Chicago Transit Board Approves 2008 Budget

November 7, 2007

The Chicago Transit Board today approved a 2008 budget that includes significant service reductions, fare increases and layoffs in order to bridge a projected $158 million shortfall. At the same time, the Board expressed hope that the Illinois General Assembly can reach agreement on a transit funding package so that the actions can be averted.

Effective January 20, 2008, the CTA will eliminate 81 of its 154 bus routes; lay off more than 2,400 employees; and raise fares to record levels. In addition, with more than 700 fewer buses operating due to the bus route eliminations, the CTA will close three of its eight garages. Service on the remaining routes will be provided by other locations.

Based on testimony at recent public hearings, the Board opted to add back one bus route that had been proposed for elimination. The #30 South Chicago operates between the far south east corner of the city and the 69th Street Red Line station. The Board determined that because of a lack of alternative services at the far end of the route, eliminating it would leave a large area with no transit options.

Fares will move to a tiered system with higher fares being charged during rush periods, for rail service and to those customers who pay with cash. The lowest fare will be $2.25 for a non-peak hour bus ride for Chicago Card or Transit Card users. The highest fare, $3.25, will be charged on the rail system during peak hours to those who pay cash. Unlimited ride passes will still be available, but at a higher price. The 1-Day Pass will increase from $5 to $7; the 7-Day Pass from $20 to $25; and the 30-Day from $75 to $94.

Chicago Card and Chicago Card Plus users will still benefit from lower fares than cash customers and a 10% bonus for every $20 purchase. To make Chicago Cards a more affordable option, going forward, the $5 fee for the cards will be waived for first-time users who register their cards. A $5 fee will still be charged for replacement cards and to customers who elect not to register.

In order to minimize the impact on those least able to pay, fares will not be increased for reduced-fare riders (senior citizens, students or individuals with disabilities).

"We want CTA customers to know that this budget has been approved with great reluctance and regret. After working diligently all year with the General Assembly to craft a long-term solution to CTA's structural funding deficit, we had hoped to have put funding shortfalls behind us for 2008. But with no resolution yet, we had to approve a budget that reflects financial realities," said Chairman Carole Brown. "We are very sympathetic to the concerns raised by our customers and we have made some changes to try and address some of those concerns, but with a $158 million shortfall, there is not a lot of flexibility. We know that transit is a life-line for many of our customers and we will continue to fight for funding on their behalf."

The proposed 2008 operating budget is $1.034 billion, which is $45 million lower than 2007. The CTA expects to generate $562 million in fares and other revenue and anticipates $472 million in public funding. In order to maintain service and fares at current levels, the CTA needs an additional $158 million in public funding for 2008. This is due to shortfalls in three areas:

  • The CTA's funding agency, the Regional Transportation Authority, reduced the CTA's funding level by $14 million compared to the mark they provided in last year's financial plan.

     

  • The CTA's public funding is growing at a much slower rate than related expenses. Public funding levels only increased by four percent over the past five years and trailed inflation, which increased by 11.3 percent in the same time period. By comparison, CTA has also experienced substantial cost increases in fuel, materials (due to a lack of capital funds) and security.

     

  • Pension and healthcare reforms proposed by the CTA have not been approved by the General Assembly. Not having these reforms in place yet is estimated to cost the CTA more than $11 million each month. Without them, the CTA will incur increasingly higher costs for providing these benefits and the historic union agreement previously reached will expire.

"We realize this budget will cause tremendous hardships for CTA customers, employees and the economy of the region, but next year the CTA simply will not have sufficient funding to continue providing the same level of service as it does today," said CTA President Ron Huberman. "We know our state leaders are also aware of the harmful impact and we continue to remain hopeful that they will reach an agreement to provide new funding for the CTA before the budget takes effect."

The CTA has grappled with a steep decline in inflation-adjusted funding levels. The CTA's public funding for mainline bus and rail operations trailed inflation by approximately one percent every year. If funding since 1987 had kept even with inflation, the CTA would have received cumulatively $1.6 billion more to operate its buses and trains.

CTA Funding and Inflation 1987-2007

The budget includes the five-year Capital Improvement Program (CIP). It totals $2.4 billion, with $2.2 billion in projects to remediate slow zones, renew CTA assets, overhaul and replace the fleet, and $0.2 billion programmed for vital system expansion, including completion of the Brown Line capacity expansion project. Unlike prior years, the proposed program does not divert scarce capital funds to balance the operating budget as CTA has no unobligated capital funding remaining.

Funding identified in this CIP will only partially meet the CTA's needs to bring its system to a state of good repair. Of the $8.7 billion needed to reach a state of good repair, an estimated $6.3 billion remains unfunded during the five year period of this CIP and further investment will be necessary for proposed expansion projects.

The Chicago Transit Board must submit a budget to the RTA by November 15th and the RTA must approve budgets for the service boards by year end.

 

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January 2008 Fare Structure

January 2008 Route Eliminations


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