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This just in… CTA accepts governor’s short-term bailout

Wednesday, Sep 12, 2007

* 1:05 pm - Is the governor’s “plan,” so breathlessly hyped by the TeeVee, a dud?

Chicago Transit Authority chairwoman Carole Brown says the agency still anticipates implementing service cuts and fare increases beginning Sunday.

Brown, along with Regional Transportation Authority chairman Jim Reilly, had been meeting with representatives from Governor Rod Blagojevich’s office to try to find away to delay the plan.

But after the meeting, Brown said the CTA still doesn’t have sufficient funding to avoid suspending 39 bus routes and raising fares by up to $1.

CTA officials plan a media availability shortly. I’ll try to post some details, but I have a family obligation so it would be nice if some commenters could help me monitor things. Thanks.

* 2:26 pm - From WBBM Radio

A source tells WBBM the governor is proposing is to give the CTA its full-year state subsidy of $24 million right now, instead of spreading it out over time. That would presumably allow the legislature time to come up with permanent funding

Immediately following the CTA board meeting Wednesday, Brown and CTA President Ron Huberman joined a conference call with the RTA’s legal team to discuss the proposal.

Brown said the deal proposed by Gov. Blagojevich would provide the CTA with enough money to operate for a few more weeks and would allow for lawmakers in Springfield to craft a transit funding deal.

Brown says CTA officials will meet with RTA leadership and that the legal review is necessary because the agency isn’t sure it can use the proposed money. Brown says her office plans on responding quickly to Blagojevich’s offer. […]

The CTA has already spent $3 million re-programming their equipment for the “doomsday” scenario.

[Hat tip to “GA Watcher” in comments.]

* 2:30 pm -
From the governor’s office…

– Governor Rod R. Blagojevich today will announce an immediate financial assistance package that will help the CTA and RTA avoid service cuts, fare hikes and employee lay-offs.

WHO: Governor Rod R. Blagojevich

WHAT: Governor Blagojevich will announce CTA financial assistance package.

CITY: Chicago, Illinois

WHERE: Governor’s Office James R. Thompson Center

TIME: 3:00 PM

* 2:32 pm - Tribune

“We are not sure it is something we can use,” Brown told the board. “We will have a response in short order.”

* 3:11 pm - They’re taking the cash. The Tribune has the details

The CTA’s top officials this afternoon accepted a short-term funding bailout proposed by Gov. Rod Blagojevich to avert fare increases and service cuts set to take effect Sunday and Monday, but the agency’s doomsday scenario will still take place in November unless new funds are obtained.

CTA Board Chairman Carole Brown announced the decision after meeting in Blagojevich’s Chicago office to discuss funding proposals. Before taking effect, the move needs to be green-lighted by the RTA in a meeting scheduled for Friday.

Brown said the plan will “give the legislature more time to craft a long-term funding solution for the region.”

* 3:27 pm - The governor just told reporters that he’s still working on a long-term solution for the CTA and the RTA.

There is a question about whether he can legally advance the CTA’s fare subsidy money, but when have those things ever stopped him?

* 3:32 pm - From the governor’s letter to the CTA and the RTA…

Though the General Assembly has not yet approved a state mass transit funding package, we’re working with lawmakers and believe such a resolution is not far off. In order to avoid the fare increases, lay-offs and service cuts your agencies vowed to implement by the end of this week, and to provide lawmakers more time to reach consensus on a long-term funding solution, I am offering to accelerate State funding to provide an immediate $37 million to the RTA this month, which will provide $24 million more for the CTA immediately.

In the budget passed by the General Assembly last month, $31 million of the $37 million RTA Fare Subsidy paid by the Illinois Department of Transportation is designated for the CTA; but only $7 million of the CTA’s portion is scheduled to be paid by December 31, 2007. By advancing the full fiscal year subsidy, the CTA will immediately receive the $7 million it is counting on for this calendar year, and an additional $24 million in funds to continue meeting the needs of commuters while the General Assembly finalizes and passes a longer-term funding plan.

The full letter is here.

- Posted by Rich Miller        

  1. - hmmmm - Wednesday, Sep 12, 07 @ 1:13 pm:

    Would they seriously reject short-term funding that would give Springfield more time to come up with a solution?

    Could they be that masochistic?

