Fare increase questions

Monday's Sun-Times editorializes in favor of Rep. Julie Hamos' efforts to invest more in our region's public transportation network. The editorial raises a question that many people have asked, including the CTA board: "Why doesn't CTA just raise fares even higher?"

The CTA board looked closely at this issue and commissioned surveys and econometric modeling for our fare structure. Many will recall that balancing the budget only with fare increases would have required fare increases of 40% or more. In my view, a more modest fare increase was preferable for the following reasons:

• Competition: Like any private company, CTA needs to price its service with an eye on the market. Over 90% of Metra customers in the CTA service area already pay less for Metra than for CTA, a fare increase would make it cheaper to take Metra from places like Riverside or Kenilworth than to take CTA from Jefferson Park, Pilsen, or Chatham. A regional transporation system needs to balance service and fares throughout the region. Many people don't realize that CTA fares have risen 95% since 1983, the last time Illinois changed mass transit funding. In comparison, Metra fares have increased just 20%. It is simply not sustainable for one agency to be so out of balance with its regional partners.
• Equity: Seventy percent of CTA customers are "choice" customers -- that is, they can afford other transportation options but choose to take CTA. But a major fare increase would have forced the remaining 30% -- those with no other transportation options -- to bear a disproportionate burden of the CTA's structural deficit.
• Efficiency: Both fare increases and service cuts shrink ridership. But with a structural deficit, it is important to look at our fixed costs. Increasing fares would have increased CTA's fixed cost per rider by over 10%. In contrast, service reductions save $1 in fixed costs for every $4 of service cuts.
  

Let me close by offering a historical comparison. If CTA had raised fares only 20% since 1983, fares would be just $1.10 and annual ridership would be over 70 million trips higher.