Operating Funding Summary

CTA's total estimated revenue for 2011 is 1.3 billion. There are two major categories of operating revenue for CTA: system-generated revenue through fares and other sources, and public funding through the Regional Transportation Authority (RTA), the fare agreement with the State of Illionis and the transfer of capital funds for preventive maintenance. System-generated revenue is projected at $612.3 million for 2011 and public funding is projected at $725.5 million. 

***A table is inserted here to present in thousands 2011 estimated revenue by source: 
Fare and passes, $523,660; 
Reduced fare subsidy: $28,000; 
Advertising, charters and concessions: $18,924; 
Investment income: $850
Statutory required contributions: $5,000
Preventive maintenance: $113,200
All other revenue: $35,817
Fare agreement with State: $83,000
Public funding through the RTA: $529,305
Total Revenue: $1,337,756***

***A pie chart is inserted here to present the break-down of forecast operating revenue in the year of 2011. 
Fare and passes, 39.14%; 
Reduced fare subsidy: 2.09%; 
Advertising, charters and concessions: 1.46%; 
Investment income: 0.06%
Statutory required contributions: 0.37%
Preventive maintenance: 8.46%
All other revenue: 1.14%
Fare agreement with State: 6.20%
Public funding through the RTA: 39.57%

SYSTEM-GENERATED REVENUE 

CTAs system-generated revenue is forecast at $612.3 million for 2011. CTAs system-generated revenue is based on the sale of fares and passes, subsidies for reduced fare riders per 1989 legislation, advertising, investment income, statutory required contribution from local governments by provision of the RTA Act and other revenues. These revenues are further defined below. 

Fares and Passes 

Revenue from fares and passes is forecast at $523.7 million in 2011 and is the largest portion of system-generated revenue. CTAs revenue from fare and passes includes cash fares, full-fare and reduced-fare cards, and Chicago Card and Chicago Card Plus fares. In addition, CTA also sells 30-day full fare and reduced fare passes, along with one-, three- and seven-day passes. Additional pass revenue comes from CTAs U-Pass for local university students, the sale of visitor passes and METRA Link-Up passenger revenue. 

Reduced Fare Subsidy 

This funding represents the reimbursement of revenues lost by the Service Boards due to providing reduced fares to students, elderly and riders with disabilities, as mandated by State law. The funding is subject to the terms of the grant agreement, state statute (20 ILCS 2705) and annual state appropriation. Reimbursement amounts are allocated to the service boards based on reduced-fare passenger trips taken during the grant year. Reduced fare subsidy is forecast at $28 million in 2011. 

Advertising, Charters and Concessions 

Advertising, charters and concessions revenue for 2011 is forecast at $18.9 million. 

The bulk of this revenue is received through advertisement on buses, rail cars and rail stations. This forecast also includes: concession revenue from 74 concessions within CTAs 144 rail stations, revenue generated from billboards, as well as revenue from Special Contract Guarantees, which includes agreements for transportation services for the University of Chicago, the Chicago Cubs and others. 

Investment Income

The CTA forecasts investment income at $850 thousand for 2011. This compares to investment income of $3.1 million in 2004, $5.4 million in 2005, $11.6 million in 2006, 
$12.1 million in 2007, $3.8 million in 2008, $1.3 million in 2009 and $850 thousand in 2010. 

The variation is largely attributed to changes in short-term interest rates. Federal Funds rates have increased from a low of one percent in June of 2003 to a high of 5.25 percent in June of 2006 before falling to near zero at the end of 2008. The rate has been idling between 0.1 percent and 0.2 percent in 2009 and 2010 to further stimulate investment. The 2011 rate is projected at 0.2 percent. 

Statutory Required Contributions 

The RTA Act requires the City of Chicago and Cook County to annually contribute $3 million and $2 million, respectively, towards CTA operations. 

Statutory Required Contributions in 2011
(in thousands) 
Contributions - City of Chicago: $3,000 
Contributions - Cook County: $2,000 
Total $5,000 

All Other Revenue 

The CTA forecasts $35.8 million in other revenue for 2011. Revenues in this category include operating grants from the Federal Transit Administration (FTA), parking fees, rental revenue, third-party contractor reimbursements and filming fees. There are 77 retail leases, including concessions in stations, storefront rentals, and leases within the CTA Headquarters Building. Parking revenues include Park and Ride Facilities (17 facilities with approximately 6,000 spaces), under L parking rentals and long-term parking agreements. 

PUBLIC FUNDING 

Most of the CTAs public funding for operating and capital needs is funneled through the RTA. Under the RTA Act, as amended in 2008, some of the funds are allocated to the Service Boards based on a formula included in the RTA Act. Other funds are allocated based on RTAs discretion. The sources and allocations are outlined below. 

Sales Tax Revenue per 1983 Formula 

RTA Sales Tax is the primary source of operating revenue for the RTA and the three Service Boards. The tax is authorized by Illinois statute, imposed by the RTA in the six-county region of northeastern Illinois and collected by the state. The sales tax is the equivalent of one percent on sales in the City of Chicago, one percent on sales in Cook County and 0.25 percent on sales in the collar counties of DuPage, Kane, Lake, McHenry and Will. The one percent sales tax in Cook County is comprised of one percent on food and drugs and 0.75 percent from all other sales, with the state then providing a replacement amount to the RTA equivalent to 0.25 percent of all other sales. Proceeds from the RTA Sales Tax are distributed to the CTA, Metra and Pace, and primarily fund operating costs not recovered through the farebox. The RTA 
retains 15 percent of the total sales tax and passes the remaining 85 percent to the Service Boards according to the following formula that is specified in the RTA Act. 

