Chicago Transit Board Approves 2011 CTA Budget

November 10, 2010

Fares and Service to Remain Unchanged Next Year

The Chicago Transit Board today approved a $1.337 billion budget for 2011 that, through cost-conscious management, maintains current fares and service levels for riders.  The proposed budget is $66.7 million, or 5.2 percent, more than the 2010 budget due in part to contractually dictated union wage increases, along with pension and healthcare obligations.  These fixed increases will be partially offset by management efficiencies that are expected to save nearly $54 million in 2011.
“Maintaining fares for the second year in a row will be a great help to our riders who are being severely impacted by the recession every day.  At the public hearings, riders told us how they are struggling in this economy and cannot afford the financial burden of higher fares,” said Chicago Transit Board Chairman Terry Peterson.  “We have approved this budget as a result of our confidence in the state following through on its financial obligations.  Our budgets are always based on a series of assumptions and the revenue projections in this budget conform to the funding marks established by the RTA.”
Last year a borrowing agreement between the RTA and the State directed that in return for CTA not increasing fares for two years the agency would receive $83 million in bond proceeds.
“Being able to hold steady in a down economy is a good position for CTA at this time,” said CTA President Richard L. Rodriguez.  “In a perfect world we would like to see growth of our system but the financial realties we are contending with right now don’t allow for that in the immediate future.  We will continue to manage to our budget with an eye toward future plans for improvement as the economy recovers.”
The CTA projects a balanced budget as required by law.  The public funding mark set by the Regional Transportation Authority (RTA) is $529.3 million.  This public funding level is $92.5 million lower than in 2008 and $257.9 million lower than projected following the passage of the state’s mass transit funding and reform bill (HB 656) in 2008. 

To make up the difference between what it has and what it needs, the CTA will transfer $113 million in eligible capital funds to the operating budget.  Although the State is experiencing its own financial struggles, the CTA is relying on it to meet its commitments to the agency for operating funds for this year and next, and capital funds that have been promised.

The Recovery Ratio, which measures the portion of operating expenses the CTA has to fund from revenues it generates, is forecast at 54.6 percent, which is higher than the required ratio set by the RTA and considerably higher than the recovery ratio required in other transit systems across the country.
In the coming year, the CTA will be moving ahead with the first order of new rail cars in more than 15 years.  Also underway is a new initiative that will transform the way customers pay for transit and allow the CTA to avoid an upfront capital cost to upgrade fare equipment.  The CTA also plans to implement a biometric time and attendance system that will increase accountability and allow for better analysis due to more centralized data.
The 2011 budget includes a Capital Improvement Plan of $599.5 million, including $285 million in new state funding promised in the recent state capital program. Once those funds are received, the agency is ready with a list of projects that include overhauling buses; rehabilitating bus garages and rail stations; upgrading substations and replacing track to eliminate and prevent slow zones.
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