Terry McAuliffe’s budget may signal Metro funding compromise

In his final budget, Virginia Gov. Terry McAuliffe is proposing $150 million in tax dollars from Northern Virginia to help Metro — a plan that could ease talks among regional leaders over funding the embattled transit system.

Mr. McAuliffe, a Democrat, released his $114.9 billion, two-year budget proposal Monday morning. In it, he proposes a $65 million tax on gas, hotel stays and real estate in Northern Virginia and $85 million from Northern Virginia’s transportation budget to fund Metro.

The proposal is part of Mr. McAuliffe’s effort to evenly split among the D.C. area the $500 million of annual dedicated funding that Metro General Manager Paul Wiedefeld has said will be needed to keep the transit agency running safely and smoothly.

D.C. Mayor Muriel Bowser and the D.C. Council have opposed dedicated funding in favor of a regionwide sales tax. By modeling his own regional tax in Northern Virginia, Mr. McAuliffe may be offering a compromise.

“I think it opens the door,” council member Jack Evans, who also chairs the Metro Board, said of the Virginia governor’s proposal.

Mr. Evans told The Washington Times that he “applauded the governor for coming up with a proposal that gets the ball rolling in the Virginia legislature, and includes dedicated funding, and is a long-term proposal.”

Mr. Evans, a Democrat who represents Ward 2 on the council, has backed the city’s plan to fund Metro via a sales tax in the District, Maryland and Northern Virginia.

He said Mr. McAuliffe’s proposal raises hopes that a regional sales tax could be approved, adding that the governor’s proposed tax on real estate, gas and hotels in Northern Virginia may be “too volatile” to secure the high credit rating needed to borrow against it. A sales tax would secure an investment-worthy credit rating, said Mr. Evans, who also chairs the council’s Finance Committee.

A major question is how Virginia’s Republican-controlled General Assembly will receive Mr. McAuliffe’s plan when it convenes next month. The GOP saw its commanding majority in the House of Delegates diminished to just one seat — 51-49 — over the Democrats in last month’s elections.

Mr. McAuliffe’s budget includes $400 million to expand Medicaid to cover 300,000 uninsured residents, a repeat measure that Republicans have killed in the past; $45 million to provide mental health services; $51 million for a 2 percent pay raise for teachers in 2019; and $49 million for a 2 percent pay increase for state workers in 2019, among other expenditures.

“We’re going to take the governor’s budget as we always do and we’re going to write our budget,” Senate Majority Leader Tommy Norment, James City Republican, said Monday.

Under Virginia law, Mr. McAuliffe is limited to one, four-year term. He will be succeeded in January by his Democratic lieutenant governor, Ralph Northam, who was unavailable for comment about the budget.

With regard to Metro funding, Mr. Evans mused that a sales tax only in the District would make the city less competitive in attracting businesses and residents. And if funding is to be shared equally, D.C. would shoulder a disproportionately heavier burden because most subway riders live in Maryland and Virginia.

The prospect of a regional sales tax isn’t ideal, but “maybe this is the best we can do,” Mr. Evans said.

It may come down to Maryland Gov. Larry Hogan, who has rejected a regional sales tax, instead proposing a four-year funding plan of $125 million per jurisdiction.

“Everyone can give good reasons why they don’t want to pay,” Mr. Evans said. “That’s what wrong with Metro.”