Chicago Transit Authority riders will not face fare increases during 2010 and 2011, according to Gov. Pat Quinn and transit officials who unveiled a new agreement this afternoon.
The agreement, among Illinois state officials, the Regional Transportation Authority, the CTA, Metra and Pace, came after agency leaders wrangled over whether to increase fares in addition to cutting services at the CTA.
Officials say it also prevents fare increases for Pace's paratransit riders, many of whom face severe disabilities or are seniors with limited mobility and income.
"Public transportation is indispensable," Quinn said during a press conference. "It has to be affordable. It has to be reliable. It has to be safe."
Yet officials did not have firm answers for how the agreement solves a tough financial situation for Chicago's transit agencies, or how it would prevent one in the future.
A statement from the governor's office outlines some measures that officials say bridge the gap between what the agencies need to operate and what they do not have.
According to the statement, the RTA, which funds the CTA, Metra and Pace, will issue bonds to provide the CTA with $83 million in each of the next two years.
The bonds allow officials to shift federal dollars from capital projects to the CTA's operational budget — without affecting capital-improvement projects.
To pay for those bonds, the RTA will rely on the Illinois Department of Transportation to cover interest and fees on the bonds for the coming two years. After that, "assistance will be evaluated on an annual basis," according to the statement.
RTA Chairman Jim Reilly praised the agreement, but he admitted that it does not solve long-term problems with transit funding.
"Eventually, there have to be fare increases," Reilly said.
Reilly's comment underscores a tough reality of the transit system's financial situation.
Year after year, officials at Chicago-area transit agencies have called on state officials to rescue them from "doomsday" scenarios involving drastic service cuts along with fare increases.
RTA Executive Director Steve Schlickman recalled how such a move in the early 1980s hurt ridership to such an extent that it took many years for the transit system to recover.
"I would argue that we're still feeling the effects," Schlickman told me.
The hold on fare hikes, which effectively eliminates a funding option for the transit agencies, comes despite trouble fixing a $9 billion state budget deficit earlier this year.
A report released this morning from the Pew Center on the States found that Illinois is among the nation's 10 most troubled states in terms of "fiscal peril."
Quinn responded to a question about that report by saying that he made that point about nine months ago, when he became governor. He also emphasized that many states are in a similarly dire financial situation after the U.S. economy took a "nose dive."
Yet Quinn supported a measure, promoted by former Gov. Rod Blagojevich, that allows all seniors, regardless of income or disability, to use public transit for free.
According to some estimates, the money for that measure could have eliminated the need for the state to hand over about $15 million to transit agencies over the two-year agreement.
Laurence Msall, president of The Civic Federation in Chicago, called the free-rides-for-seniors program "poorly conceived and fiscally reckless." The Civic Federation is a nonpartisan, nonprofit organization that, among other things, analyzes and reports on the budgets of major public agencies in Chicago.
Msall tells me that the agreement announced today is too risky because it dictates fare increases without regard for underlying economic uncertainty.
"We think it's a bad deal for the Chicago Transit Authority, the riders of the CTA, and anyone else who's concerned about the fiscal state of Illinois or the transit system," Msall says.
"Borrowing money in order to avoid politically unpopular but fiscally necessary fare increases will create long-term problems for Chicago-area transit agencies."
This evening, the local Amalgamated Transit Union weighed in on the matter, rejecting the agreement "categorically."
"It’s just another patch work (sic) proposal that does not provide a sound and long-term solution for funding mass transit in Chicago," ATU Local 241 President Darrell Jefferson said in a statement. "We don’t want to see fares go up, layoffs and service cuts. But, it’s time for a real and permanent funding plan now."
Quinn also announced two appointments to the CTA board during the press conference. John Bouman, president of the Sargent Shriver National Center on Poverty Law, and Katie McClain, Chicago city director for the Clinton Climate Initiative of the William J. Clinton Foundation, have joined the board.
The CTA board consists of seven members, with four appointed by Chicago's mayor and three appointed by the governor of Illinois. Quinn previously appointed Jacquelyne D. Grimshaw.