Metro faces uncertainty as D.C. budget showdown drags on

Metro’s finances are once again on shaky ground as Congress stalls on legislation that could slash more than $1.1 billion from D.C.’s budget, including hundreds of millions the city set aside to keep the transit system running.

Last month, the U.S. House of Representatives passed a bill requiring the District to revert to its Fiscal Year 2024 budget, which could impact spending already approved by city leaders, including $217 million in emergency Metro funding. The Senate already passed a bill to preserve D.C.’s current budget, but with the House now in recess and no final deal in place, local officials are uncertain whether they’ll need to claw back funding. While Mayor Muriel Bowser’s sweeping executive order in response to possible cuts did not mention Metro (instead freezing most new hiring, pay raises, bonuses and nonessential spending), Council Chairman Phil Mendelson has raised alarms that Metro’s funding could be impacted. 

This isn’t the first time Metro has faced a financial scare, thanks in part to its complicated funding model. Metro’s day-to-day operations, such as buses, trains, maintenance, and payroll, do not have their own dedicated revenue source. Instead, the system relies heavily on annual subsidies from D.C., Maryland, and Virginia. 

According to Washington Metropolitan Area Transit Authority’s (WMATA) FY2026 adopted budget, the agency’s total operating expenses grew by roughly $148 million compared to the previous year, with subsidies from each jurisdiction projected to rise accordingly to maintain current service levels. Last year, D.C., Maryland, and Virginia stepped in with a one-time spending package to close a $750 million gap. But with federal pandemic aid set to expire, ridership still well below pre-pandemic levels, and a possible regional recession on the horizon, it’s unclear whether that level of support can continue.

How Metro is funded

D.C., Maryland, and Virginia are expected to cover about 77 percent of WMATA’s $2.6 billion operating budget for Fiscal Year 2026, which starts on July 1. The remainder comes from fares, parking fees, advertising, and other income streams.

Fare revenue, however, still hasn't recovered to pre-pandemic levels. Before 2020, it made up a significant portion of the system’s income, but reduced ridership — due largely to remote work and a smaller federal workforce — has kept fare collections low. Federal COVID-19 relief money provided temporary assistance but that aid will expire this fiscal year. Without it, Metro will have to secure new funding sources or consider significant service reductions, layoffs, and delays to planned upgrades.

Capital improvements, which include things like track replacements, new railcars, or station upgrades, are a different story. A 2018 agreement among the three jurisdictions secured a $500 million annual commitment to fund Metro’s long-term infrastructure – but by law that money can’t be used to cover operating costs.

To avoid major service cuts this year, D.C. sharply boosted its subsidy to Metro, raising its contribution to more than $723 million. That infusion — much of it one-time emergency aid — helped the agency keep trains and buses running, preserve jobs, and stay on track with planned improvements. But with the city now staring down potential cuts, there are growing questions about whether that level of support is sustainable – and whether the city can follow through on its full contribution at all.

A legal and logistical tangle

If D.C. is forced to revert to its FY24 budget, local officials will face tough decisions. As much of the FY25 budget has already been spent or contractually committed, any rollback wouldn’t be applied evenly. Instead, it would target what remains of the discretionary funds, amounting to an estimated 16 percent across-the-board reduction, according to the D.C. Council. 

Mendelson has pointed to Metro’s subsidy as one of the few flexible parts of the budget large enough to absorb a major cut, given the limited alternatives. He told Bloomberg last month that reducing the city’s contribution could have a “cascading effect” on regional funding.

Councilmember Charles Allen, who chairs the transportation committee, said that while the subsidy is technically discretionary, much of the funding has already been paid or contractually committed. Reversing it midyear, he said, would pose legal and logistical hurdles and risk disrupting Metro’s operations.

“We are almost three-quarters of the way through the fiscal year, so we've already been paying this,” Allen told the 51st. “To some degree, it's a giant question mark. Are we supposed to somehow go and claw back the funds from WMATA that have already been paid? Are we just not making the final quarter payment? Both of those scenarios are just ridiculous and would have a huge detrimental impact on WMATA.”

Mendelson’s office did not respond to repeated requests from The 51st to clarify his position, including whether Metro’s funding would actually be reduced if the city is forced to revert to its FY24 budget.

