WMATA Provides Updates on FY25 Budget Deficit

WMATA Provides Updates on FY25 Budget Deficit

At our Board meeting in May, WMATA’s General Manager and CEO, Randy Clarke, presented an overview of Metro’s operating and financial situation. At that time, reliability and services were improving and ridership was increasing though not yet to pre-pandemic levels. The General Manager also indicated the agency was forecasting a significant funding gap of $750 million for FY25 due to a variety of factors.  

Last week, management presented an updated financial picture along with potential remedies to help reduce the FY25 budget deficit. 

We are encouraged by management’s commitment to realizing internal cost savings and efficiencies. The nearly $100 million in one-time savings plus roughly $600 million in other reductions over the next 10 years is a good start and we expect that WMATA’s management and Board will continue working to identify additional improvements. 

However, a proposal to utilize capital funds to reduce the operating deficit is not desirable though might unfortunately be necessary. The structural problems that have impaired WMATA since its inception must be addressed to find a sustainable long-term solution. 

The Board of Trade will continue to work alongside the region’s elected and appointed officials, the Metropolitan Washington Council of Governments, the MetroNow Coalition, and other business and regional organizations to ensure WMATA is able to meet the region’s transit needs while operating effectively, efficiently, and safely. 

Metro services are critical to our region’s economy and quality of life; even more so as the region continues to change and grow. We must consider this an opportunity to think longer-term to create an integrated mobility system for all residents, businesses, and communities. 

Board of Trade joins WTOP for Small Business Septmember

What’s the current landscape for small businesses in our region?

Our President & CEO, Jack McDougle, joined WTOP and the Prince George’s Chamber of Commerce as part of supporting Small Business September. Throughout the month on WTOP, see, hear, and interact with information and advice from regional business leaders.

Watch Jack’s full discussion with WTOP below:

https://www.youtube.com/watch?v=EsJ95RDOOIs&t=4s

Board of Trade’s policy and legislative focuses heading into fall

Washington DC 

The D.C. Council passed emergency public safety legislation just prior to its departure for summer recess. This comes months after Congress, which has taken more interest in the district’s local affairs than in previous years, voted down the revised criminal code legislation. With violent crime up 37% on the year, considerable pressure was being applied on the D.C. Council to act prior to breaking for summer recess, likely a factor in what turned out to be a 12-1 vote. Also contributing to the bill’s passage was that it was emergency legislation, meaning it is only in effect for 90 days. As the D.C. Council returns from recess in September, a more permanent version of this legislation will need to be considered.  

While the Prioritizing Public Safety Amendment Act of 2023 had several components aimed at reducing violent crime and holding perpetrators accountable, such as creating a new offense for firing a gun in public, the portion of the legislation that stirred the most debate amongst council members and advocates was the pretrial detention of both juveniles and adults accused of certain violent crimes and offenses. It is important to note however that the scope of those eligible for pretrial detention was narrowed from previous proposals in order to get the support necessary to pass the legislation. This will undoubtedly continue to be a contentious area of discussion as a permanent version is debated. 

It remains to be seen what will ultimately be included in the permanent version of this legislation as well as whether it will be an omnibus-like bill or multiple individual bills. While the bill did incorporate components of Mayor Bowser’s original proposal, some measures were not eligible to be included. It is likely that additional portions of Mayor Bowser’s proposal will ultimately be included. Councilmember Brooke Pinto, who sponsored the bill, incorporated some measures of a bill she had previously introduced, the Accountability and Victim Protection Amendment Act of 2023. Additionally, measures to assist with the recruitment and retention of law enforcement personnel have also come up in discussions surrounding public safety efforts and should be considered as the legislation takes shape. 

Upcoming Policy Event with Regional Labor Leaders

Click here to register for this event

Virginia 

The standoff over the Commonwealth’s budget continues, months after Virginia General Assembly members departed Richmond following the conclusion of the legislative session. While an updated spending agreement is not technically required (due to the two-year budget passed last year along with a “skinny” budget earlier this year) billions of unallocated dollars remain, leaving priorities and initiatives of both parties unfunded. Conferees from the Republican controlled House and the Democratic controlled Senate have gone back forth over the past several months but remain at an impasse, all while Governor Youngkin continues to apply pressure to get it done and include permanent tax cuts for individuals and businesses when doing so. 

