October 4, 2004

Illinois General Assembly Asked to Review Transit Funding Formula to Avoid Service Cuts

Chicago Transit Authority President Frank Kruesi today presented two starkly different budget recommendations for 2005. In September, the Board of the Regional Transportation Authority (RTA) directed that all three regional transit agencies, CTA, Metra and Pace, prepare two budget proposals for 2005, one that anticipates additional funding if the General Assembly acts to modify the current funding structure and provide additional funding for public transit, and another that anticipates no new funding. Unless the General Assembly supports RTA's operating and capital transit funding marks for 2005, CTA will have a significant budget deficit and will be forced to drastically cut service.

"At the unanimous direction of the RTA Board, CTA has created two budget scenarios, one in which the General Assembly acknowledges the critical need for public transit by increasing funding, and the second which outlines the impact if no additional funding is forthcoming. It reflects a substantially pared down version of the level of service customers receive today," said Kruesi. ?Both scenarios are presented so that CTA customers and the public are informed of both the service levels the CTA would like to provide its customers, and the budget that reflects dramatic service cuts that the CTA, and its customers, may be forced to live with. Simply put, the level of public funding provided to the CTA will determine both the amount and quality of service the CTA can provide to customers."

The formula that funds transit operations in this region is fundamentally flawed. The current funding formula was established by the Illinois General Assembly in 1983. It determines funding levels based on geographic boundaries and retail spending rather than ridership, service provided or other transit performance criteria. Most fundamentally, it does not sufficiently fund transit services.

Funding erosion has contributed to difficult budget decisions year after year and each year CTA staff worked diligently to find more ways to cut costs, operate more efficiently and increase revenues. But with each new budget year, it has been harder to find ways to reduce costs without impacting customers and service levels.

"If CTA receives adequate funding, it will be able to maintain current service levels and build on them to sustain the momentum of ridership growth in five of the past six years," explained Kruesi. ?But without adequate funding, CTA will have no choice but to drastically restructure its service in order to achieve a balanced budget. This is not a choice the CTA wants to make. But we are at a crossroads and it is now time for the General Assembly to look at the way in which transit is funded and the consequences of not updating the funding amount or formula for more than two decades."

In the hopes that the General Assembly will acknowledge the importance of public transit to the region, the first of Kruesi's 2005 budget recommendations seeks to promote increased regional mobility. It recommends an operating budget of $1.02 billion that would include a public funding level of $524 million?an increase of $82.5 million over 2004. This level of funding will enable CTA to maintain current service levels and continue developing service improvements to build ridership. This will include the addition of weekend service on the Cermak (Douglas) branch of the Blue Line and may include other enhancements resulting from the West Side Corridor Study.

CTA remains committed to carefully managing its operations and improving efficiency. Since 1997, CTA has reduced operating costs by over $760 million, including the reduction of more than 1,100 positions and increased bus and rail service. Since 1998, CTA has made service improvements on 68 percent of its bus routes (103 out of 152 routes), and on all seven of its rail routes. A total of 281 improvements have been implemented which include 25 new bus routes, expanded hours of bus service, expanded hours at rail entrances, added trips to reduce wait time, and route changes to improve access and connectivity. The greatest number of improvements has been to add trips to improve the frequency of CTA buses and trains.

In 2004, the CTA cut 446 positions and raised base fares for the first time in 12 years in order to eliminate an $88 million deficit. In 2005, CTA has proposed the reduction of an additional 200 positions resulting from new or continuing initiatives that have helped CTA to hold the line on expenses. Without these internal cost control efforts, CTA's budget would be $120 million higher.

In addition, select fees and fares will increase to help maintain critical aspects of the system. These include the University Pass (U-Pass), parking fees and paratransit fares. Increases will help offset the cost of providing these services.

Without action from the General Assembly to correct CTA's funding erosion, CTA will be forced to implement the second scenario that will lead to increased regional gridlock in 2005 as a result of service cuts. The funding level and service assumption embedded in CTA's preferred 2005 budget proposal will be revised to reflect the limited funding that will be available to CTA.