Either way, budget experts say the city has limited room to maneuver. Metro’s subsidy isn’t legally mandated, but adjusting it midyear would be technically difficult and politically fraught. Other large budget categories, such as debt service, pensions, and Medicaid, are even more constrained due to legal obligations or federal matching requirements, leaving few flexible options on the table.

“The capital [funding] cannot be pulled back because it's been used to raise money,” Yesim Sayin, executive director of the D.C. Policy Center, said. “So, the debt service has to be paid. This was a multi-jurisdictional deal ... So, pulling those back will be hard.”

What’s on the line

If Metro loses even a portion of D.C.’s planned contribution, the system could once again be staring down major service cuts.

Last year, WMATA projected a $750 million shortfall heading into FY25. In response, the agency outlined a worst-case scenario that included closing 10 rail stations, cutting 67 bus routes, ending service at 10 p.m. every night, raising fares by 20 percent, and laying off a significant portion of its workforce.

That support came — barely — in the form of a one-time bailout from D.C., Maryland, and Virginia. But advocates say it only bought time.

To close an operating gap, Stewart Schwartz, executive director of the Coalition for Smarter Growth, said Metro would likely have to make painful tradeoffs.

“They would have to cut short their maintenance work and shift the money over to paying for operations while still also cutting the frequency of bus and rail service,” Schwartz said. “That’s going to mean more overcrowded trains and probably more breakdowns.”

One long term fix being floated by DMVMoves — a regional task force launched by WMATA and the Metropolitan Washington Council of Governments — is to create a more reliable funding model for day-to-day operations. This approach would mirror how the region funds capital projects, relying on predictable contributions from D.C., Maryland, and Virginia. However, the model wouldn’t take effect until 2028 at the earliest and would require buy-in from all three jurisdictions.

In the meantime, Metro’s latest budget aims to stretch dollars further by expanding service to grow ridership, modernizing fare payment, and delaying some capital projects. Still, any lasting fix will depend on regional cooperation.

Allen, who also co-chairs the DMVMoves task force, acknowledged the long-term uncertainty but said he “fully expects” D.C. will be able to fund its share of the FY 2026 budget.

But if cuts do happen, union leaders warn the consequences for workers would be immediate and severe.

“We’re almost definitely talking about layoffs,” said Matt Girardi, political and communications director for ATU Local 689, which represents roughly 9,000 WMATA employees, including bus and rail operators, mechanics, and station managers. “We’ve heard estimates of over 1,000 people getting laid off.”

WMATA did not respond to repeated requests for comment.

A shifting federal landscape

Even if Metro weathers this round of uncertainty, storm clouds are gathering. Economists say D.C. is likely headed for a recession, driven in part by sweeping federal agency cuts and the mass dismissal of thousands of federal employees. As the government shrinks, the effects are rippling across the region, eroding the tax base that supports everything from schools to transit.

“The Trump recession is hurting the economy for all three of those jurisdictions,” said Councilmember Allen. “That means we have less revenue to meet the demands and the needs that we’re all working on. "At the same time, federal support for public transit is also facing new threats. Project 2025 — a policy blueprint from the Heritage Foundation, a conservative think tank with close ties to former President Trump — outlines plans to reduce the federal role in transportation. The proposal calls for eliminating discretionary transit grants, redirecting investment from mass transit to highways, and increasing the role of private companies in running public systems.

According to its fiscal 2026 budget, WMATA expects to receive $144 million in federal support through the Passenger Rail Investment and Improvement Act, or PRIIA, with matching funds from D.C., Maryland, and Virginia. Changes like those proposed in Project 2025 could shift more of the financial burden for transit onto local governments and reshape how agencies like Metro are funded and managed.

For Girardi, the stakes go beyond balancing the budget. He sees the fight over funding as part of a broader debate about the future of public transit.

“[Public transit] is something that everybody should have access to — not something we run like a for-profit company,” Girardi said.

“When we have these public services that are contracted out to for-profit multinational entities … overwhelmingly, workers get the short end of the stick and riders get the short end of the stick,” he added. “The more we go toward that model, the worse our service will be.”