Can CTA avoid annual budget meltdown?

5   <div class="column span-15 small quiet"><img src="http://s3.amazonaws.com/cdnassets/assets/7506/transit_col15.jpg" alt="" /> A train pulls into the Brown Line "L" stop on Chicago Avenue Credit: Alex Parker</div> For the better part of the last decade, CTA riders have been held hostage. Over and over again, they’ve been threatened with everything from cuts in bus service to elimination of “L” lines. After years of patchwork fixes, small fare increases and loans, in 2008 the Illinois General Assembly passed new sales and real estate transfer taxes that lawmakers thought would be a viable long-term solution for the perennially underfunded system. But they didn’t foresee the nationwide collapse of the housing market and the recession that followed, which once again left a gaping hole in the CTA’s operations budget, this time to the tune of $300 million. As the agency scrambles to balance the books for 2010, service cuts and fare hikes are on the table once again. It begs the question: What will it take for the CTA to have a sustainable operations budget? Answers are plentiful. Consensus is not. Some officials hope the recovering economy will buoy the CTA, growing enough to provide the funding that the system needs. Others say the situation demands new revenue. “With the legislation that passed two years ago, everyone assumed that we’d have the influx of operational funds that we needed,” CTA president Richard Rodriguez said recently. “The economy has tanked” The agency expected $100 million from real estate transfer taxes, and received just $25 million. Rodriguez says the solution may be to boost the CTA’s federal capital  improvement budget. That could bring down operational costs. “The newer our system, the less I have to spend on operating. I would be able to reduce my operating costs if … my bus fleet was newer, my trains weren’t 40 years old, because of the cost of maintaining them and keeping them in working order,” he says. Robert Kelly, president of the Amalgamated Transit Union Local 308, one of the CTA employees’ unions, also wants more federal money for the CTA. He would use the funds for day-to-day operations — though he’s hesitant about depleting the capital budget. “Federal money has to be changed and allocated for transportation companies to use for operating costs — it has to be done,” says Kelly. “There’s no other way around this, we cannot allow all these cars to drive into the city. Somewhere in Washington, they have to understand that the way of the future is transit, and that has to trickle down.” Currently, the CTA can opt to use as much as 10 percent of federal capital funding for operations instead. The idea of trading long-term investment in the system for day-to-day funding isn’t popular with many. “We have literally hundreds of train stations that don’t have running water, or broken pipes, and they have problems,” Kelly says. Joseph DiJohn, a professor at the University of Illinois at Chicago’s Urban Transportation Center, agreed, noting that diverting capital improvement dollars can have long-term consequences. “That’s essentially like using your mortgage to buy groceries,” he says. As for funding solutions in Illinois, Kelly favors a new gasoline tax to support the CTA. “The way that gasoline prices fluctuate every single day in this country, I don’t think that 2 cents a gallon is going to hurt anybody to fund transit,” Kelly says. But it seems unlikely Springfield will move soon to provide long-term funding for the CTA. An attempt to roll back the program that allows free rides for seniors — and will cost the CTA roughly $30 million this year — foundered in the legislature at the end of October, and likely won’t be back on the table until spring of 2010, according to Illinois Rep. Julie Hamos (D-Evanston). Hamos was the chief sponsor of the “long-term” funding plan passed in 2008. “The saddest part of this whole story was that we thought we had solved the transit crisis once and for all, and just a few months later, the whole economy tanked,” Hamos says. However, she thinks that the real estate tax revenue will grow enough to support the agency. “That is my belief and probably my hope,” Hamos says. “I don’t think we should be micromanaging the transit system from the state capital.” The agency’s current plan for 2010 is to temporarily bandage the budget by raising fares, cutting service and laying off workers. CTA board chairman Terry Peterson is confident that whatever the solution, the problem won’t last. “I’m optimistic that this economy’s going to turn around. We think that the levels of public funding that we get from the real estate transfer tax will go up, as well as the sales tax will go up,” Peterson says. He added: “If it doesn’t turn around, we’re all in a world of trouble.”

2009-11-09T05:32:00-06:00

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Ben Meyerson

CanCTAavoidannualbudgetmeltdown

1 A transit union's plan to use capital dollars to prop up the CTA budget is just one potential solution to the agency's yearly fiscal crisis. There are plenty of others, but consensus is hard to find.