The latest proposal came from the Senate last week, which was in response to the House proposal made three weeks prior. It includes both one-time rebates along with the more controversial ongoing cuts that have been proposed. Whether or not it is enough to satisfy the House is yet to be seen, as a response from House Appropriations Chair Barry Knight is expected soon.  

Multiple factors are likely contributing to the delay in getting it done. Concerns regarding the economic uncertainty the future holds, specifically as it relates to permanent cuts, have been raised throughout the debate. However, these concerns have been somewhat mitigated by the updated revenue projections that have been released over the course of the last few months, showing the Commonwealth is currently in a strong financial position. The upcoming elections in November are also impacting the negotiations, as elected officials dedicate increased time to campaign efforts. As noted in a previous blog post, Virginia is experiencing historic turnover within its general assembly, not just in raw numbers but perhaps more importantly in experience. In the event an agreement is not reached, control of the House and Senate which will be determined in November will be all the more significant. 

Maryland 

Earlier this month, appointments to the Maryland Commission on Transportation Revenue and Infrastructure Needs were announced, along with the date of their first meeting on August 24th. The Commission is a result of SB 24, passed this past legislative session, whose 31 members consist of legislators, local elected officials, cabinet secretaries, industry, labor, and environmental organizations. The Commission will review, evaluate, and make recommendations concerning:  

  • the current State funding sources and structure of the Maryland Transportation Trust Fund, including major trends in revenue including the general funds; 
  • the methods other states are employing to fund state transportation operating and capital programs including toll revenue, vehicle-miles-traveled fees, fees on zero-emission vehicles, and non-transportation-related revenue options; 
  • short-and long-term construction and maintenance funding needs for transit, highway, pedestrian, bicycle, heavy rail, shipping, air travel, and other transportation needs; 
  • options for public-private partnerships, including partnerships with local governments, to meet transportation funding needs including funding options; 
  • changes in transportation technology and trends that will impact transportation infrastructure needs and costs to the State; 
  • existing practices for prioritizing project funding and options to better prioritize needs, including local and legislative priorities; 
  • the structure of regional transportation authorities and ability of these authorities to meet transportation needs in various regions of the State; 
  • options for sustainable, long-term revenue sources for transportation; and 
  • options for improving the Maryland Department of Transportation’s ability and capacity to deliver major capital projects. 

With Governor Moore advancing the Red Line in Baltimore, which was projected to cost roughly $2.9 billion nearly a decade ago, funding for projects in our region such as the American Legion Bridge 495/270 and addressing WMATA’s impending fiscal cliff, will be difficult to identify. 

How artificial intelligence is impacting jobs in communications and public relations

The Greater Washington Board of Trade hosted our Communications and Public Relations discussion featuring guest speaker Greg Kihlstrom, a published author, customer experience expert, and marketing technology transformation consultant, who spoke to our members about the impacts of artificial intelligence to the communications profession.

As we gathered to explore the various categories of AI and its impact on industries, it became evident that AI’s potential is boundless, offering innovative solutions and revolutionizing the way we approach automation.

One of the key highlights of the event was the introduction to Generative AI. Systems like ChatGPT and Dall-E Midjourney can generate content like text and images based on prompts. Witnessing the AI’s creativity in real-time left us in awe, and we couldn’t help but envision the endless possibilities for businesses and creative endeavors alike.

We also dived deep into Predictive Analytics, which intrigued everyone with its data-driven insights. The ability of AI to make accurate predictions about future outcomes using historical data and statistical modeling is nothing short of remarkable. From customer segmentation to churn prediction, the potential applications of Predictive Analytics left us inspired.

Going beyond traditional marketing automation, we explored the human touch of AI through Personalized Customer Journeys. This AI category focuses on delivering tailored experiences to individual customers based on their behaviors and preferences.