In that environment, the RTA will only provide public funding of $441.6 million to CTA in 2005, the same level of public funding CTA received in 2002. This will result in an operating budget of $912 million. This funding level is 2.68 percent less than CTA received in 2003; considering inflation, it amounts to a funding decrease of $35.7 million in real terms.

Under this budget scenario, the CTA proposes to eliminate 250 jobs that are not directly involved in the delivery of bus or rail service. This brings the total number of positions eliminated since 2003 to 696 and represents an 11.5 percent reduction in the non-service workforce.

Fare increases for paratransit customers are planned. Like Pace, the CTA is required under the Americans With Disabilities Act to provide these critical paratransit services. This is an unfunded mandate, however, and the CTA receives no dedicated funding. These costs continue to grow faster than the projected rate of inflation due to a combination of service provider rate increases and growth in the number of trips provided. Purchase of paratransit services are projected to increase by 16.3 percent over the 2004 budget to $52.5 million, which represents 5.1 percent of CTA's total operating cost.

Fares for the taxi access program (TAP) will increase to $3.50 from $1.75. Paratransit customers using the curb-to-curb service will see an increase to $3.50 from the current fare of $1.75. In addition, the price of a 30-day paratransit pass will increase to $150.

Fares on the main service for seniors, students and customers with disabilities will remain at the reduced rate of 85 cents.

In addition to the paratransit increases, fares for the discounted University Pass (U-Pass) will increase by 10 cents per day to 70 cents. An increase in parking rates to $2.00 is also proposed.

These changes coupled with the workforce reduction enabled CTA to reduce the 2005 projected budget shortfall from $77 million to $55 million. Without these and other cost control efforts implemented in prior years that have saved CTA $120 million each year, the deficit for 2005 would be over $195 million.

This $55 million projected deficit for 2005 will be eliminated through service cuts (proposed rail service cuts, proposed bus service cuts) and layoffs that will result from lower service levels. With service cuts, the CTA anticipates that 1000 bus and rail operating jobs will be eliminated.

The CTA does not want to cut service, but without adequate funding CTA cannot continue to operate at its current service levels. Furthermore, CTA will have to reduce the operating budget by an additional $34.4 million in 2006 and by $10.3 million in 2007 in order to balance its budget and meet the recovery ratio mandated by the RTA under the current formula. In other words, the combined service reduction over the coming three-year period is estimated at $100 million of the current service level.

Without additional funding, more than one-fifth of existing CTA bus and rail service will be eliminated in January 2005. This represents a reduction in bus vehicle hours of 21.5 percent and a reduction in rail vehicle hours of 11 percent. The number of peak period buses eliminated under this proposal is over 300. Of the current 152 bus routes in operation, 30 will be eliminated completely including weekdays, Saturdays and Sundays. An additional 21 routes will have weekend service eliminated, and nine others will have a segment of the route eliminated.

In addition to the elimination of some services, virtually all bus and rail routes will face some service reductions. Service frequency and hours of service will be decreased on many routes.

The service cuts were chosen through an analysis that considered ridership, geographic distribution and federal requirements. In addition, the importance of retaining 24-hour service and regional connections were factors in the decision-making. For the bus system, the primary measure used to establish the initial list of service reductions was route productivity. Route productivity is defined as the number of riders per vehicle-hour of service. Routes were reviewed for reductions if the productivity per hour was lower than 75 percent of the system average for the time period in question. Additional criteria were then applied, which included the desire to continue 24-hour service, and protection of growing markets and regional connections. Lastly, retention of service on key routes was favored over service on support routes.

In considering service cuts on the rail system, the substantial capital investment contained in CTA's rail infrastructure was a factor in determining the scope of reductions. Because of the infrastructure investment already made, rail service is generally more productive than bus due to the additional capacity inherent in train service. One operator can carry many more people with a train than with a bus. To determine service reductions on the rail system, ridership was reviewed by time period to identify when service could be reduced. The reductions were then reviewed for geographic considerations and adherence to federal requirements.

In order to implement this service reduction package, CTA's current Service Standards adopted in 2001 must be temporarily suspended. Given the magnitude of the budget deficit and the resultant service reductions needed, all five primary Service Standards are compromised.

