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Grand plan or recipe for disaster?

Tuesday, Oct 30, 2007

* Senate support for the transit bailout bill may be waning. From the Trib

If the [transit bailout] package does not pass the House on Friday, Madigan said he plans to call it again for a vote Monday. Madigan predicted that the bill would be approved in the House and suggested that there is a “high level of support” for the sales-tax plan in the Senate.

“I think more people in the House and Senate have come to realize that this is a good, solid bill that ought to pass,” he said.

* Madigan claimed that everybody except Rod Blagojevich was on board with the negotiated bailout plan…

“Again, with one exception, there’s been no criticism of the bill,” Madigan said.

* Maybe not

Senate Republican Leader Frank Watson sent a letter Monday to Regional Transportation Authority Chairman Jim Reilly saying that a tax increase, by itself, is a poor solution.

“A tax increase is NOT the only answer,” Watson wrote. “It is a disservice to everyone to present the current situation as a tax increase — or transit meltdown. There are alternatives that to date have only received lip service.”

* And what are those alternatives? From the Daily Herald…

Watson proposes fare hikes to raise part of the cash.

* Meanwhile, Peter DeFazio, who chairs the US House Highways and Transit Subcommittee was in Chicago yesterday and had some harsh words….

“There will be no Chicago transit system upon which to build, if the Legislature and the governor don’t get their act together, plain and simple. From what I understand, they’re looking at catastrophic cuts here, and when you make catastophic cuts to a transportation system, things happen that take years, if ever, to turn around.”

* And the threats piled up

[CTA President Ron Huberman] estimates the CTA will lose 100,000 riders a day due to the fare hikes and service cuts. […]

[DePaul University traffic expert] Joseph Schweiterman said “We’re going to see a bit of a crush on … the highways. There’s going to be demand for taxicabs and it could throw traffic enough that we’re all going to feel the pain. This is really going to be a tough time.”

* And Mayor Daley minced no words

“To me, it’s pretty clear,” Daley said Monday at a separate event. “Either [the governor and the General Assembly] support public transit or they don’t. This is do-or-die time.”

That was a joke, of course. Daley has been the Prince of Mince during this debate.

* The Trib gets out its Mike Madigan decoder ring

House Speaker Michael Madigan made one of his trademark chess moves Monday, a smallish gesture with big implications for mass transit, casino expansion and capital spending to refurbish the state’s infrastructure. Our hunch is that Madigan has his eye on big prizes: stylish legislative outcomes that would finally — finally — break the impasse with Senate President Emil Jones and Gov. Rod Blagojevich. Or make them wear the jacket for failure. […]

The political intrigue on Monday tended to overshadow Madigan’s proposal. With Chicago Transit Authority service cutbacks scheduled for the weekend, is Madigan positioning himself as the lone grown-up, the leader who fashions the grand compromise that Jones and Blagojevich cannot? In this scenario, Madigan cobbles together a veto-proof bloc of urban House members (who get transit funding from a small regional sales tax) and Downstate members (who get capital spending on roads and schools). Broadly expanded gambling (with more muscular state oversight from a new and improved Gaming Board) ostensibly helps pay the bills.

Madigan could hand this mega-package to the Senate and head home, essentially forcing Jones and Blagojevich to capitulate — or answer to all those citizens who will be infuriated by Springfield’s failure to solve the CTA’s problems.

* As does the Daily Herald

Monday’s proposal by Madigan could be seen either as a promise to Cross that Madigan will deal with casinos after a transit bill is passed, or the exact opposite: a poison pill to kill any new casinos.

* But, as always, there’s a big catch to Madigan’s Gaming Board reform proposal…

From a timing perspective, Madigan’s proposal would further delay attempts to put a statewide construction program on a fast track. In order for the gambling expansion to move forward, the state would have to first identify and approve the new members of the gaming board, as well as hire a new enforcement guru and staff.

- Posted by Rich Miller        

  1. - Carl Nyberg - Tuesday, Oct 30, 07 @ 10:02 am:

    When was the last time there was a tax hike to support the RTA, including the CTA?