  2. - Fan of the Game - Wednesday, Sep 12, 07 @ 1:23 pm:

    I don’t think they are rejecting it. They are saying it isn’t enough in addition to the fact that it isn’t a long-term solution.

  3. - GA Watcher - Wednesday, Sep 12, 07 @ 1:33 pm:

    Here’s what WBBM Newsradio is reporting on its website re the Governor’s proposal (Please note the paragraph where “the agency” isn’t sure it can use the proposed money.):

    A source tells WBBM the governor is proposing is to give the CTA its full-year state subsidy of $24 million right now, instead of spreading it out over time. That would presumably allow the legislature time to come up with permanent funding

    Immediately following the CTA board meeting Wednesday, Brown and CTA President Ron Huberman joined a conference call with the RTA’s legal team to discuss the proposal.

    Brown said the deal proposed by Gov. Blagojevich would provide the CTA with enough money to operate for a few more weeks and would allow for lawmakers in Springfield to craft a transit funding deal.

    Brown says CTA officials will meet with RTA leadership and that the legal review is necessary because the agency isn’t sure it can use the proposed money. Brown says her office plans on responding quickly to Blagojevich’s offer.

    If the CTA does accept the plan it would not require CTA board action to implement it, instead the RTA board would have the ultimate sign-off on the measure. The RTA is scheduled to meet Friday.

  4. - hmmmm - Wednesday, Sep 12, 07 @ 1:39 pm:

    That 24 million would probably give them an extra month. I think this throws the ball back in the GA’s court.

    It gives them more time to pass Hamos’ bill? Or an alternate version?

  5. - A Citizen - Wednesday, Sep 12, 07 @ 2:03 pm:

    Gov may well figure out a way to again bend rules to advance $24 million, but again the “promise” is based on trust. Trust that the 12 month allotment of money will be renewed by additional funds. Three or four more weeks of status quo may well be followed by worse hardship than they are now facing. Trusting this governor is a very hazardous venture. One I would not be part of! Responsible legislators need to be allowed to evolve a lasting solution not one based on theatrics and PR.

  6. - Tom - Wednesday, Sep 12, 07 @ 2:23 pm:

    But what happens if the GA doesn’t pass anything which is likely given Blago’s opposition to a sales tax increase, Emil’s slavish devotion to all things Blago and the Republicans’ demand that RTA funding be tied to bridges and road money? Won’t this just exacerbate the CTA’s problems down the road? And at that point, it will have to cut 80 bus routes and raise fares by $2.

  7. - FED UP - Wednesday, Sep 12, 07 @ 2:23 pm:

    leave it to blago to play games with the timing of payments but not offer any real solutions. He is trying to look like he fixed the problem while offering nothing new. ELVIS would be disappointed in this fool.

  8. - A Citizen - Wednesday, Sep 12, 07 @ 2:37 pm:

    Pay me now OR pay me later - but probably not both.

  9. - Tom - Wednesday, Sep 12, 07 @ 2:42 pm:

    Is that the way Blago’s press releases normally come out? It’s like it was written by a 12 year old who is LD.

  10. - So Ill, who is now No Ill, but still Ill - Wednesday, Sep 12, 07 @ 2:52 pm:

    Why does the phrase “legal review” seem to show up after every single announcement by the Governor’s office?

  11. - Napoleon has left the building - Wednesday, Sep 12, 07 @ 2:55 pm:

    They won’t accept this. If they do, they will then make doomsday even worse if nothing happens next week. They would just be digging a deeper hole.

    As usual with the Governor, this is not a real solution to a real problem. He is proposing a smoke and mirrors solution. Why did he even seek the office of governor? he never seems to care about really solving problems!

  12. - pc - Wednesday, Sep 12, 07 @ 2:59 pm:

    Hey, I thought the governor was against payday loans. First we get a series of one-year bailouts, now we get one-month bailouts? Soon, we’ll be hanging on the governor’s word every morning to see if we can take buses today, or whether we’ll have to hitch rides again.

    This is definitely the most exciting (if not productive) way to run a transit system!

  13. - Rich Miller - Wednesday, Sep 12, 07 @ 3:03 pm:

    pc, nice blog. Could you send me an e-mail please? I want to send you something. Just use the “contact me” link at the top. Thanks.