Workflow Automation, also known as Robotic Process Automation (RPA), was another engaging topic during the event. Learning how AI could automate routine tasks like report generation and customer service left us contemplating how much time and effort this could save for businesses, allowing employees to focus on more strategic and meaningful work.

As we discussed the potential of AI, it was crucial to address the concerns and risks associated with this technology. The threat of biases in decision-making and the need for transparency in machine learning models raised important ethical considerations. However, it was reassuring to see that these concerns could be managed and mitigated with responsible and thoughtful implementation.

Moreover, we couldn’t ignore the impact of AI on the job market. Contrary to common fears of massive job displacement, our discussion highlighted a more collaborative future. AI is expected to augment human capabilities, not replace them entirely. While repetitive tasks may be automated, humans will play a crucial role in curating AI-generated ideas and defining desired outcomes for AI optimization.

Overall, participants left this AI-focused discussion optimistic about the future of technology and its potential to transform industries for the better. We are excited to continue exploring AI’s possibilities and its responsible integration into our lives, maximizing its benefits, and creating a brighter, more efficient world.

The Communications & PR cohort is led by board members, Michael Akin, President of LINK Strategic Partners and Beth Johnson, Founder and CEO of RP3 Agency. Each roundtable session brings together communication professionals to discuss industry trends and share best practices. Share your thoughts on this series by filling out this survey.

 

Challenge to the Perimeter Rule could impact region and cause more delays at Reagan National Airport

According to AAA, nearly 51 million people across the United States are expected to travel this Fourth of July, four million of which will do so by flying. Holiday travel can be a nightmare at airports, Reagan National (DCA) here in Greater Washington being no exception. While that certainly does not make DCA unique, what does is the longstanding Perimeter and Slot Rules, ensuring that holiday travel chaos is not an everyday experience for those coming in and out of Reagan National. 

The Perimeter Rule limits nonstop flights at DCA to a maximum of 1,250 miles, unless there is an exemption granted by the Federal Government, of which there are currently 40. While the slot rule dictates the frequency of flights taking off and landing, helping to control congestion. With DCA being constrained by space, limiting the runway and terminal capacity, these rules were and still are necessary to provide travelers with the safest and most efficient services possible.  

While Reagan may be constrained in terms of space, the other two major airports in the region are not. Baltimore Washington International (BWI) and Dulles International (IAD) are both growing and ready to bring on additional flights servicing stops across the county and world. What we have in this region is three airports working together, which they have done for years, to create an ecosystem capable of servicing the residents and visitors of DC and its neighbors.  

Unfortunately, there is an effort making its way through Congress that would change these rules resulting in a far less enjoyable experience at DCA, while upending the functioning ecosystem of our region’s three major airports.  

According to an internal Federal Aviation Administration analysis, which was done in part as a response to a study produced by those in favor of change or elimination of the rules, “additional flights at DCA would likely have a negative impact on operational performance and the passenger experience.” Further, the addition of only 20 daily round trip operations would increase delays by nearly 26% and the addition of 25 daily round trip operations would increase delays by more than a third.  

The additional flights would also contribute to the already strained infrastructure within and around Reagan. From the full parking decks to the gridlocked roadways, and overcrowded terminals, there is only so much capacity that can be handled before significant negative customer experiences become the norm. It is irrelevant how many flights and destinations are added if the service provided is unreliable and chaotic. 

Considerable investments have been made complementing the existing ecosystem of our region’s airports. Just last year, the $3 billion Silver Line extension was completed, providing travelers using IAD direct access to the nation’s capital and surrounding jurisdictions via public transit.  

Upending this functioning and productive relationship between our region’s airports while simultaneously creating a worse customer experience for those using Reagan is what Greater Washington would get in return for changes to the Perimeter and Slot rules. Let’s keep the status quo.  

Virginia Primary Day: What the region’s business community needs to know

Virginians will head to the polls Tuesday, June 20, to cast their votes in the primary, ahead of November’s general election in which every seat of the Commonwealth’s legislature will be on the ballot. This year’s election is unique for several reasons, the most notable being that it is the first since the new legislative districts were drawn. 

