Public transportation riders in Chicago got a reprieve from Springfield this week, as legislators gave the Regional Transportation Authority the ability to borrow more money to bridge a $260 million gap in payments from the state.
A bill passed Monday by the Illinois legislature allows the RTA to borrow as much as $400 million in “working cash” to cover its debts — a feat that will mostly be used to stave off the threat of cuts to CTA, Metra and Pace while the state struggles to pay up.
While the RTA has been calling for leeway to borrow more cash since it revealed the state’s non-payment came out earlier this year, it’s not a cure-all by any means, officials said. Instead, it’s a tool they’ll use to put off paying back the money they already borrowed.
“We wanted that ability to re-borrow that money to get the state a couple more years to get their house in order,” said RTA Chief Financial Officer Joe Costello.
In the meantime, this will help ease the pressure on the RTA, giving it much-needed flexibility in paying its debts while waiting for the state to pay what it owes.
“It’ll take away some of our urgency that we’re expressing to the state about their giving us money,” said RTA Executive Director Stephen Schlickman. “The precedent the state has set here is that they are responsive to our urgent cry for cash — there’s no way they’re going to be able to come up with as much cash as we need.”
While the newly replenished ability to borrow working cash will help stave off doomsday, as long as the state is in debt to the RTA, the specter of service cuts still looms — only now as a moving target.
The state has been giving the RTA about enough cash to keep its debt static at around $260 million — pushing back the day that push comes to shove, financially.
“It’s not a stable situation, it is a very fluid and risky situation,” Schlickman said. “The working cash notes authority that they’re giving us is probably going to make it less likely that they’ll give us money.”
The RTA could be getting another reprieve soon, though. The state senate has somewhat surprisingly taken up a new measure to limit seniors’ free rides on public transportation, co-sponsored by former free-rides supporter Sen. Ricky Hendon (D-Chicago).
The new measure, which passed committee Tuesday, would limit free rides only to seniors whose income is less than 150 percent of the poverty level.
The RTA previously said setting the limit at the poverty line would save $37 million per year, but Schlickman and Costello said they had been surprised by the new legislation and weren’t sure what the new savings might be.