"These examples of reduced services are the first step in a series of cuts that will be required if CTA's funding level continues to erode," explained Kruesi. ?In 2005, $55 million in service will be cut. Without corrective action that provides CTA with sustainable funding relief, additional cuts will follow in 2006 and 2007."

These reductions will be felt both by residents and businesses throughout the region. Pace and Metra will also be impacted by a reduction in CTA service. Millions of Pace and Metra customers connect to CTA services each year. Rapid transit service will operate less frequently and hours will be shortened, making transfers to the less frequent Pace system more difficult. Similarly, Metra customers who today transfer in the Loop to buses that provide links to Michigan Avenue, State Street, Navy Pier and McCormick Place will have a more difficult time making connections.

"A strong transit system reduces congestion, improves air quality and enhances economic competitiveness. Through the combined systems of CTA, Metra and Pace, the Chicago area has one of the most extensive public transit networks in the United States. But transit is not appropriately funded in this region and we are all suffering the consequences," said Kruesi. ?CTA's funding has lagged nearly one full percentage point behind inflation for the past two decades. The resultant loss of purchasing power is the core of the financial crisis facing CTA today. If funding for operating CTA buses and trains had just kept even with inflation, the CTA would be receiving a projected $100 million more in 2005 compared to 1985, or cumulatively $1.5 billion. Without additional funds, CTA will continue to lose ground."

CTA customers and the general public will have the opportunity to provide comments to the Chicago Transit Board on the proposed service cuts and budget at upcoming public hearings. Public hearing dates and locations are as follows:

Thursday, October 14 at 6:30 p.m.Roberto Clemente High School1147 North Western

Tuesday, October 19 at 6:30 p.m.Chicago State University ? Jacoby Dickens Athletic Center9501 South King Drive

Monday, October 25 at 6:30 p.m.Evanston Township High School ? Bacon Cafeteria1600 Dodge Avenue

Wednesday, October 27 at 4 p.m. Palmer House Hilton17 East Monroe

Further information on planned service reductions can be found on www.keepchicagolandmoving.com or at the Office of the Secretary, Chicago Transit Authority, Merchandise Mart Plaza, Room 738, Chicago, Illinois.

Written comments may be submitted through November 5, 2004, by writing to the following address: Chicago Transit Authority, P.O. Box 3555, Chicago, IL 60654, Attention: Gregory Longhini, Assistant Secretary.

E-mail comments may be submitted through November 5, 2004, by writing to ctahelp@transitchicago.com.

The proposed budget is available for public review at the CTA's General Office at the 567 W. Lake Street, 2nd floor, weekdays between 8 a.m. and 4:30 p.m. Regular and large print copies are available at this location. Audio copies are also available by request.

Copies will also be available at the main office of the Regional Transportation Authority located at 175 W. Jackson, 15th floor, Chicago. A copy of the proposed budget is also posted on the CTA's web site at www.transitchicago.com. A list of libraries and additional locations where the document will be available is attached.

# # #

Copies of the budget proposal will also be available at the reference desks of the following libraries:

Chicago Public Library - 3 Regional Locations

Harold Washington Public Library400 S. State Street, 10th FloorChicago, IL 60605

Sulzer Regional Library4455 N. Lincoln Ave.Chicago, IL 60625

Woodson Regional Library9525 S. HalstedChicago, IL 60628

Chicago Public Library - Branches

Archer Heights Branch Library5055 S. Archer

Austin Branch Library5615 W. Race Ave.

Jefferson Park Branch Library5363 W. Lawrence Ave.

Marshall Square Branch Library2724 W. Cermak Rd.

Midwest Branch Library2335 W. Chicago Ave.

South Shore Branch Library2505 E. 73rd St.

Suburban Libraries

Evanston Public Library1703 Orrington Ave.Evanston, IL 60201

Evergreen Park Public Library9400 S. TroyEvergreen Park, IL 60805

Oak Park Public Library834 Lake St.Oak Park, IL 60301

Riverdale Public Library208 W. 144th St.Riverdale, IL 60827

Skokie Public Library5215 W. OaktonSkokie, IL 60077

Back to news