Redistricting has had significant impacts: 

Virginia adopted a constitutional amendment in 2020 that established a bipartisan redistricting commission, composed of state legislators and political appointees, who were tasked with drafting and approving new state and federal district maps. However, the commission was unable to reach a consensus on either the state or federal maps, resulting in the Supreme Court of Virginia having to step into the matter. The Supreme Court appointed two “special masters,” one from each of the two political parties, to draw the maps in an “apolitical and nonpartisan manner.” In December 2021, the Supreme Court approved the final drawings of the three maps (State House, State Senate, and U.S. Congress), setting the stage for the next decade of political battles in the Commonwealth.  

The new maps were composed without considering incumbent residency, resulting in multiple sitting Delegates (44) and Senators (19) being pitted against their fellow colleagues and other seats with no incumbents. This left many legislators in a tough position by potentially having to face a contested primary or a general election against a fellow sitting member of the General Assembly. Ultimately, these new dynamics resulted in many state lawmakers choosing not to seek reelection, while some moved into a district with a more favorable political environment.  
 
Veteran lawmakers out as a result of redistricting:
 
Nearly a third of the 140 districts in the Commonwealth will not have an incumbent represented in the primary election next week. To put this into perspective, you would have to look back to the 2011 election to find a cycle where even half that many districts were open-seat primaries. Remember this represents the minimum number of new General Assembly members, as some incumbents could lose in their respective primary or general election.  

While the turnover in Virginia’s legislature will be historic in terms of raw numbers, another influential factor at play is who those incumbents not seeking reelection are and the leadership positions they hold. Delegate Kathy Byron, Republican Chair of the House Commerce and Energy Committee, Delegate Rob Bell, Republican Chair of the House Courts of Justice Committee, and Delegate Margaret Ransone, Republican Chair of the House Privileges and Elections Committee are all retiring.  

The Senate will face even greater leadership changes, with the retirements of Democratic Majority Leader and chair of the Senate Commerce and Labor Committee Senator Dick Saslaw along with Republican Minority Leader Senator Tommy Norment. Senator Louise Lucas, president pro tempore and Democratic Chair of the Senate Education and Health Committee and the Senate Rules Committee, is facing a hotly contested primary against Senator Lionell Spruill, Democratic Chair of the Senate Privileges and Elections Committee. Additionally, Senator Janet Howell, Democratic Chair of the Senate Finance and Appropriations Committee, Senator John Edwards, Democratic Chair of the Senate Judiciary Committee, and Senator Lynwood Lewis, Democratic Chair of the Senate Local Government Committee are also retiring.  
 
Northern Virginia shaping diverse representation and influence in House & Senate: 

Northern Virginia will look a lot different in terms of representation in the General Assembly come the start of next session – Jan. 10, 2024. With the Commonwealth’s population shifting, Northern Virginia added two new Senate and two new House districts through the redistricting process. This gives it 12 out of 40 Senate districts and 30 out of 100 House districts.  

However, with the turnover and retirement of incumbent legislators, namely that of Senator Saslaw, it is unclear if Northern Virginia will wield the same level of influence in Richmond than it has in the past. Priorities of these newly elected officials, not just those in Northern Virginia, are also worth keeping an eye on. This year’s pool of candidates from both parties is more diverse by gender, race, and experience. It makes sense to assume that their policy initiatives and priorities could shift from their predecessors, even if they are from the same party.  

 We will have to wait until November to see who controls the House, currently held by the Republicans, and the Senate, currently held by the Democrats. With such tight margins and so much uncertainty created from the redistricting process, it is anyone’s guess as to what will happen. What is certain though, is that there will be a considerable number of new legislators in Richmond and new names in many leadership positions come next session.  

Jack McDougle joins Virginia Workforce Development Transformation Stakeholder Advisory Group

Greater Washington Board of Trade President & CEO Jack McDougle has been appointed to Virginia’s Workforce Development Transformation Stakeholder Advisory Group.