    What were fares at that point?

    How many times have riders had fare increases without matching tax increases?

    It doesn’t seem like a tax increase should automatically trigger a fare increase since fare increases haven’t automatically triggered tax increases.

    Correct me if I’m wrong, but isn’t it still public policy to encourage people to use public transportation to relieve congestion, reduce pollution and minimize consumption of petroleum?

  2. - Ghost - Tuesday, Oct 30, 07 @ 10:06 am:

    The difference between madigan and Blago is Madigan puts pen to paper and pushes out bills. Blago talks about need, but rarely puts forward a bill to accomplish what he is touting. Thus Madigan brings real pressure down by forcing action on Bills, and the gov seems to rant ineffectualy about his beautiful new clothes.

  3. - Ghost - Tuesday, Oct 30, 07 @ 10:08 am:

    I should add a rise in fares is both needed and fair (fare for the PUNdits). The rates have been unrealalistically flat. The proposed increase is no where near the cost of a taxi cab ride, so unless routes are removed, I doubt their will be defections. Even with higher prices its still the cheapest game in town.

  4. - Cassandra - Tuesday, Oct 30, 07 @ 10:31 am:

    The CTA and its Democratic supporters are doing a good job of bargaining so far. No plans to get rid of a single one of the thousands of politically
    connected hacks working for the CTA, many of them at its luxurious (and luxuriously furnished) headquarters. Many of them are probably like
    so many state employees…eligible for retirement but can’t be bothered, they have so few job duties.

    No fare increase, not even small ones. No elimination or reduction of service on very low
    traffic routes. And do we really need three or four CTA employees (and, often, at my Oak Park Green Line stop, their kids and friends) staffing the ticket booths…the ones that don’t sell tickets. Sometimes I can barely get to the turnstile through the party.

    And where is Julie Hamos, that supposed champion of the poor and, occasionally, even the middle class, coming from with a sales tax increase, Doesn’t she know sales taxes are regressive. Of course she does. Democrats drop their concerns for the economically disadvantaged like the proverbial hot potato when they[ve decided that it’s for our own good.

  5. - Greg - Tuesday, Oct 30, 07 @ 10:35 am:

    This is a bit of a random thought, but it would help RTA riders absorb any fare increases if the cap on monthly tax-deductible transit expenses was raised. I believe it’s currently around $110 (?), which falls under many monthly Metra costs, and soon CTA costs, too, if those fares rise.

  6. - DC - Tuesday, Oct 30, 07 @ 10:35 am:

    What truly should happen in this issue is that the legislature should remove itself as the final approver of tax increases for Cook and metro county transportation issues. County governments should be responsible and accountable for funding these services — and if they vote to increase taxes and fares, so be it, but without addding the political volleyball of including the General Assembly. I would concede that the State should appropriate money to support public transportation, but micromanaging the day-to-day operations is beyond what the GA should be doing.

    If county and city officials want to push tax hikes to the voters, then let them stand up and do it without being able to blame the legislature for their failure to sufficiently fund what is essentially a local service for local residents.

  7. - plutocrat03 - Tuesday, Oct 30, 07 @ 11:00 am:

    The doomsaysers are out predictiong the end of civilzation as we know it if we do not take money from everyone to serve the needs of the mass transit using minority.

    Where did the talking heads get the idea that transportation costs for mass transit users are to be kept frozen in these days of massive cost increases in benefit costs and fuel costs?

    While there are benefits to mass transportation, one must consider that many do not have, nor ever will have decent public transportation to them. Why should they provide an unending subsidy for those who have that option.

    It is time to work toward the goal of increasing the rider’s share of the operating costs from the current level which is below 50% toward 75%. For those who will cry about the increases, have these agencies do what private industry has to do when faced with rising costs, spend less and pass the saving to the riders who benefit from the services.

    We could actually achieve a bit of social engineering here by having a voluntary migration of workers to live nearer to where they work, thus helping themselves and the environment in the process.

