Progress in Springfield

Tuesday's hearing of the House Mass Transit Committee was a good airing of the issues. You can see the AP story here. Speaker Madigan and his chief counsel, Robert Uhe, asked questions for about 90 minutes, and then members of the Committee weighed in as well. The testimony highlighted the following points:

1. The 1983 RTA Act authors only planned for the funding solution to last 5-6 years.
2. Metra, Pace, and CTA all agreed that more funding is needed for regional transit.
3. One consequence of CTA's structural deficit is a significantly underfunded pension plan. In the 1980s and 1990s, in order to keep from reducing service, CTA and its unions agreed to reduce or defer pension contributions. CTA's pension was only 46% funded in January 2004 and is project to run out of funds by 2014. The fund's actuaries project that CTA needs an additional $200 million per year to avoid much more dramatic service or fare changes in the next 5 to 10 years.
4. CTA's fares have increased over 95% since 1983, faster than the rate of inflation. Metra fares have increased just 20%. If CTA had received sufficient funding to hold fares to a 20% increase, today's fare would be just $1.10, and ridership would be 70 million trips higher.
5. The RTA system was set up from the start to require most of the "discretionary" funding to go to CTA, making the term "discretionary" a complete misnomer (not to mention patronizing).
6. The City of Chicago contributes roughly $30 million each year to CTA's operating budget in cash and in-kind contributions (mostly police services), and has contributed over $800 million to CTA's capital budget since 1989.

CTA will continue to make the case in Springfield for increased investment in regional transportation.

Transit hearing Tuesday 4/26

The big CTA event this week will be the House Mass Transit Committee hearing Tuesday morning, with the leadership of Metra, Pace, CTA, and the RTA all appearing in Springfield. This will be the first meeting of the Committee after it issued its report (PDF) highlighting both the need for more investment in public transportation, and some of the bizzare imbalances in the way our region funds public transportation. Out of the top 25 metropolitan regions in North America, Chicago is the only one that funds transit through a differential tax rate. It's no wonder funding for the entire RTA has trailed inflation for the last 21 years.

The RTA and CTA boards passed resolutions last fall calling on the Illinois General Assembly to help our region increase funding for public transportation. Please lend your support to the 5 Core Principles for regional transit funding to help guide our state elected officials to a solution.

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.

Budget math

NOTE: Many CTA customers posted comments on the Tribune website. The Trib shut down the comments, but I wanted to respond to several, including #207: "The CTA has a $1 billion budget but a $55 million shortfall means service gets cut 50%! Where does the $890 million every year apparently not spent on service go?"

The $55M deficit must be saved in 6 months from a 6-month public operating subsidy of $220 million, and the cuts exclude security costs and paratransit for the disabled, which is required under federal law Moreover, by state law, roughly half of the cost of every transit trip must come from fares, the other half comes from a sales tax formula established in 1983. When we cut $2 in service, we save $2 in costs but lose $1 in revenue. Btw, total service hour reductions are approximately 36%.

Paper transfers

From the Trib# 159: "They should eliminate transfers, I always see people passing transfer cards to others when get off the bus."

The board action 4/13 does just that. Not only do paper transfers lend themselves to fraud, they contribute significantly to slower buses and high cash-processing costs. Under the proposed fare plan, nobody will see a fare increase if they switch to our most efficient fare media -- Chicago Cards and passes on the rail system, all non-cash fares on the bus system.

Cellphones

Why the heck are we spending money to put cellphones in the subways? [ 115. So the CTA will cut service to many commuters, but will pay over $11 mil so customers can talk on cell phones undergound.... Something is wrong here!]

Good question. First, the subway wireless system was upgraded after 9-11 so that firefighter and police radios will work in the subways. Second, CTA is seeking bids from cellular phone companies to pay CTA to offer their customers service underground by piggybacking on the upgraded system. The cellphone access will not impede the emergency response system, and the revenue from these contracts will help CTA's operating budget. In tough budget times, we have to be creative in finding new sources of revenue.

Employee complaints

From the Trib website: 101. I have physically witnessed attendants at the Montrose blue line stop SLEEPING in the booth...can we say "Pathetic"?

Please call 1-888-YOUR-CTA if you see this happening, with the time and location. If you can get the employee badge number, the railcar number or the bus number, that is also helpful. Incidents like this give a bad name to the thousands of CTA employees who work hard every day under pretty stressful conditions. We know that our success depends on good customer service, but we need you to help keep us on the right track.

Welcome!

I created this blog to answer some of the questions people have been asking about the CTA's funding situation. We on the board have asked many of these same questions, and we want to help get the word out. So please feel free to send comments or questions to ctaboard@transitchicago.com, and check back regularly for answers and updates to our efforts to increase transit funding.