Watson and fares

This week, there has been a lot written about the recent Legislative Leaders’ meeting attended by Mayor Daley, including the Republican Minority Leader Frank Watson’s assertion in that meeting that CTA has not raised fares adequately over the years. The Senate Minority Leader believes that CTA could address most of its structural deficit through a 10 to 15 percent increase in fares. As most of our CTA customers and the readers of this blog already know, CTA is in its present woeful fiscal condition because we have faced a structural deficit since the early 1980’s caused in part by insufficient State funding. This funding has trailed the rate of inflation, short-changing CTA over $1 billion in operating dollars.

As you also already know, CTA’s structural deficit was confirmed repeatedly by the Auditor General in his voluminous audit of the RTA, CTA, Metra and PACE last year. Moreover, the Auditor General acknowledged in his report that it would be impossible for CTA to overcome its funding deficit through cost-savings (service cuts) and revenue enhancements (fare increases).

CTA customers have paid for this imbalanced funding through frequent fare increases. CTA has raised its in 1986, 1988, 1990, 1991, 2004, and 2006. In fact, since 1985, CTA’s fares have increased 95 percent, exceeding the rate of inflation and causing us to lose millions of rides as a result.

Maybe the Senate Minority Leader has forgotten this. Maybe he doesn’t believe the facts (how do you not believe the Auditor General?). Maybe that is why he is advocating requiring another 10 to 15 percent fare increase as part of any transit solution. I’d like to remind you, just in case you’re swayed by the Minority Leader’s rhetoric, that CTA’s structural deficit cannot be and should not be solved on the backs of our riders.

Before any of you write: “Wait, Carole isn’t that what you are doing now with the January 20 Fare Increases and Service Cuts?”, please know that unfortunately, cutting service and raising fares is the only way that we can balance our budget right now. But I know it is not a solution. This structural problem can only be overcome by comprehensive, long-term legislative changes to our pension and healthcare obligations and by a permanent, sustainable increase in operating funding.

Fares and transit funding

This New York Times editorial from today’s paper is certainly relevant to the transit funding discussion that’s been happening on this blog and elsewhere. I’d like to hear your thoughts on it.

2007 budget draws to a close, 2008 budget deficit looms

Our 2007 budget year will end without service cuts or fare increases because Governor Blagojevich gave CTA a one-time grant of $21 million that will allow us to get through December.

But because Springfield did not pass a long-term funding package, CTA must now prepare for even more dramatic deficits and consequently even more dramatic measures to balance our budget as required by law. To that end, the Transit Board voted on Wednesday to send CTA’s 2008 budget to the RTA for approval. Based on the RTA’s funding marks for us, the budget has a $158 million deficit. A deficit this size can only really be addressed by: (1) reducing expenses (service cuts) and (2) increasing revenue (fare increase) or, (3) securing a long-term sustainable funding package from Springfield that also gives CTA the tools to address its pension problems. It is this last option that we are continuing to spend our time working toward.

So, the new date we’re looking at for service reductions and fare increases is January 20, 2008. We remain optimistic that the General Assembly will act on legislation before then.

I would also encourage you to read John Hilkevitch’s front page story in today’s Trib reminding readers (elected and other) that the region’s capital infrastructure desperately needs state investment, and CTA’s $6 billion in capital needs are exhibit A.