  14. - The 'Broken Heart' of Rogers Park - Wednesday, Sep 12, 07 @ 3:17 pm:

    The drunken sailors got some money. Drinks are on the house.

  15. - jwscott72 - Wednesday, Sep 12, 07 @ 3:25 pm:

    Of course the CTA took the money. Can’t wait to see the glowing press release from the Governot Do No Wrong’s office. Anyone want to take odds that it contains a jab at Madigan and the House?

  16. - Carfree Chicago - Wednesday, Sep 12, 07 @ 3:26 pm:

    Two questions:

    What about Pace and Metra?

    And doesn’t this mean that the CTA would now be starting 2008 another $24 Million further in the hole if our inept leaders can’t find a solution?

  17. - Angry Chicagoan - Wednesday, Sep 12, 07 @ 3:33 pm:

    As Ann Richards always liked to say about GWBush, he’s reeeeeeel goooouud. Talk about slick.

    Barf up short-term operating funds from the state’s cash on hand.

    Realize the CTA would look ridiculous to turn them down.

    Transfer your vast and ever-growing turkey factor right on to the heads of the legislature with one turn of your publicist’s laser printer.

    Reeeeeel gooouuud indeed.

    Tom Cross is going to be reading and re-reading that Tribune editorial from the other day. I’m curious to see what Emil Jones will be up to.

  18. - Central Illinoisan - Wednesday, Sep 12, 07 @ 3:47 pm:

    I used to live in Chicago and I relied on mass transit. The CTA was very frustrating at times, but Rod put them in an impossible position. They had to accept the cash. If not Blago’s press release would have slammed them, and headlines would have read: “CTA Rejects Governor’s Bailout Offer”. However the GA and Gov have had all year to work on this, and have come up with nothing, so why should the CTA trust them to help avert a November doomsday?

  19. - Don't Worry, Be Happy - Wednesday, Sep 12, 07 @ 3:47 pm:

    This may sound good, but it’s really just short term borrowing. By speeding up the payment, the CTA is spending $24 million in the next couple of months that was intended to by used in their 2008 fiscal year. Their budget gap for next year just got bigger.

    While I do believe that there will eventually be a deal on this in Springfield, what if there isn’t? The CTA would need to make even deeper cuts in 2008 as a result.

  20. - Bluefish - Wednesday, Sep 12, 07 @ 3:58 pm:

    How dumb will CTA leadership look when the GA passes a regional sales tax increase, Blago vetoes it and Madigan and/or Jones refuse to call for the override in time? If this scenario plays out, nobody will take the November doomsday threat seriously even though with a $24 million hole on top of the $110 million plus hole CTA will be shutting a lot of service down.

    Side question - is this doomsday threat number 5 or 6? I’ve lost count.

  21. - Arthur Andersen - Wednesday, Sep 12, 07 @ 4:07 pm:

    This “solution” makes about as much sense as giving your kid a year’s worth of allowance in January and being surprised when he runs out of dough in August.

  22. - CaseyJones - Wednesday, Sep 12, 07 @ 4:15 pm:

    This is the funniest move yet.
    First he fails to mention RTA in the big budget baloney blowout.
    Then he threatens to veto the bill.

    Then he holds four house Dems captive by threatening their kinfolk’s jobs.

    And THEN he writes the following:
    Though the General Assembly has not yet approved a state mass transit funding package, we’re working with lawmakers and believe such a resolution is not far off.

    Can it now be said that BlunderBoyBlaggo is truly nutso?

  23. - Tidy Bowl Man - Wednesday, Sep 12, 07 @ 4:19 pm:

    One more problem solved. Is there a need for session Monday and Tuesday now? Who needs legislative approval anyway.

  24. - Green Line - Wednesday, Sep 12, 07 @ 4:37 pm:

    We know he can PROMISE the money, but can he DELIVER the money. That is the question.

  25. - Little Egypt - Wednesday, Sep 12, 07 @ 4:41 pm:

    I used to work for a nut case who had a ready, shoot, aim mentality. It got her into a lot of trouble making really bad decisions and having to find a way out of her own messes. She usually lied her way out of it and, in fact, was such a pathological liar that she could never remember what she said, when, and to whom. Sound like anyone else we know?

