
        Chairman Tom Davis. Well, thank you very much. Let me just
    thank this panel. I think we have laid an important groundwork
    today as we move forward with what I hope will be an
    authorization bill we can present. We hope to be able to call
    on you for your guidance and further information as we move
    forward. This has been an important hearing----
        Ms. Norton. Mr. Chairman, could I----
        Chairman Tom Davis. Yes, Ms. Norton.
        Ms. Norton. There was one question I didn't ask. You and I
    are on the Homeland Security Committee. I wondered how much
    additional money has had to be put in the system for homeland
    security.
        And Mr. Chairman, I think that one option for us
    particularly, since homeland security money is used largely for
    capital funding, may be to make--to draw to a higher level of
    the Federal Government not only the money that is being spent
    because of post-September 11 problems, but the money that
    simply must be spent on security, capital funding security
    matters for Metro for the foreseeable future. But anyway, what
    is the number, if you have one?
        Mr. White. You make a good point, Ms. Norton; and I will
    give the local perspective, I know Mr. Millar might be able to
    add in, weigh in a bit on the national side as well.
        We did have some good success initially, immediately in the
    aftermath of September 11 where we were able to receive a--
    special appropriations of the Congress through several separate
    committees of $39 million, and then the administration released
    $10 million of finding that was under its control for a $49
    million investment that helped us to shore up some of the areas
    of vulnerability that we had in the system. However, the income
    stream that has come out of the Department of--that was before
    there was a Department of Homeland Security, and when the
    Congress created the Department of Homeland Security, since
    then the funding sources that have come out have been extremely
    small in terms of the amount of money that finds its way into
    transit. Metro has only received about $7 million of homeland
    security funding over the first two appropriations cycles.
        So clearly, transit has been taking a seat nationally--
    taken a back seat nationally as a matter of priority as to how
    the Federal Government makes its investment into transportation
    security; and there is clearly a lot more that needs to be
    done. We have a whole lot of identified needs. The need for our
    capacity, I think as implied in your question, Ms. Norton, is
    related to homeland security.
        Chairman Tom Davis. I mean, the problem with homeland
    security, too, is that the high-target areas really don't get
    the appropriate amount of money; this money is spread out and
    it becomes a congressional grab bag. So, you know, Bullfrog
    Corner will say we need money for our first responders here
    where it's--probably terrorists have never heard of it, and
    some of the other areas suffer. But that is what happens with
    congressional funding formulas, as you know.
        Mr. White. And the money that the Congress has
    appropriated, largely it has been left to the discretion of the
    Department of Homeland Security to kind of allocate it out, at
    least the transportation component or the transit component of
    it. And thus far it has gone out on a formula, and it has had
    the--the consequence of what you say, Mr. Chairman, is it kind
    of goes out to everybody and it is not really risk-based. And
    clearly everybody needs a baseline of support; all of our
    transit systems across the country have to have some minimum
    baseline of support and capability, but there are systems that
    have higher risk, and so far that hasn't been reflected in
    funding decisions.
        Chairman Tom Davis. Let me just end with this question I
    will ask you, Mr. White, but if anybody wants to answer it.
        I mean, ultimately to be successful in getting additional
    money, the taxpayers have to say, what assurances can we get
    that the money is going to be well-spent? That is ultimately
    the burden that we have whenever we go out to our voters and
    taxpayers and ask them for additional money.
        In this case, in going to Congress for additional money,
    they are going to say what additional steps have we taken. We
    have talked about the representation issue, in fact we may have
    some presidentially appointed, Federal members aboard, it could
    be riders or whatever; but ultimately, that is the question you
    are going to have to be able to assure Members of Congress and
    voters, who will both be participating in this.
        Mr. White. I understand, Mr. Chairman; it is the right
    question for people to ask. There is an issue of accountability
    that we must be able to demonstrate that Mr. Kauffman, in his
    opening remarks, I think really stressed that issue. Both he
    and I covered in our testimony the litany of things that we are
    doing to respond to, quite frankly, a very tough year for us
    last year, I think we are--at the table here, those in our
    organization, we are the first ones to admit we did not have a
    good year last year, and there were things that happened that
    draw questions to the service we are providing to our
    customers. I think it has stabilized and become better lately;
    we certainly hope that is a byproduct of the corrective action
    plans we are putting in.
        Certainly when it comes to money and the extent to which
    anybody is considering making extraordinary allocations of
    money, there needs to be a contract associated with that, there
    has to be a contract of accountability so that it should be
    absolutely clear what the money is going to buy. And that was
    one of, I think, the power of the Blue Ribbon Panel's report is
    it was very specific, I mean, it was very specific about what
    an investment would get, and it identified over what period of
    time that investment would be delivered.
        So I think we, in the Metro organization, would be the
    first ones to salute the extent to which anybody is willing to
    put additional funding on the table to make it very--as a part
    of a contract, this is what we are going to deliver to the
    citizens, this is what people can expect to get so there is no
    over-expectation or under-expectation of what that investment
    is going to bring.
        Chairman Tom Davis. Well, thank you all very much. Mr.
    Corbett, thanks for your perspective on this. Mr. Downey, you
    bring a wealth of knowledge with you, as you do, too, Mr.
    Millar. Mr. White, it is good to see you back. And Dana, good
    accounting for yourself in your first appearance, and we hope
    to see you again.
        Mr. Corbett wants to get the last word here.
        Mr. Corbett. And it will be a brief one.
        We very much, as a panel, appreciate this hearing. In
    watching Mr. Kauffman and all his predecessors, they are
    absolutely lucid on the need for a funding source for Metro.
    This panel of witnesses cannot provide the solution to you, and
    that is why we think we need a bigger room with different
    players, and we encourage your participation in that process.
        Chairman Tom Davis. Thank you very much. We will give you
    the last word. The hearing is adjourned.
        [Whereupon, at 12:01 p.m., the committee was adjourned.]
        [Additional information submitted for the hearing record
    follows:]

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