  8. - wordslinger - Tuesday, Oct 30, 07 @ 11:04 am:

    I ride the CTA every day. I’m fortunate to have the option and income to drive if need be. But believe me, a majority of riders aren’t that lucky. It’s a lifeline to work, school — everything.

    The state pours billions every year into fixing Illinois’ inferior asphalt-paved roads (thank you, Mr. Cellini). Greater state support for the green option of mass transit is good for everyone.

    Having said that, I would be a happier supporter if the CTA would eliminate the no-work employees who man the old token booths. The CTA has been fully automated for many years now. Those employees have no function and do nothing all day long. The last few days, a SECOND CTA employee has been at my stop passing out fliers in support of added funding. Couldn’t the employee who mans the booth all day do that?

  9. - Truthful James - Tuesday, Oct 30, 07 @ 11:04 am:

    Follow up. There should be a fare increase of some number. I likened it to the cost of a pack of cigarettes foregone per day. That will cover transit users, with gasoline taxes and parking covering the remainder.

    I still believe that the monopoly must be broken. If the CTA/PACE cuts a route, allow private enterprise to operate it. If CTA/PACE wants it back they should buy it back.

    My left field pitch is and always will be to have the bus drivers lease route schedules from CTA/PACE system by bidding. Positve numbers for the higher usage route schedules; subsidies for the unprofitable ones. Winners are the highest bidders/lowest subsidies. CTA/PACE provides maintenance and inspectors to make sure that the schedules are being kept.

    Jitney cabs are legalized as well.

    There are so many ways to improve public transit

  10. - plutocrat03 - Tuesday, Oct 30, 07 @ 11:07 am:

    Sorry, fogot to add one more point

    To those who are forecasting a mass exodus from the CTA and an increase in traffic and and taxi cab use etc. Balderdash.

    All of the alternate means of transportation are far more expensive than using mass transit. Mainly because the puvlic subsidies are not there. If the users bolt to other means of transport, they will return because subsidised mass transit is still cheaper than any othe means of transportation.

    They will then learn what a bargain they have and perhaps even appreciate the subsidy they have been enjoying all these years.

  11. - Leroy - Tuesday, Oct 30, 07 @ 11:14 am:

    Fares on the CTA should be indexed to the price of a gallon of gas.

  12. - Anonymous Lawyer - Tuesday, Oct 30, 07 @ 11:27 am:

    1) The CTA is a public service that needs to be subsidized, like the police, the firefighters, the airports, the streets and sanitations dep’t, and so on. In our current situation, privitization is a hardly a solution. It keeps cars off the roads, enables the poor and rich alike to get around, keeps our air cleaner, and is a key difference between Chicago being a “world-class” city and a Midwestern also-ran (density + transit = strong urban neighborhood development; take one of those away and you’re in big trouble).

    2) I don’t mind modest scheduled fare increases to supplement operating funds IF the state subsidizes the capital budget and still provides an adequate stream to cover the remaining operating costs. I don’t think most riders would object to that. Creative people could find a way to mitigate the effect on poorer riders. (Transit tax benefit won’t quite do that for the poor who mostly deal in cash.)

    3) The CTA may be a bureaucratic agency, but it has made many cuts under Huberman’s stead, improved service modestly by spending in the right areas, and has brokered a deal with the unions to save millions on the biggest money suck in its budget — pension costs. (Savings that are being left on the table every month because the state legislature sucks.) It’s not perfect but it’s progress — all of you who would cut every tax that doesn’t serve you personally need to grow up. If you don’t want to live in a place that provides public services and a thriving urban business and residential community, then move to Indianapolis and you can pay far less in taxes there.

  13. - PCC - Tuesday, Oct 30, 07 @ 11:30 am:

    As I’ve said before, “according to AAA’s annual cost-per-mile estimates, the real cost of driving has declined 9.9% since 1998 (adjusted for inflation). Meanwhile, as of next week, cash CTA fares will have increased 59.6%. We riders are already paying far more than our share.” Even going back to 1986, CTA fares have outpaced inflation — hardly a way to encourage people to use public transit. (Yes, public transit is a good thing. It promotes clean air and water, saves farmland from urban sprawl, curbs our thirst for oil imported from unstable dictators, increases regional economic productivity, raises regional property values, etc.)