  26. - What's in a name? - Wednesday, Sep 12, 07 @ 4:46 pm:

    Now it’s clear to me. I confess for months I have thought Blago was an idiot. How wrong. How unfair. Now his plan is becoming clear. Who needs a legislature. All those lowly, self-absorbed Senators and Representatives with their high salaries and costly offices. Think of the savings when Blago’s Grand Plan comes into full bloom. The man is a genius. His leadership will no doubt become the stuff of history, emulated by governors and presidents everywhere. To think, we were here when it all began. Talk about your front row to history.

    With the legislature out of the way, the Great Blago will no doubt turn to the judiciary. Judges and Justices will become employees of the executive branch serving at the pleasure of the Great Blago. Imagine some lowly judge declaring any act of the Great Blago unconstitutional, said judge would be summarily fired on the grounds of treason.

    No messy checks and balances, just efficient, enlightened governing.

    It’s getting clearer still. We know the Great Blago is on God’s side (just ask him). Since he knows the will of God, is there any good reason to continue the archaic concept of Separation of Church and State? I think not.

    Soon there will be the Church of the Great Blago; how long until he does away with elections? He will govern by Devine Right.

    In due time he will make the Great Revelation, he is himself a deity. Hence forth he will be addressed “O Great and Mighty Blago, our Lord, Provider and Savior.”

    Yeah, I see it now.

  27. - The 'Broken Heart' of Rogers Park - Wednesday, Sep 12, 07 @ 4:55 pm:

    AA said…> This “solution” makes about as much sense as giving your kid a year’s worth of allowance in January and being surprised when he runs out of dough in August.

    That’s 7 months too generous.

  28. - A Citizen - Wednesday, Sep 12, 07 @ 5:14 pm:

    We are going to need to rename our state after blago gets done from Illinois to Phoenix, as it will then need to rise from the ashes. Madagin should sue gov for overtime parking in the gov’s office. That office is for a real leader.

  29. - Cassandra - Wednesday, Sep 12, 07 @ 5:20 pm:

    I think we all knew up here that somehow, some way
    the CTA was going to be running as per usual next week. The drama just lasted a little longer this year. The patronage porkers can go back to dozing at CTA admin.

    I don’t care when they get their money, but I do care about Julie Hamos having more time to work at raising my taxes.

    Of course, I have more time to write to my legislators about the plan in the works to take more of my money via that sales tax. The liberal Ms. Hamos seems to have conveniently forgotten that sales taxes are regressive. Or perhaps she thinks everybody in the Greater Chicago suburbs is rich so they won’t care. We know she’s rich (she’s a state legislator) so I’m sure she doesn’t mind.

  30. - See Tea Eh - Wednesday, Sep 12, 07 @ 5:54 pm:

    It’s one thing for the money to run out in pleasant fall weather, quite enough to chop services when the cold and snow hit. Just another temporary patch is not good enough, and when this patch lets go, any goodwill and positive impression the up-front bailout created will switch to even greater howls for blood in the cold Chicago winter. Why can’t we just fix it NOW.

  31. - Equal Protection - Wednesday, Sep 12, 07 @ 6:19 pm:

    Am I imagining things; or does this scheme not violate the Equal Protection clause under the 14th Amendment to the U.S. Constitution by discriminating against PACE and METRA ridership by providing a benefit to riders of the CTA, which is not also provided to riders of the other two transit agencies; resulting in discrimination based on geography, and favoring Chicago commuters over suburbanites?

    In addition what about the discriminatory benefit of providing accelarated cash flow to an organization which provides transportation services, while precluding that same benefit from being available to the hospitals, nurising homes, pharmacists and doctors that provide health care benefits to the poor through reimbursements under the Medicaid Program? It would be interesting to know what the Illinois State Medical Society thinks about this accelrated transit spending payment program, considering the delayed payment cycle that the nursing homes, hospitals, and physicians are required to finance.

    What if; for example, the Governor elected to accelarate the Medicaid reimbursement cycle to provide full annual projected payments to Chicago based hospitals, but left the never ending payment cycle in place in the suburbs. Would this withstand the scrutiny of the courts.? Why then would transit agencies be treated any differently?

