CTA Board Approves Modified Contingency Plan

August 8, 2007

September 16 Start Date for Service Reductions and Higher Fares

The Chicago Transit Board today approved a budget-balancing plan that will reduce bus service by 8% and raise fares on September 16 if a state funding package for transit is not approved. The plan is a modified version of a contingency plan proposed in May. Chicago Transit Authority President Ron Huberman said that positive budget results from internal belt tightening measures, labor savings through arbitration, and increased fare revenue due to higher ridership will enable the agency to offer a modified plan that incorporates feedback from a series of public hearings and impacts fewer CTA customers.

The CTA's contingency plan combines labor savings and administrative cuts and efficiencies with a fare increase (Contingency Plan Fare Structure) (PDF), an 8% reduction in bus service (Proposed Service Reductions) (PDF), and the transfer of capital funds that had been intended for renovating buses and rail cars. These measures will bridge the gap in CTA's 2007 budget that was created because the agency, under a directive from the Regional Transportation Authority, developed a 2007 budget that anticipated $110 million in additional state funding. As of today, the General Assembly has not approved a transit funding package, so the CTA must move ahead with its contingency plan. The CTA is required by law to have a balanced budget.

"We regret that we have to move ahead with these plans. CTA has done everything it has been asked to do to get our finances in order, including reaching a significant labor agreement where our employees have agreed to fix long-term problems with the pension and health-care system. We have taken multiple steps to reduce costs to avoid impacting our riders. But transit has a structural funding problem and management efficiencies alone won?t solve it. Without adequate funding from Springfield, we will be forced to reduce service and raise fares," said Huberman.

"Today is a day that we hoped would never come," said Board Chairman Carole Brown. ?Although I remain optimistic that state lawmakers will provide increased transit funding, I am disappointed that we are forced today to put our employees and customers through the uncertainty of planning for service cuts and fare increases. And - here's the worst part - if Springfield doesn't act, we will be back at the end of September preparing another deeper round of cuts for 2008."

In addition to incorporating public feedback, Huberman said the revised recommendation adheres to the three guiding principles laid out by the Chicago Transit Board: maintain as much availability as possible for transit dependent customers; maintain regional connections where possible; and spread the burden of cost reductions in an equitable manner. It also is compatible with federal Title VI guidelines that ensure minority routes are not disproportionately impacted and Environmental Justice analyses regarding impacts on populations that are below the poverty level.

The plan assumes $18 million from previously announced administrative cuts and efficiencies. The service reductions will save $7.5 million and the fare increase will provide $7.5 million in revenue this year. $57 million will come from the transfer of capital funds to operations and an additional $20 million from lower overall labor costs due to fiscal controls; overtime reductions; fewer consulting services; income from rental properties; the sale of obsolete equipment; wage and benefit savings through contract negotiations; and higher fare revenue due to increased ridership.

Under the modified plan, 39 bus routes will be eliminated, instead of the 63 routes identified in the previous plan. The remaining 115 routes will continue to operate at their current levels. Huberman said efforts were made to identify and keep routes that provide key connections, operate seven days a week, offer late night coverage or are subsidized. Twenty-seven routes on the original list for cuts have been added back, but three other routes, #19 United Center Express, the X80 Irving Park Express and the #130 Grant Park Treasures have been identified for elimination.

Because rail service can transport people at a lower cost than bus service, no rail service will be eliminated by the new plan. But, to provide additional capacity along the Red Line, the Purple Line Express service will now stop at Sheridan.

Fare increases for individual rides range from 25 cents to $1.00, depending on the time and mode of travel. The fare increases are generally lower than those proposed in the May contingency plan.

  • Bus fares will rise to $2.00 (using Chicago Card/Chicago Card Plus or Transit Card) or $2.50 (using cash).
  • Rail fares will rise to $2.00 (using Chicago Card/Chicago Card Plus) or $2.50 off-peak and $3.00 peak (using Transit Cards or cash). Peak periods will be 6:30-9:30AM and 4:00-7:00PM.
  • Transfers will remain the same at 25 cents. Transfers are available only to customers paying fares with Transit Cards or Chicago Card/Chicago Card Plus.
  • Prices for unlimited ride passes will increase 11-20%, with the 1-Day Pass increasing from $5 to $6; the 7-Day Pass going from $20 to $23, and the 30-Day Pass increasing from $75 to $84.
  • Fares for reduced fare customers, who include seniors and persons with disabilities, will not change.
  • The $5 fee for Chicago Cards and Chicago Card Plus will be waived for September and October.

Due to the service reductions, the CTA intends to layoff a commensurate number of employees. Plans call for layoffs of nearly 700 employees, including bus operators, bus servicers, mechanics and Transportation Managers. In earlier cost cutting efforts, 75 administrative jobs were eliminated.

"We have been working in good faith to show the General Assembly that the CTA has done its part to lower our costs, be more efficient, and identify solutions to our pension and health care problems. It has been our goal to avoid having to take actions that would impact the riding public," said Huberman. ?It is very disappointing to be at the point where we have to begin implementing our contingency plans."

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