CTA President Releases 2008 Budget Recommendations

In announcing the CTA's proposed 2008 budget, Chicago Transit Authority President Ron Huberman said that unless the General Assembly reaches a transit funding solution, the CTA will have to institute deep service cuts, lay off employees and raise fares again in 2008. These actions, scheduled to take effect on January 6, are in addition to service cuts, fare increases and layoffs already scheduled for November 4th of this year.

?This budget lays out the current fiscal position of the CTA and the challenges associated with years of insufficient state funding," said Huberman. ?But what the budget does not do is tell the story of the hundreds of thousands of CTA riders and employees who will be put through great hardship if this budget becomes a reality. We at the CTA sincerely hope that we never have to implement this budget. We believe our state leaders are also aware of the harmful impact and that they will reach an agreement to provide new funding for the CTA before the budget takes effect. "

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 four 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.
• Although CTA employees did not receive wage increases in 2007, a pending union agreement would provide a three percent increase in 2008.
• Pension and healthcare reforms proposed by the CTA have not been approved by the General Assembly. Without them, the CTA will incur increasingly higher costs for providing these benefits.

Because additional funding has not been identified, the CTA has proposed eliminating 43 additional bus routes, laying off 1,799 additional employees and raising fares by at least 25 cents more in January. Starting next week, letters will be sent to employees whose jobs may be eliminated in January.

These actions are in addition to previously announced service reductions, fare increases and layoffs that are scheduled to take effect on November 4th if Springfield does not act. In addition, with 735 fewer buses operating due to the November and January route eliminations, CTA plans to close three of its eight garages. Service on the remaining routes will be provided by other locations.

Combined, the CTA has proposed eliminating 53 percent of all bus routes, for a total of 82 routes; laying off more than 2,400 employees including administrative and support staff; and implementing back-to-back fare increases. 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 have worked diligently with Springfield all year to create a long-term solution to CTA's structural funding deficit, but with no resolution yet, we are out of options," said Huberman. ?This is not something we want to do. We realize it will cause tremendous hardships for many people who rely on the CTA, but next year the CTA simply will not have sufficient funding to continue providing the same level of service as it does today."

CTA has grappled with a steep decline in inflation-adjusted funding levels. 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.

Huberman outlined a series of steps the CTA has already taken to reduce its costs and operate more efficiently including eliminating more than 75 administrative positions, deferring pay increases for non-union employees, restricting non-critical overtime and instituting a performance management program. The CTA and its unions have also agreed to an unprecedented 5-year contract?contingent on legislative action?that would enable the CTA to reduce costs and manage itself more like a business, while providing retirement and healthcare reforms to stabilize its retiree pension and healthcare costs. Not having these reforms in place yet is estimated to cost the CTA more than $11 million each month.

Huberman also announced the CTA's proposed five-year Capital Improvement Program (CIP). The proposed CIP 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.

CTA customers and the general public will have the opportunity to provide comments to the Chicago Transit Board on the President's 2008 Budget Recommendations at a public hearing at 6:00 p.m. November 5th at CTA Headquarters, 567 W. Lake Street, Chicago.

The Chicago Transit Board will consider the proposed budget at a November meeting. It will also be presented to the Cook County Board in November, as required by the RTA Act. 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.

Written and oral comments will be taken into consideration prior to Chicago Transit Board action. This input will be welcomed at the hearing or by correspondence addressed to Gregory P. Longhini, Assistant Secretary of the Board, Chicago Transit Authority, P.O. Box 7567, Chicago, Illinois 60680-7567. E-mail comments may be submitted through by writing to ctaboard@transitchicago.com. The deadline to submit comments is Tuesday, November 6, 2007.

The proposed budget is available for public review at the CTA's General Office, 567 W. Lake Street, Chicago, Illinois, 60661, second floor, weekdays between 8 a.m. and 4:30 p.m. Regular and large print copies are available at this location. Copies will also be available at the main office of the Regional Transportation Authority, reception desk, Suite 1550, 175 W. Jackson, Chicago, Illinois 60604. A copy of the proposed budget is also posted on the CTA's web site at www.transitchicago.com. Following is a list of libraries and additional locations where the document will be available.

Proposed 2008 CTA Budget

Proposed Fare Structure

Proposed Route Eliminations

Copies of the budget proposal will also be available at the reference desks of the following libraries:

Chicago Public Library - 3 Regional Locations

Harold Washington Public Library
400 S. State Street, 10th Floor
Chicago, IL 60605

Sulzer Regional Library
4455 N. Lincoln Avenue
Chicago, IL 60625

Woodson Regional Library
9525 S. Halsted Street
Chicago, IL 60628

Suburban Libraries

Evanston Public Library
1703 Orrington Avenue
Evanston, IL 60201

Evergreen Park Public Library
9400 S. Troy Avenue
Evergreen Park, IL 60805

Oak Park Public Library
834 Lake Street
Oak Park, IL 60301

Riverdale Public Library
208 W. 144th Street
Riverdale, IL 60827

Skokie Public Library
5215 W. Oakton Street
Skokie, IL 60077