    Assuming the monies purported to be disbursed under this scheme are within a treasury held fund; wouldn’t this disbursement require submission of a voucher to; and authorization of payment by the Comptroller’s office before these monies could be disbursed to the CTA?

    HAs all the monies appropriated by the proposed budget been collected already in order to allow for their disbursement? Has a BIMP Act also been passed that would allow the disbursement of these funds, as opposed to the BIMP which has not yet been passed for the education budget?

    On its face; it would seem that there is a host of prospective problems associated with this financing scheme which could result in a myriad of problems that liken this PR stunt to the previous attempt to secure flu vacine.

    How likely is this to be accomplished before the wheels fall off of the bus at the CTA?

  32. - Rich Miller - Wednesday, Sep 12, 07 @ 6:50 pm:

    EP, did you read that stuff? Some of that money is going to Pace.

    As far as the rest of it goes, you have a good point.

  33. - michael k - Wednesday, Sep 12, 07 @ 6:53 pm:

    Equal Protection, do some better reading. The money is going to the RTA, of which the lion’s share of the amount is dedicated to the CTA per the splitting of funds already a part of Illinois State Law.

    SB572 aims to recalculate that split, however, that’s not law yet.

    Metra isn’t hurting (this year) but is postponing capital improvements. Pace and CTA are taking a hard hit, but CTA gives something like 80% of the rides in the region and gets less than that amount in funding.

    But no worries, Pace is getting theirs.

  34. - Rich Miller - Wednesday, Sep 12, 07 @ 7:16 pm:

    I don’t think I’ve ever seen an issue on this blog where the majority of opponents were so consistently wrong about so many basic facts.

    There is a knee-jerk reaction against more money for transit that makes some people lose all sense of proportion and prompts them to ignore reality. It’s truly bizarre.

    Somebody mentioned Los Angeles on another thread today, as if LA’s transit system is something we should emulate in our own metro region. That’s just nuts.

    St. Louis was also mentioned. They have one little train line, which is nice if you’re going to the East St. Louis casino from the airport, but not much else. And the buses are ridiculous.

    People complain about their gas price increases, ignoring the relatively recent CTA fare hikes, and the fact that it’s not so much the money for many riders, but the schedule which is so all-important.

    Driving commuters complain about public subsidies, as if the American fleet in the Persian Gulf and over a hundred thousand troops in the Middle East, not to mention ethanol, billions in tax breaks for oil companies, etc. don’t exist.

    And on, and on, and on. Let’s have a referendum, some have written. We did. It’s called an election. If the unions accepted the givebacks, then it’s not enough, somebody wrote. Nothing is ever enough for some people.

    Look, I live in Downstate. I’d have to walk two miles to get to a bus, which doesn’t run on weekends or nights. Yet, I am not going to begrudge the metro region a tax hike on itself, that the city council will have to partially approve (transfer tax) in order to keep a vital public service operating.

  35. - here are "basic facts" - Wednesday, Sep 12, 07 @ 8:07 pm:

    Rich Miller - Wednesday, Sep 12, 07 @ 7:16 pm: “St. Louis was also mentioned. They have one little train line, which is nice if you’re going to the East St. Louis casino from the airport, but not much else.”

    The original line now runs to Scott AFB. The line is convenient for those in Fairview Heights, Belleville, etc.

    The OTHER line (Shrewsbury - Lansdowne I-44) runs to the south (near Zoo, Forest Park, Galleria, Whole Foods, Trader Joes, etc).

  36. - Transit Geek - Wednesday, Sep 12, 07 @ 8:16 pm:

    Hey Miller– I’m with you on almost all of your last comment except the part about the election (ie representation) being the equivalent of a referendum. Careful there, that’s the argument that “No Tax Blago” uses to justify his threat to veto. Also, that logic doesn’t post-up to the vote in the house last week either– they were elected and they voted. Other than that, the rest was right on.

  37. - Cassandra - Wednesday, Sep 12, 07 @ 8:31 pm:

    I’m not opposed to giving them more money, I just think it should be done without raising my taxes.

    In general, I think that when we elect a governor
    we in essence are saying go ahead and implement your priorities. Blago has been consistent about not raising income or sales tax, and I appreciate that. The state has a lot of extra money to spend via natural revenue growth and the money for the CTA can be found without additional taxes for a tax-burdened suburban population.