    Besides, the truly scary bit isn’t fare hikes, it’s service cuts. 308,262 people a day ride the bus routes that CTA is going to cut by January. 308,262 people will have to rearrange their lives. You worried about how people would get around the collapsed I-35W bridge in Minneapolis? That only affected 140,000 cars a day. We’re talking TWICE as many people here. Even the Kennedy moves fewer than 300,000 passengers a day.

    No mass transit system anywhere in the country garners 75% of its revenues from fares.* That’s a fact of life. No public school anywhere in the country pays 75% of its costs from bake sales, either. And another thing: I have been using the system regularly (not daily) for ten years, and I have never seen the overstaffing that people always talk about in these blog comments. Six employees at one station? I’m lucky to find one most of the time.

    * Not the USA, but Toronto has a farebox recovery ratio of around 80%. Then again, it can cost $20 in tolls to drive across Toronto, too, and gas costs $3.75 a gallon.

  14. - Truthful James - Tuesday, Oct 30, 07 @ 11:34 am:

    Privatize public transportation wherever you can.

  15. - Kuz - Tuesday, Oct 30, 07 @ 11:36 am:

    Our 50% fare recovery rate is already much higher than other states, and Carl is right - we’ve had plenty of fare hikes this decade, with not a single tax increase.

    Transit is a public service that reduces congestion and pollution, and allows for enough density in the city so our economy can actually sustain this large of a population. No ‘L’ + no bus = no Loop. Believe it.

    Comments about marginal cost (cabs are more expensive, so people will not switch) are just ludicrous. We want MORE riders, not fewer. We WANT kids to take bus/train, not have to be driven every day to school. We WANT seniors to not spend their fixed incomes on higher fares.

    1/4 cent tax = $5 more for your $2,000 plasma HDTV.

  16. - Greg - Tuesday, Oct 30, 07 @ 11:39 am:

    Um, privatizing the CTA doesn’t make sense, as the whole concept obviously prices the service differently than the market would (eg, bussing in poor workers, like delivering mail to Barrow, is not going to make you a profit.) So if you privatize, the result looks much different.

    I’m also confused why you would index fares by the price of gas. The airlines certainly don’t, and they have way higher fuel exposure.

  17. - zatoichi - Tuesday, Oct 30, 07 @ 11:43 am:

    Gas costs $3 a gallon. I use 2 gallons a day driving to work because of delays plus about $8 to park and $1.50 in tolls. That’s $15.50 to get to/from work. CTA goes up $1 a ride. Looks like a deal to me. Didn’t minimum wage just go up to handle this kind of increased cost?

  18. - Carl Nyberg - Tuesday, Oct 30, 07 @ 11:53 am:

    Fares have gone up. Anybody who says fares haven’t gone up is disqualifying herself/himself from the conversation.

    For people whining about all the gas they have to buy commuting… You made a choice about where to live, a choice about where to work and a choice about what kind of car you bought.

    There may be some people driving fuel efficient small cars who are commuting long distances because of circumstances outside their control.

    But, by and large, people who drive don’t but fuel efficient cars and many of them choose to live a long distance from where they work.

    These people who make bad lifestyle choices get grumpy for spending a bunch of windshield time commuting.

    But grumpiness isn’t a terribly good basis for public policy.

  19. - Kuz - Tuesday, Oct 30, 07 @ 11:55 am:

    @zatoichi - of course it’s more expensive to drive, because drivers can go wherever they want whenever they want and don’t have to walk anywhere. There should be a premium for that kind of convenience because while it is a big benefit for the driver, it imposes costs on other people in the form of traffic, pollution, land usage, etc.

    Externalities, people! They’re not just for economists anymore!

