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2018 Budget Q&A

Questions & Answers About Our Proposed 2018 Budget

On this page, we answer some of the questions you may have about our proposed 2018 budget.

 

Questions & Answers

 

A Letter from our President

November 22, 2017

Dear Customer:

Today, the CTA announced its proposed 2018 budget. It preserves the same bus and rail service we currently offer, and continues the important investment in modernization we’ve been making since 2011—new and improved stations, track repairs to speed travel times, new technology to improve the customer experience, and many other improvements. Additionally, the proposed 2018 budget is nearly $10 million less overall than our 2017 budget—demonstrating our continuing commitment to hold the line on spending.

The 2018 proposed budget also includes a proposed increase in the base fare of 25 cents. It’s the first time we’ve proposed a change since 2009. No other major transit agency in the country has held the line on fares this long. We also proposed a $5 increase in our unlimited ride 30-day pass.

I want to take a moment to tell you what led to this decision.

First, earlier this year the state cut CTA’s annual funding level by $33 million. That’s the equivalent of 50 bus routes. That cut, coupled with historically low gas prices, new marketplace competition and other factors, posed an unprecedented challenge to our budget. In essence, money on which we’ve traditionally relied simply wasn’t there.

So the first thing I did to meet this challenge was to look internally for cuts—things that we could do that wouldn’t impact our customers or our service. Since I became CTA president in 2015, I have achieved more than $100 million in savings—everything from eliminating vacant positions to locking in low fuel and power prices. We also found ways to increase our advertising and concession revenues, to supplement the revenues from our fares.

For 2018, I found more than $20 million in additional cuts, and about $3 million in new advertisement and concession revenues. But those cuts and revenue enhancements alone weren’t enough to meet the challenges we faced.

Raising fares is an option of last resort and is a decision I don’t take lightly. I only considered this action after we did everything we could internally to tighten our belts.

Even with a modest fare increase—one that is in line with the rate of inflation since 2009—CTA remains an affordable, convenient and accessible transportation option, and the most environmentally friendly in town. In 2018, we are looking at a number of ways to continue to improve our service, and your day-to-day experience as customers. I look forward to announcing some of those improvements next year.

I am grateful to have each of you as CTA customers, and pledge to continue working to provide the affordable, reliable service that you deserve.

Sincerely,
Dorval R. Carter, Jr.
President
Chicago Transit Authority
 

Q&A: Fares & expense reductions

Q. What fare increase has CTA proposed?

A. We’ve proposed a base fare increase of just 25 cents. The proposed new full fare would be $2.50 for rail and $2.25 for bus when deducted from a Ventra Card’s transit account.

Additionally, reduced-fare rides, which are about 50% of full fare prices, would rise 15 cents to $1.25 for train rides and $1.10 for buses.

30-day unlimited ride passes would increase by only $5 to $105.

More info: You can find complete details in our 2018 Budget Recommendations book or in the Public Notice.

 

Q. What fares will remain the same?

A. The following fares will remain the same: 75-cent student fares; 1-Day, 3-Day and 7-Day unlimited ride CTA passes ($10, $20, and $28, respectively); and CTA Single-Ride and 1-Day Ventra tickets ($3 and $10, respectively). Train rides originating at O’Hare will remain $5.

 

Q. When did CTA last raise fares?

A. Our base fares have remained unchanged for nearly a decade – the last base fare increase was in 2009. Since 2009, no other major U.S. transit agency has held the line on fares for so long.

 

Q. Why do you propose to raise fares?

A. Earlier this year, the state cut CTA’s 2018 funding level by $33 million.

That, coupled with historically low gas prices, new marketplace competition and other factors, posed an unprecedented challenge to our operating budget.

Immediately we ruled out cutting service, which is critical to keeping our city moving. We looked for every cost saving and efficiency we could find, as well as new revenue from sources other than fares and came up with about $23 million.

Raising fares is always an option of last resort. Our base fares for bus and rail have been untouched since 2009—nine years ago.

However, faced with cuts in state funding, it’s the only option we had to balance our budget, even after all of the steps we’ve taken to make up for the cut in state funding.

 

Q. Why only 25 cents? Does the fare increase pay for your whole deficit?

A. We’re sensitive to our customers’ need for low-cost, reliable transportation, and believe it’s important to implement only a fare increase that will allow us to cover the expenses of running a transit system. Our cost-saving efforts and efficiencies have helped limit the increase we’re seeking.

The additional revenue of $23 million from the fare increase will help offset the $33 million reduction in state funding to CTA in 2018. The balance will be offset by various expense reductions and revenue enhancements, such as increasing revenue from advertising sold on the CTA system.

By increasing new revenue, we can keep service levels stable and support additional service we’ve started providing in the last couple of years.

 

Q. Did you cut expenses before raising fares?

A. We’d never ask you to shoulder a fare increase without examining every way possible to reduce our expenses. In fact, we’ve done everything we can over the last several years to hold the line on fares.

Since 2011, we have achieved about $300 millionin both cost savings and generating new revenue that comes from sources other than fares, largely from advertising and concessions. These have helped to keep our fares stable and maintain the levels of service we provide.