  38. - Larry Mullholland - Wednesday, Sep 12, 07 @ 8:35 pm:

    How many “Bail Outs” can there be before you start have to change the term? I have been hearing about bailing out Chicago transit for years and years. I am curious if wages in the area have increased at the same pace at CTA rate increases. I do not have the numbers but I would suggest that the prices increases are not even close to the wage increases in the area.

    I would have to argue that a .50 cent rate increase does not seem unreasonable for an organization run as CTA has historically been operated. (poorly)

    A commenter suggested earlier that the CTA now operates in the black…does that count previous wads of cash thrown at the CTA? Is it too much to ask for fees to keep up with inflation and wage increases so as not to burden the state budget over and over and over again? I think not.

  39. - carfree chicago - Wednesday, Sep 12, 07 @ 8:43 pm:

    Rich — Thank you for defending reason! The misinformation is one of the greatest obstacles.

  40. - OneMan - Wednesday, Sep 12, 07 @ 8:56 pm:

    Casandra.. ‘I think that when we elect a governor
    we in essence are saying go ahead and implement your priorities’.

    No that is what you elect a dictator to do.

    I don’t even mind the idea of my sales taxes going up to help mass transit.

    However the governors solution is a bit like saying I make 50K a year and need 60K, so if I get all of my 50K now I can bank on getting a raise.

  41. - Disgusted - Wednesday, Sep 12, 07 @ 8:57 pm:

    I just love how the millions and millions of dollars figures just roll of the administration’s collective tongues. To listen to these press releases, you would think the state is in the black, all bills paid and this is just a little something extra they’ve found for Chicago area transit companies. What if it doesn’t come to fruition?? What about the other business floundering in this state, some of which are in that condition because the state isn’t paying its bills. It’s only a matter of time until medical providers retain an attorney. Did someone whisper recession????

  42. - See Tea Eh - Wednesday, Sep 12, 07 @ 9:06 pm:

    What I was expecting the governor to say today was that he was going to bail out the CTA by giving all their employees free health care.

    Because we got money to burn for health care.

    For people to get to their jobs so they can pay the taxes that pay for the health care, not so much.

  43. - A Citizen - Wednesday, Sep 12, 07 @ 9:28 pm:

    I’ve really lost track of this money thing. Are we spending our children’s money, grandchildren’s, or are we into our great grandchildren’s? Boy! Are they going to be pissed!

  44. - Angry Chicagoan - Wednesday, Sep 12, 07 @ 9:52 pm:

    To all the anti-transit posters on this thread, your comments center on money and taxes, and so you have got to realize that Illinois’ tax base and tax rates — despite what it may seem like when you get your property tax bill — are anorexic by Midwestern standards. In fact, we bring in less state and local tax per capita than Alabama. Think about that, and think about what the cost of living is here compared to Alabama.

    I recall a line given in an interview by the conservative British poet Philip Larkin — a big admirer of Margaret Thatcher. “Oh, I adore Mrs. Thatcher,” he said, going on to say that at last, there was a prime minister who recognized “that if you want something, you’ve got to pay for it.”

    And there, in a nutshell, is the direction sign to the key disconnect of American conservatism on money. You want government but you DON’T want to pay for it, and you think the costs can always be offloaded on someone else. And when conservative politicians here actually try to get everyone to pay for what they want in the traditional fashion (e.g. Reagan raising FICA contributions to put the security back into Social Security, or Bush I raising taxes when he’d promised not to in order to satisfy bigger goals of deficit reduction and lower interest rates), you scream bloody murder.

    The single most destructive aspect of this governor is his no new taxes pledge. In a state with high spending it might be a different story, but at the other end of the spending league table that we inhabit, it is ruining public services and public facilities and public finances — and building up huge trouble for the future. Anyone who endorses this situation is not only hurting our quality of life but also endorsing theft from their children and grandchildren as far as I am concerned.

  45. - A Citizen - Wednesday, Sep 12, 07 @ 10:02 pm:

    “…And there, in a nutshell, is the direction sign to the key disconnect of American conservatism on money. You want government but you DON’T want to pay for it,…” But there is the issue! WE DON’T Want your definition of government! No Nanny State, just the real basic government the founders prescribed! Your tax and spend formula will bankrupt me, my children, grand children etc. and that will make them subservient to the government. Unacceptable!