  20. - Kuz - Tuesday, Oct 30, 07 @ 11:57 am:

    Re: price index - actually, if you wanted to influence fuel prices, you’d decrease transit prices when gas prices go up, right? That way, more people take transit, demand for gas declines, then prices go down.

  21. - DC - Tuesday, Oct 30, 07 @ 12:13 pm:

    Kuz’s idea would work if public transportation services were not a hog at the tax trough but were rather left to market/capitalism forces — the kind of forces that make privitized services more efficient and stable without relying on boogers from Blagojevich to eat.

    Carl says that grumpiness is not a good basis for public policy. Whew! Look out Mayor Daley… Should policy makers only pass policies when they’re happy? What a uptopia this would be. I can almost see Speaker Madigan smiling at the Governor and shaking his hand profusely in sheer euphoria. I thought Montgomery County MD was an asylum for liberal doo-gooders — Carl’s version of non-grumpiness would make folks out here seem like cynics. I pray it happens, but until then, I’ll watch, read and type a little in hopes that realism still has a chance.

  22. - Kuz - Tuesday, Oct 30, 07 @ 12:20 pm:

    DC - Please give a link to an example of privatized public transit. Anywhere in the world will do. Thanks.

  23. - Greg - Tuesday, Oct 30, 07 @ 12:21 pm:


    I’m glad people are thinking about markets. I’m certainly a market-based fanatic. But in this case, I’d say the CTA ranks near the bottom of govt services that we’d want to privatize. A for-profit CTA would look entirely different than what comes to mind when most of us think “public transportation.” Maybe that’s what you want; I don’t know. But I’d focus on getting govt out of the obvious things first–the things that the market can actually price without angering so much of the public.

  24. - Transit Supporter - Tuesday, Oct 30, 07 @ 12:23 pm:

    The regional sales tax for transit operations was last raised in 1983. There have been numerous fare increases in the interim. The CTA’s last was in 2005. The transit agencies have a 50% recovery ratio requirement - which means, collectively, they must produce 50% of their costs from system-generated revenue (fares, advertising, leases, etc) Some items (security, etc) are excluded. This requirement ensures regular fare increases - as the transit agencies get more money, they are require to raise more money from the farebox.

    Yes, fare increases should be part of the mix and will be - by existing law. To point to fares now, at the 11th hour, is yet another false onjection that opponents have raised to not deal with the issue.

    The Auditor General specifically stated publicly that doubling fares would not address the structural problem. His words - not the transit agencies.

    End the delay. First the GA wanted an audit. They got it. Then the GA wanted a CTA pension fix -they got it. Then they wanted only RTA area taxpayers to foot the bill - they got it. Every time a condition is met, a new “requirement” is made. Well, Sunday the system begins to shrink and hundreds of thousands of people - both riders and drivers - will have to pay the price while the GA continues to “work on it.’

  25. - DC - Tuesday, Oct 30, 07 @ 12:33 pm:

    I’m not a transit expert, nor can I cite like a bibliography the examples of privitized transit services. My comments are not to be construed as down in the weeds quick fixes, but rather to emphasize that the GA should NOT be micromanaging the day-to-day operations of the CTA/RTA or anything else in Chicago with an “A” at the end of it. The GA could write the CTA a blank check and it would not be enough for them. That’s not their fault - they’ve been at the trough for so long that it’s hard to envision another way of doing business besides fare hikes and tax handouts. Blagojevich was going to end “business as usual” in Springfield but, frankly, the usual business is just as bad if not worse in 2007 as it was on election day in November 2002.

    The GA should work on the issue by removing their statutory authority for oversight. In 1995 the Mayor of Chicago clamored for control over Chicago Public Schools — and the GOP-led House gave it to him. I think the same approach should happen with this issue as well. Put accountability and responsibility for the local service in the hands of local elected officials and hold them accountable for results and outcomes. Ah - but that wouldn’t be business as usual…

  26. - Gregor - Tuesday, Oct 30, 07 @ 12:43 pm:

    I like the idea of the improved Gambling Authority, no matter if they actually expand gaming or not. Having it composed of feds and ex-feds is a nice touch; since I expect them to be having more and more to say about things and people in our state and Chicago government soon anyhow.

