Northern Virginia Transit Funding Guide

All state transportation revenues are deposited in the Commonwealth Transportation Fund (CTF). They are then distributed to programs and funds, mostly through the formula described in the next section.

There are many state revenues that are deposited into the CTF, but the majority of them come from:

• The state retail sales and use tax
• The state tax on motor vehicle fuel
• The motor vehicle sales tax

Like the federal government, the Commonwealth's funding sources can be split into formula-based funding and discretionary funding.

Commonwealth Transportation Fund

After some off-the-top set asides (including $20M to the  WMATA Capital Fund  and $20M to the  Northern Virginia Transportation Authority ), CTF revenues are split 51% to the Highway Maintenance and Operating Fund and 49% to the Transportation Trust Fund (TTF), per  Virginia code . The TTF further distributes revenues through a formula, with 23% going to the Commonwealth Mass Transit Fund (CMTF).

Source:  FY 2025 Commonwealth Transportation Fund Budget 

Commonwealth Mass Transit Fund

The CMTF provides funding from statewide sources to transit agencies across the state. The CMTF is a key source of Northern Virginia’s operating and capital funds for transit. After $50 million is set aside to cover Virginia’s  PRIIA  match which supports Metro's state of good repair program, revenues are distributed to cover transit agency operating costs, transit agency capital costs, VRE, the Commonwealth’s reimbursement to local jurisdictions for Metro, the Transit Ridership Incentive Program (TRIP) and special programs. Virginia’s Department of Rail and Public Transportation (DRPT) oversees the distribution of these funds and makes sure recipients meet the requirements to receive their portion.

Of particular importance to local agencies is the DRPT  MERIT  Operating Assistance Program, which receives 24.5% of the CMTF funds. It provides operating assistance to transit Virginia agencies by formula, and will fund up to 30% of their operating expenses based on performance metrics from previous years. Agencies in Northern Virginia typically perform well in these metrics. In FY 2025, Fairfax Connector received the most assistance with about $26.8M in operating assistance, while DASH received about $9.4M and ART received about $5.6M.

The state also provides local agencies with capital support through the  MERIT  Capital Program and support to build more accessible, safe, and regionally significant transit networks through the  Transit Ridership Incentive Program  (TRIP). As discretionary grant programs, agencies submit applications to DRPT to be considered for these funds.

SMART SCALE

 SMART SCALE  is another discretionary grant opportunity funded within the Construction Programs section of the TTF. It funds only capital expansion projects and uses a prioritization process based on the following criteria:

• Safety
• Congestion mitigation
• Accessibility
• Land use coordination
• Environmental quality
• Economic development

Transit capital projects are eligible for SMART SCALE funding and, in prior funding cycles, several transit projects in Northern Virginia received SMART SCALE funding. This program is highly competitive and transit projects compete with other types of transportation projects for funding. In the FY 2026  staff recommended funding distribution  (as of February 2025), two transit projects received a total of 3.5% of SMART SCALE funding, neither of which were in Northern Virginia.

Transit agencies in Northern Virginia have access to a variety of special funds. Taxes and fees levied in the region and approved by the state support these funds.

The  Northern Virginia Transportation Authority  (NVTA) is responsible for long-range planning for regional transportation projects in Northern Virginia, administering competitive multimodal funding program and recommending allocations for  federal highway funding programs . The NVTA Fund comprises a  0.7% regional sales tax and other, smaller sources . Seventy percent of the revenue is used by NVTA to fund capital expansion projects in its  TransAction  plan ("NVTA 70%"). NVTA 70% funding is a competitive grant program, projects funded through the program include second entrances for Metro stations, bus rapid transit projects and bus procurement. The remaining 30% of the revenue is distributed to member jurisdictions where the tax was generated ("NVTA 30%"). Local jurisdictions use this revenue for multiple purposes  as specified in code , including public transportation.

Commuter Rail Operating and Capital Fund (CROC)

The Virginia legislature created the Commuter Rail Operating and Capital (CROC) Fund in 2018.  Virginia code  dedicates $15 million annually from regional motor vehicle fuels tax revenues, known as the regional gas tax, collected in the NVTC and PRTC jurisdictions to the CROC Fund. This $15 million of dedicated funding is then disbursed from the CROC Fund to VRE for its use on operating and capital projects. This fund is not indexed to inflation.

Legislation was passed in the District of Columbia, Maryland and Virginia in 2018 to establish dedicated capital funding for Metro, known as the "WMATA Capital Fund" in Virginia. This dedicated capital funding provides $500M annually and has been used to bring the system towards a state of good repair, but its value over time has diminished since it's not indexed to inflation.

Virginia's WMATA Capital Fund is $154.5M per year. Approximately 80% of these funds are generated in the NVTC district through the region's gas tax, grantor's tax, transient occupancy tax and local payments.

See  How Virginia Funds Metro  section for more information about this fund.

NVTC manages the  Commuter Choice Program , which reinvests Express Lanes toll revenues into public transit and other transportation improvements along the I-66 and I-395/95 corridors in Northern Virginia. Commuter Choice supports local jurisdictions and transit agencies by offering both capital expansion and operating funds for a range of improvements, including transit service enhancements. A similar program, managed by DRPT, supports transit improvements in the Outside the Beltway portion of the I-66 corridor, from the Beltway to Haymarket.

While toll revenues are collected in the region, they are state funds that are subject to legal and constitutional  constraints . This limits them from being used as a general-purpose transit funding source. These funds therefore can only be used for specific transit or transportation projects that functionally relate to the corridor being tolled.

To supplement federal, state and regional assistance, local jurisdictions use their general funds or general obligation bonds to fund the rest of their capital and operating needs. However, these sources are also used for funding schools, police and other critical needs.