Virginia’s Secretary of Labor, Bryan Slater, selected McDougle, who will join a talented group of regional experts that will push to ensure Virginia’s workforce talent can find economic success in the Commonwealth and the Greater Washington region.

This advisory group is part of establishing the Virginia Department of Workforce Development and Advancement, which was established through Governor Glenn Youngkin’s signing of House Bill 2195 and Senate Bill 1470 that by law allows for the creation of this department.

Secretary Slatter will convene this Stakeholder Advisory Group for the purpose of advising him during the program transition period from July 1, 2023, through September 30, 2024.

The Board of Trade’s expansive representation of the business community will ensure that the perspectives and needs of employers and employees are well-represented in shaping these workforce development programs.

CLICK HERE TO LEARN MORE REGISTER FOR THIS EVENT

May 2023 Policy Update: What our team is working on in Greater Washington region

WHAT WE’VE BEEN DOING

The Board of Trade has spent the last month actively engaging in policy and advocacy efforts across the region. We met with Maryland’s Transportation Secretary Paul Wiedefeld to discuss significant infrastructure projects impacting the region. This included projects such as construction of the Purple Line and the American Legion Bridge/I-270 traffic relief plan.

We also hosted a dinner with several of the region’s Chambers focusing on the impact newly passed legislation will have on economic development and what key issues the business community continues to face. The Board of Trade was excited to partner with MGM National Harbor to host a lunch with Prince George’s County Executive, and newly announced candidate for US Senate, Angela Alsobrooks. The County Executive shared her thoughts on the FBI HQ relocation efforts, transit-oriented developments, the Commander’s new ownership and its impact on the stadium location, the county’s budget, education spending, and crime.

Our work this May also included a webinar we hosted with police chiefs from Fairfax County, Prince George’s County, and Washington DC. The event covered various issues on public safety impacting the Greater Washington community, including violent and non-violent crime, the rise in carjackings, regional law enforcement collaboration, workforce issues and efforts to resolve them, along with the impacts of technology on policing.

REGIONAL BREAKDOWN

With both Maryland and Virginia having concluded their legislative sessions, much of the focus in the region for our Policy & Advocacy team has been in DC, where its council is currently at the tail end of its budget process. It has been a difficult budget season for DC, as federal dollars from the pandemic dry up and revenues continue to shrink.

Ensuring that Downtown DC comes back stronger than ever is crucial to the future success of the city, which is why the Board of Trade focused on advocacy efforts pertaining to the 2024 DC Budget. Joining several like-minded organizations, we advocated for the removal of the proposed $2 congestion fee for rideshares serving downtown, the delayed implementation of the Building Energy Improvement Standards (BEPS), and the delayed implementation of the Parking Benefit Equivalent. Last week, DC Council took its first of two votes on the budget, which we were pleased to see included a reduced congestion fee ($.25) and delayed implementation of both BEPS and the Parking Benefit Equivalent. Unfortunately, the council decided to pull the majority of capital funding dedicated to the K Street Transitway and repurpose it for other initiatives. Considering the likelihood of continued budget issues next year, finding $100+ million in funding for K Street may prove difficult.

In Maryland, Governor Wes Moore has been busy with bill signings. While there was speculation that he could become the first Maryland Governor in more than 100 years not to veto a single piece of legislation, he issued his first veto along with allowing 10 pieces of legislation to become law without his signature, in his final acts pertaining to this year’s session. Of his three vetoes, two were related to legislation that already passed in another form and the third was a bill impacting the process of awarding commuter bus contracts that was passed over objection from the Maryland Transportation Administration.

Virginia received welcoming news in the form of April’s revenue projections. Year-to-date general fund revenues remain ahead of the updated December 2022 forecast by roughly $500 million – as April revenues declined less than expected projections. This is particularly significant as potential for a special session remains to determine what to do with the Commonwealth’s multibillion-dollar surplus. Several legislators wanted to see updated projections prior to deciding where the surplus should go. With the better-than-expected revenue projections, Governor Youngkin and House Republicans will continue to push for tax relief.

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