CHICAGO TRANSIT BOARD APPROVES 2009 BUDGET

November 13, 2008

Board Reduces Fare Increase/Service Levels Maintained at Current Levels

The Chicago Transit Board today approved a 2009 operating budget that maintains service levels and eliminates a total of 632 positions. Although the Board approved a fare increase effective January 1, 2009, it modified the budget so that the changes to pass prices will be less than the 20 percent increase originally proposed.

The 2009 budget is $1.321 billion. CTA expects to generate $598.2 million in fares and other revenue and anticipates
$723.3 million in public funding. The economic downturn and significantly higher prices for energy, fuel and materials all impact the 2009 budget. In addition, tax revenues from the new State funding legislation have not achieved anticipated levels. The unanticipated free ride programs reduced projected fare revenues as well. These factors are exacerbated by the lack of a State capital program; without designated capital resources to replace aging equipment and infrastructure, the CTA has to devote additional operating funds to make necessary maintenance and repairs.

“In today’s economic climate government agencies, private businesses and individual households are facing budget challenges and CTA is no exception; nevertheless, the Board takes very seriously the public comments it receives and this year customers were very concerned about potential fare increases,” said Chicago Transit Board Chairman Carole Brown. “After careful consideration of all the factors that go into putting together the budget, the Board has amended the President’s recommendation to provide some relief to our customers. Instead of raising pass fares by 20 percent, the budget passed by the board will only raise them by about 15 percent.”

This proposed change would reduce CTA's projected fare box revenue by about $2.9 million and the difference would be made up with the projected cost savings from changes to the CTA’s Supplemental Retirement Plan, said Brown.

Under the revised budget, a 1-Day pass would increase from $5 to $5.75; a 3-Day pass would increase from $12 to $14; a 7-Day pass would go from $20 to $23; and a 30-Day pass would increase from $75 to $86. The current 2-Day and 5-Day passes will be eliminated. University Pass (U-Pass) fares, which are currently $0.70 per day, will increase by 15 percent for the Fall 2009 term.

Cash, Transit Card and Chicago Card fares will still increase by $0.25 to $0.50 depending on the fare media used. Reduced fares will remain the same as 2008 levels so fares will not increase for people with disabilities or students.

“CTA will continue to examine its operations and find ways to streamline costs, but will do so in a manner that does not adversely impact the quality of the service we provide our customers,” said CTA President Ron Huberman. “Customer service and satisfaction is our primary focus and we will continue to address the issues that concern our customers the most.”

Initiatives such as Bus Tracker, Slow Zone removal, reduction in big gaps in bus service, upgrading the fleet and improving customer communications remain high priorities.

Also approved as part of the budget was the CTA’s 2009-2013 Capital Improvement Program (CIP). It totals $3.0 billion, with $2.9 billion in projects to eliminate slow zones, renew assets, overhaul and replace the fleet, and bring the system to a state of good repair. In addition $40.0 million is programmed for the completion of the Brown Line Capacity Expansion Project, a vital system expansion.

The CIP includes a projection of $300 million each year during 2010-2013 from a successor to the Illinois FIRST program. The RTA has advised the CTA to anticipate that a State capital funding program will be in place by 2010.

The program does not divert scarce capital funds to balance the operating budget. The transfer of capital funds to operating would cause additional critical projects necessary for continued progress to a state of good repair to be delayed or cancelled.

Funding identified in the CIP will only partially meet the CTA’s needs to bring its system into a state of good repair. An estimated $6.8 billion remains unfunded over the five-year period of this CIP. This is due to the continued aging of assets and the lack of a new State capital program. Although a proposed new State funding program is projected to begin in 2010, projects which may be funded with these capital dollars will remain a part of the CTA’s unfunded need until a State program is passed and funds are appropriated.

In addition, to meet the needs of future growth in the region, the CTA will request $4.3 billion for expansion projects such as the Circle Line, and the Red, Orange and Yellow Line extensions. Maintaining the existing bus and rail system is a top priority; however it is also important to improve the connectivity and usefulness of the system by adding strategic connections and line extensions. As the bus and rail system operates more efficiently, the population of the entire Chicago region will benefit.

The 2009 budget is a performance-based budget process that examined the activities of each organizational unit to understand which could be made more efficient, reduced or eliminated in order for CTA to weather the economic challenges.

2009 Fare Chart

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