***A table is inserted here to present the funding allocation formula. According to 1983 Formula, the CTA gets 100% of the Chicago Sales Tax. As to Suburban Cook Sales Tax, the CTA receives 30% of it, Metra 55% and Pace 15%.  Of the sales tax collected from the Collar Counties, Metra gets 70% and Pace gets 30%. ***

The 2010 Sales Tax Budget for the Region is estimated to be $649,600 million and is distributed to the RTA and three Service Boards as follows: 

***A table is inserted here to present in thousands the allocation of the $649,600 million across the Service Boards. 

CTA:  $175,214 from Chicago Sales Tax Revenue; $86,402 from Suburban Cook Sales Tax Revenue; Total - $261,616 
Metra:  $158,404 from Suburban Cook Sales Tax Revenue; $62,257 from Collar county sales tax revenue; Total - $220,661 
Pace -$43,201 from Suburban Cook Sales Tax Revenue; $26,681 from Collar county sales tax revenue; Total - $69,883 
RTA $30,920 from Chicago Sales Tax Revenue; $50,825 from Suburban Cook Sales Tax Revenue; $15,695 from Collar county sales tax revenue; Total - $97,440 
Total: $206,134 from Chicago Sales Tax Revenue; $338,833 from Suburban Cook Sales Tax Revenue; $104,633 from Collar county sales tax revenue; 
Grand Total: $649,600 

In addition, RTA will distribute at its discretion any funds remaining from the initial allocation of the 15 percent sales tax distribution that is in excess of RTAs funding needs. 

Federal Assistance (Federal Transit Administration) 

RTA is the region's recipient of federal assistance, which previously included both operating and capital funds. FTA eliminated operating assistance for the CTA in 1998. 

Public Transportation Funds 

As authorized by the RTA Act, the Illinois State Treasurer transfers from the State General Revenue Fund an amount equal to 25 percent of RTA sales tax collections (or gasoline or parking taxes, if imposed by the RTA). The Treasurer transfers this amount to a special fund, called the Public Transportation Fund (PTF), and then remits it to the RTA on a monthly basis. Remittance requires an annual appropriation made by the State of Illinois. In addition, the RTA must certify to the Governor, State Comptroller and Mayor of the City of Chicago that the RTA has adopted a budget and financial plan in conformance with the requirements of the RTA Act. 
The RTA uses these funds at its discretion to fund the needs of the Service Boards, RTA operations, debt service and capital investment. RTA's 2010 Budget includes $162.4 million per the 1983 formula and $111.3 million per the 2008 Legislation formula in PTF funds. 

State Assistance 

The RTA Act provides supplemental State funding in the forms of additional state assistance and additional financial assistance (collectively, State Assistance) to the RTA in connection with its issuance of Strategic Capital Improvement Program (SCIP) bonds. The funding equals debt service amounts paid to bondholders of the SCIP bonds issued by the RTA, plus any debt service savings from the issuance of refunding or advanced refunding SCIP bonds, less the amount of interest earned by the RTA on the proceeds of SCIP bonds. The RTA Act limits the amount of State Assistance available to the RTA to the lesser of the debt service or $55 million. 
Remittance requires an annual appropriation made by the State of Illinois. 

2008 Legislation 

The 2008 State funding package increased the percentage of State sales tax dedicated to mass transit and gave authority to the City of Chicago to increase the Real Estate Transfer Tax (RETT) to support the CTA. In addition, the legislation also provided for long-term pension reforms that will increase the funded ratio of the CTAs pension to 90 percent by 2059. 

***A table is inserted here to present in thousands 2011 RTA Proposed Service Board Operations Funding.  

RTA: $270,005 from Sales Tax (1983 Formula);  $118,098 allocated to CTA through RTA discretionary funds; $7,500 allocated to Pace Mainline through RTA South Suburban Job Access Fund; $535 allocated to Pace Mainline through RTA discretionary funds; Total RTA Funds: $143,872
CTA: $271,850 from Sales Tax (1983 Formula); $109,356 from Sales Tax and PTF (PA 95-0708); $118,098 from RTA discretionary funds; $6,000 from Real Estate Transfer Tax  as 25% PTF; Subtotal funds from RTA: $505,305; $24,000 from Real Estate Transfer Tax (City of Chicago); Total CTA Funding: $529,305
Metra: $229,294 from Sales Tax (1983 Formula); $88,852 from Sales Tax and PTF (PA 95-0708);Total Metra Funding: $318,146
Pace Mainline: $72,617 from Sales Tax (1983 Formula); $29,617 from Sales Tax and PTF (PA 95-0708); $18,585 from RTA Suburban Community Mobility Funds; $7,500 from RTA South Suburban Job Access Fund; $535 from Pace - RTA Discretionary funds; Total Pace Mainline Funding: $128,854
Pace Paratransit: $92,921from Sales Tax and PTF (PA 95-0708); $8,500 from State Funding for ADA; $9,292 from ICE/ Additional Budget Balancing Actions; Total Pace Paratransit Funding: $110,713. 
Total:  $843,766 from Sales Tax (1983 Formula); $320,746 from Sales Tax and PTF (PA 95-0708); $6,000 from Real Estate Transfer Tax  as 25% PTF; $18,585 from RTA Suburban Community Mobility Funds; $8,500 from State Funding for ADA; $9,292 from ICE/ Additional Budget Balancing Actions. Subtotal RTA funds: $1,206,890. Real Estate Transfer Tax from City of Chicago: $24,000. Grand total funding: $1,230,890. ***

***A funding allocation flow chart is inserted here to illustrate the information above. Please refer to the original PDF document for more details. ***

