Union work rules, escalating pension and health care costs and highest salaries in nation fuel deficit
The CTA faces a $277 million budget deficit for 2012, the result of skyrocketing labor costs and an end to years of borrowing, CTA President Forrest Claypool announced today.
The CTA’s current operating budget is $1.35 billion.
Citing archaic and expensive work rules, dramatically escalating pension and health care mandates, and the highest cost-adjusted rail and bus operator salaries in the nation, Claypool said current CTA labor costs are unsustainable.
Noting that the CTA has borrowed $554 million in the past four years to cover operating deficits, despite a 2009 fare hike and 2010 service cuts, Claypool said it was time to deal with these challenges and make decisions that will fix the CTA’s broken fiscal system.
“We can’t defer the hard decisions any longer. The CTA’s cost structure is too high given the revenues and tax receipts we have to operate it,” Claypool said. “Changes are needed now to shore up the CTA’s fiscal situation. A robust, modern transit system is not just important to transit riders. It is important to the livability of the region and its ability to attract jobs and businesses. An investment in transit is an investment in the future of this region.”
The financial crisis affecting the CTA has taken years to develop, Claypool said, and has its roots in funding formulas that shortchange the agency, a neglected infrastructure, and a growing list of expensive state and federal mandates.
But the biggest contributing factor has been unrestrained wage and benefit growth in labor agreements, even during the Great Recession, and a plethora of arcane work rules that cost the agency tens of millions annually, Claypool said.
Despite the shortfalls and in the absence of funding that would allow it to implement more sweeping changes, CTA is making improvements to its infrastructure and safety to ensure that the customer experience remains a good one.
Two weeks ago, CTA announced a program called “Station Renewal” that involves the cleaning and repair of 100 rail stations over the next 12 months and last week, the agency unveiled the new LED signs that will bring Bus Tracker to 400 bus shelters across the city.
Claypool also announced in July that 50 new, full-time police officers will be patrolling the CTA in 2012 and that CTA is doubling the number of security cameras along the system from 1,500 to 3,000 by year’s end.
“As we work through the many challenges that exist today and that lay ahead, we know that mass transit can help create more jobs, stronger neighborhoods, improve property values and provide a better quality of life. It is imperative that we address the challenges before us so that the CTA remains a strong and vital part of our city and region,” Claypool said.
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