  46. - 312 - Wednesday, Sep 12, 07 @ 10:08 pm:

    can you say ‘payday loan’

    Not vert positve…

  47. - Equal Protection - Wednesday, Sep 12, 07 @ 10:30 pm:


    With all due respect; simply because someone may be less versed in the nuances of state finance, this does not automatically render them inattentive or ill-informed. (some of us have to work at it).

    I did read the material; at least that which was initially posted here. Based on what I read there is nothing explicit as to the disbursement of funds to PACE and to METRA, and this “Agreement” only makes mention of the CTA as a recipient of the funds to be disbursed now.

    Here is the language excerpted directly from the letter from the Governor to the Chairman of the CTA and the Chairman of the RTA, linked in this topic, along with some editorial commentary inter-spersed, (just because).

    The direct language is within the arrows.
    Note that the letter does not include the Chariman of the PACE Board, or the METRA Board as direct recipients. Why not?

    If this is an agreement to accelrate mass transit funding fare subsidy monies, why wouldn’t they be recipients of the communication and a party to the “Agreement” as well?


    No mention of PACE or METRA here yet.


    So the DOT advances $37MM to the RTA, and the RTA turns around and gives the CTA $31MM, and retains $6MM. Does the Agreement direct the RTA to disburse the remaining $6MM?

    Does the Agreement direct the RTA to disburse the remainiing $6MM on the pre-determined fare subsidy formula, as the budget legislation dictates?

    Does the agreement instead allow the RTA the discretion to say; “well let’s see, PACE seems to need more money right now than METRA, so we’ll give the full $6MM to PACE, now and we’ll await the “permanent funding plan” and give METRA their share of what we are giving to PACE now, once that funding program has been adopted?

    Now what if that never happens…….ooops, sorry METRA.

    Alternatively; what if the Agreement says that, “while we will release this money to you (Reilly-RTA) today, and authorize you to release the full amount to the CTA this week to forestall the implementation of their cuts this Sunday.

    The PACE proposed cuts are not supposed to happen for some time yet to come, so we want you to sit on their portion of the monies now while we continue to work this out. If you must release something to PACE and METRA, you are only authorized to release to them only that portion that would otherwise have been received in this calendar year (23% of the pro rated amount to each agency) with the balance to them to be deferred until a final transit funding bill is signed into law?

    If the “Agreement” included a disbursement formula with these other two agencies, then why would they not be included in the letter, which specifically outlines how the CTA’s portion was being handled?

    Should one just assume that the State and the RTA will do the right thing; or would it be better to get an MOU? Why no mention of PACE or METRA as being on the conference call in the Governor’s office hashing out this deal? Seems rather suspicious to me.

    Aside from that aspect however, it also looks to me like 23% of the total CTA fare subsidy is due in the first half of the fiscal year, and a balloon payment of 77% of the total CTA fare subsidy is not due from the state until the second half of the fiscal year, but I digress.

    Assuming that this original structure is designed to manager the cash in/cash out liquidity of the state one (I) would assume that this is done because the revenue source which funds this fare subsidy does not begin to generate sufficient incremental funding until after January 1st.

    Does the Governor have the discretionary spending authority then to simply accelerate the payment process; and spend money that has been apprpriated now, even though the state may not have the money to do so, because it has not yet been collected?

    Wouldn’t the Comptroller have to approve this voucher? How can the Comptroller approve this accelerated spending if the money from the designated revenue source has not yet been collected?


  48. - A Citizen - Wednesday, Sep 12, 07 @ 10:38 pm:

    - Equal Protection -
    You just don’t unnerstan. You see it’s really magic! You have these three half walnut shells and just one pea . . . or we can do the three card monty thing - samo samo! It’s not real money, just numbers on a bill or exec order or ?

  49. - Wumpus - Wednesday, Sep 12, 07 @ 10:41 pm:

    So no solution, another gimmick is what we get. The gov said “Don’t look a gift horse in the mouth”. I think they are looking at the worng end of the horse, Gov.

  50. - A Citizen - Wednesday, Sep 12, 07 @ 10:49 pm:

    - Wumpus -
    I think the gov IS the wrong end of the horse.

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