 

Q. Are our fares more expensive than other cities?

A. CTA’s base fares have been at the same level since 2009. No other major transit agency in the country has kept their fares level during that period.

Our proposed increase is in line with inflation and keeps CTA in the middle of the pack of major US transit agencies:

A chart showing other agencies fares. CTA is among the lowest of major cities on this chart and the changes will only move us slightly up toward the middle of the group.
 

 

Q&A: Bus & rail service

Q. Are you cutting bus and train service to balance your budget?

A. No. We deliberately chose to avoid cutting service, but determined that it is simply not a viable option. We owe it to our customers to preserve and improve service, not reduce it, because so many depend upon us to get to work, school, run errands and more. The changes to our fare structure help us maintain service as it is (including recent additions to service on several routes) with as minimal an effect as possible to our riders.

 

Q: Sometimes service is late or buses are bunched. Can’t you just operate more efficiently?

A: We continually work to make our service operate more efficiently and cost-effectively, and have done so to great effect.
Our efforts include regular and comprehensive analysis of performance and identification of areas where service can run more efficiency, as well as working on internal cost cutting measures to keep our operating costs as low as possible.

Delays can still occur despite us running an efficient service—bus bunching or unexpected backups can be caused by even seemingly minor events outside of our control, such as irregular traffic, a street blockage, or a person falling ill aboard a train…Delays on every transit system are unavoidable and we go to great lengths to prevent and be ready to mitigate delays as best we can. (You can learn more about how, here.)

Yet we always work to do better, identifying new technologies and solutions both to improve service and help empower people get on board with ease and stress-free.

The result of our efforts is that we operate bus and rail service in a way that, compared to many of our U.S. transit peers, is highly efficient and puts us among the best by cost per bus and rail revenue mile (operating train service at a lower cost per revenue mile than New York, DC, Boston, Philly and Atlanta).

A chart showing bus service efficiency where CTA compares to LA, Philly, DC, Boston & NYC. CTA is second lowest in operating expense per revenue mile and lowest in expense per revenue hour.

A chart showing rail service efficiency where CTA compares to LA, Philly, DC, Boston & NYC. CTA leads in both operating expense per revenue mile and revenue hour.

If you’re interested in more charts and details, you can check out more comparisons based on data from the National Transportation Database in our 2018 Budget Recommendations in a section that begins on page 175.

 

Q. Are you adding any new service?

A. We’re proud to say that we’re preserving all of the new service we’ve added in recent years, including additional rush-hour rail trips on some lines and added service on six South Side bus routes.

 

Q&A: Ride-hailing fee

Q. What is the city ride-hailing fee that CTA will receive?

A. Mayor Emanuel has found an innovative way to provide much-needed capital funding for important CTA projects that improve service for customers.

In fact, Chicago will be the first city in the nation to institute a fee on the ride-hailing industry dedicated specifically to public transit capital improvements.

The City of Chicago’s 2018 budget approves n increase in the current fee for ride-hailing services of 15 cents in 2018 and an additional 5-cent increase in 2019.

The 15-cent increase is expected to bring CTA $16 million of revenue in 2018 and the additional increase in 2019 would bring in expected revenue of $30 million.

 

Q. What does the ride-hailing fee pay for?

A. The ride-hailing fee increase will be dedicated solely to CTA capital projects, including track and station improvements that will benefit CTA customers.

The projects will be spread out across the system—to benefit the greatest number of riders and will help speed commutes, enhance customer experience, and continue to build on the Mayor’s investment in transportation.

 

Q. Why can’t you use ride-hailing revenue to avoid a fare increase?

A. We actually have two budgets: An operating budget that pays for day-to-day operation of CTA trains and buses, and a capital budget that pays for capital improvements, such as track repairs, station improvements, new and overhauled buses and trains, etc.

We’re seeking a fare increase to balance our 2018 operating budget, which had $33 million of state funding cut from it for 2018, among other factors that have decreased available money to provide the service that we do. We’ve achieved about $300M in both cost savings and generating new revenue that comes from sources other than fares, largely from advertising and concessions; however, a fare increase is necessary beyond those measures to balance its 2018 budget.

Our second challenge is its capital needs. We currently have a $13 billion backlog of infrastructure and modernization needs, and the State of Illinois has not passed a capital funding bill to pay for transportation investments since 2009.

The ride-hailing fee will be used solely for infrastructure projects that will directly benefit customers.

 

Q&A: State funding

Q. Why is there less State funding for CTA?

A. The State’s 2018 Budget passed by the General Assembly this summer included funding cuts for public transportation, including CTA, which provides more than 80% of the region’s transit rides, as well as Metra and Pace.
The state cut 10% from a pot of money intended for all three transit agencies to partially match regional sales taxes, and imposed a 2% charge for collecting those taxes for the region. Both Metra and Pace have approved fare increases for 2018.
In addition, sales tax revenues, another source of revenue for CTA, Metra and Pace, have declined.

 

Q. Is the economy affecting CTA?

Yes. State sales tax have been lower, negatively affected by lower gas prices and an increase in online shopping, which doesn’t always provide the same level of tax revenue as traditional brick and mortar stores.
 

 


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