D.C.: Need to find ways to pay for 42% of streetcar costs

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Local,DC,Transportation,Kytja Weir
The first two lines of the D.C. streetcar system will cost an estimated $64.5 million to operate in the first five years, beyond the cost to build the lines, according to city officials.

But the city now says it only has 58 percent of the costs covered among fares, federal grants and local funds.

City transportation officials laid out several options this week to fill the 42 percent gap: adding special tax districts along the streetcar corridors, raising property assessments to reflect increased value of the property nearby, tapping into performance parking revenues or increasing sales taxes citywide.

Options to cover streetcar operating costs
The city's proposed options would bring in varying amounts to fund the trolleys in the first year:
• Increasing property assessments along 600 feet on each side of the One City Line: $1.5 million in new property taxes
• Tapping performance parking fees: $2.5 million
• Adding a quarter of 1 cent to retail sales taxes: $16 million
• Adding a special assessment of 10 cents per $100 assessed value for any property within 600 feet of the One City Line: $17 million
Source: District Department of Transportation

Fares alone won't pay the way, a common issue for nearly all transportation systems. The District Department of Transportation estimates that fares would cover 19 percent of the costs to run the first two lines over five years. By comparison, Metro fares cover 82 percent of the costs for Metrorail and 27 percent of Metrobus expenses.

Currently, Mayor Vincent Gray has allocated enough money in his budget proposal to pay for the first three months of the H Street/Benning Road line when it is slated to start running in July 2013, said DDOT spokesman John Lisle.

But beyond that is not clear. That's about $27 million to cover over five years, a question the D.C. Council likely will have to resolve soon.

The city dreams of building a 37-mile streetcar network of eight lines. Initially, it would start with the H Street/Benning Road Line, later extending it to run seven miles to Georgetown as the newly dubbed One City Line. A 1.1-mile stretch would run in Anacostia.

Earlier this year, a D.C. report said the full streetcar network would push up property values by 5 percent to 12 percent, adding an estimated $5 billion to $7 billion to existing property values. Separately, it would spur new development over 10 years by as much as $8 billion.

Tax revenue spun off that growth would bring in money eventually. But the streetcars are needed first to build that growth, and money is needed to run the streetcars.

kweir@washingtonexaminer.com

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Kytja Weir

Staff Writer - Transportation
The Washington Examiner