As localities in a  Dillon Rule state , Northern Virginia jurisdictions have limited mechanisms to raise revenue. Local jurisdictions rely heavily on the local property taxes to provide revenues to the general fund.  Virginia law  allows several cities and counties to have a commercial and industrial surcharge, which is almost exclusively used for transportation capital expansion projects.

Metro collects revenues from fares and other sources, but a transit agency cannot rely on fares to fully fund the system. To fill remaining gaps in the budget, Metro sends bills for capital and operating expenses to the  Metro Transit Compact  jurisdictions.

The majority of Metro's operating budget is made up of these state and local subsidies. Currently, the remainder of the federal pandemic relief funds make up about 4% of the operating budget. The rest of the operating budget comes from fare and non-fare revenues.

Metro's capital budget includes federal formula funds, federal discretionary funds and PRIIA funds. Members of the Metro Transit Compact also supply jurisdictional capital subsidies, local matches to PRIIA funding and dedicated capital funding. The remainder of the capital budget is supplied through the dedicated funding debt.

Read the  FY 2025 Approved Metro Budget .

Most of Metro's operating and capital budget is made up of state and local funding sources. How each state and/or local jurisdiction pays is up to them.

Keep scrolling to learn how each member of the Metro Transit Compact pays their bill.

The Metro compact area is made up of the District of Columbia, Maryland and Virginia. Each state pays for Metro from different revenue sources and uses Metro's service in their own way.

In Maryland, the state is responsible for the governance and funding of Metro. Unlike in Virginia, local jurisdictions in Maryland do not fund Metro.

The State of Maryland pays for the majority of its Metro bill from their state-wide  Transportation Trust Fund , which is supported by a variety of transportation taxes and fees.

The district pays for the majority of its Metro bill through its general fund. Parking meter revenue and taxes on revenues generated from private parking lots, garages and rideshare are also used. The DC share of the dedicated capital funding is paid for through its sales tax.

Virginia's Department of Rail and Public Transportation (DRPT) provides resources on behalf of the state that help fund Metro.

This is Virginia's share of the regional $500M in dedicated capital funding that was established in 2018. Virginia's WMATA Capital Fund is $154.5M per year, which is not indexed to inflation. The funding sources established by  Virginia code  are:

• $20M off-the-top of the CTF from the Northern Virginia Transportation District (NVTD) fund
• $27.12M from the NVTC local jurisdictions, using NVTA 30% or other local funds
• Regional Gas Tax ($22.183M)
• Regional Grantor's Tax ($0.10 per $100)
• Regional Transient Occupancy Tax (3%)
• Statewide Motor Vehicle Rental Tax (1%)

While DRPT manages and sends them to Metro, approximately 80% of these funds are generated in the NVTC district. Importantly, Metro is able to issue bonds on the majority of its dedicated capital funding revenues. In 2025, bonds issued by Metro received  AA ratings . The NVTD and motor vehicle rental tax revenues are restricted, which means Metro cannot use that money for bonding.

The state provides $50M per year off the top of the CMTF to fund Virginia's match of PRIIA funds. Maryland and the district also provide about $50M to Metro to match the approximately $150M in PRIIA federal funds.

Metro does not usually receive general funds from the Commonwealth of Virginia. In recognition of the expiration of federal pandemic aid and regional conversations to avoid catastrophic service cuts, the FY 2025-2026 Virginia biennium budget allocated $59.7M of the state's general fund for FY 2025 and up to $84.5M in FY 2026. This aid helps Northern Virginia cover their share of additional, short-term funding to close Metro's operating budget gap*. This is seen as a stop-gap solution to Metro's fiscal cliff while Virginia and the region find long-term funding solutions.

*At the time of this posting, the funding level for FY 2026 is still in discussions with the Virginia General Assembly.

The Commonwealth of Virginia provides state assistance to NVTC as partial reimbursement to the jurisdictions for a portion of their respective Metro bills. The state used 46.5% of the CMTF revenue, as required by code, to fund this aid.

This state aid flows to individual jurisdictional accounts managed by NVTC. These funds are allocated using the  Subsidy Allocation Model  (SAM).

NVTC manages certain state and regional revenues for our jurisdictions. While NVTC plays an important funding, governance and coordination role, the jurisdictions themselves manage their respective trust fund balances and direct NVTC to make payments to Metro on their behalf.

The NVTC-WMATA Allocation described above is allocated to NVTC jurisdictions using the regional needs-based approach of the  SAM  formula as referenced in  Virginia code. 

The state aid acts as a partial reimbursement to the jurisdictions for a portion of their respective Metro bills. Jurisdictions instruct NVTC to make payments on their behalf out of their respective account balances.

Virginia has a state motor vehicle fuels tax and a regional motor vehicle fuels sales tax ("regional gas tax"), which are administered by the Virginia Department of Motor Vehicles. As noted earlier, the statewide motor vehicle fuels tax is an important funding source for the CTF. The  regional gas tax in the NVTC district  is an important funding source for VRE and Metro. It's distributed in a specified order per  Virginia code .

The net regional gas tax in this graphic is the remainder of the NVTC regional gas tax revenue after it has been allocated to the VRE CROC fund (~$5M) and the WMATA Capital Fund ($22.183M). This money is held in trust to make payments to Metro on behalf of each jurisdiction's capital and operating subsidies. In FY 2024, NVTC received $31.4M from the regional gas tax.

After directing NVTC to make payments from their gas tax and state aid accounts, local jurisdictions use a variety of revenue sources to fund Metro: general fund, general obligation bonds (for capital use only), NVTA 30% and other funds.

Despite a complex structure, Virginia has a long and successful history of funding its share of Metro through joint partnership between the Commonwealth and Northern Virginia jurisdictions.