  27. - Angry Chicagoan - Tuesday, Oct 30, 07 @ 1:17 pm:

    I’ll add that there has been an effective cut in taxes for transit because the sales tax revenue they get has been going up less than one percent a year in an era of three percent inflation. That’s because a) this state refuses to tax services, b) the resulting high sales tax on goods means people buy mail order or out of area to skip the tax.

    So state funding of transit has been consistently shrinking in real terms — for 25 YEARS!!!!!

    We need a solution that

    1. Puts sales taxes on services so as to get some of it off goods. State sales tax is 6.25 percent on goods, nothing on most services. How about four percent on everything? Probably the same dollar revenue now. And it will keep pace with inflation in the future without having these crises every few years.
    2. Puts transit funding on more than just a sales tax, so that there’s some diversification. Transit aids property values, so how about some support from property owners? (Ooops, because of Illinois’ antiquated school funding system, all their support is spoken for by school taxes). OK, how about something from the income tax?

    All the people who reflexively say, raise fares (non-transit users mostly by the looks of it) refuse to accept how much they’re subsidized in other ways, and refuse to accept how much the subsidy to transit has been cut. Maybe congestion charging or more tolls will get their attention.

    I’d be willing to pay higher fares for better service. But not higher fares simply to salvage what we have now.

  28. - DC - Tuesday, Oct 30, 07 @ 1:33 pm:

    Angy Chicagoan has a great point — all this talk of bailout is nothing more than to have people pay more money for the same service. Although I don’t live in Chicago, I do live in a metro area with a high usage of public transportation (and yes, I use our Metro for travel in addition to driving). In the DC area, people take Metro not because of traffic congestion (it still sucks out here) but because paying $7.80 for a roundtrip Metro fare pass is a lot cheaper than what it costs in daily parking fees — fees that can run up to $300 a month or more in some places. While folks like Carl would have us believe that people take public transportation to promote an Al Goric society to make things more “green”, the only green consideration for most folks is the amount of green they save in parking and gas costs, not because of a conscious decision to do their part for an idyllic environment. In the end, it’s economics not eco-politics.

  29. - Peter R - Tuesday, Oct 30, 07 @ 1:44 pm:

    Greg - the airlines have professionals that understand the commodities markets and can hedge against the volatility of fuel prices.

    And I’m confused by your statement that airline fares don’t fluctuate with the cost of fuel. Where do you think they get the money to buy fuel? Free from the government?

  30. - Anonymous Lawyer - Tuesday, Oct 30, 07 @ 2:00 pm:

    In the interests of full disclosure it is my recollection that there is one relatively successful example of privitization — London. However, the circumstances in London couldn’t be more different. They have invested differently in the infrastructure, there is more control than one might think over the private contractors, different labor laws, the costs of driving in London are realized through congestion fees etc. We are a long away off from where they (and many European cities) are at with their transit system.

    Privitization certainly won’t fix our starving, dilapidated transit infrastructure in Chicago, nor would privitization have any market incentive to provide transit to poor residents and underserved, outlying urban areas. It is not even worth discussing at this point.

  31. - Greg - Tuesday, Oct 30, 07 @ 2:13 pm:


    No, they usually don’t hedge. LUV did, but their’s is mostly gone. My comment was that I was confused by the price index suggestion. Obviously fuel prices affect their margins, but there’s nowhere close to a proportional fare increase. That’s more competition-driven. And, thanks, I’m pretty clear on them not getting free fuel, as I follow the companies’ financials professionally.

  32. - Kuz - Tuesday, Oct 30, 07 @ 2:18 pm:

    London’s transit board is run by their mayor:

  33. - Anonymous Lawyer - Tuesday, Oct 30, 07 @ 2:24 pm:

    There are private bus lines, at least, in London. I had thought they privatized the Tube service too.

    Incidentally, NYC once had private bus lines as a quasi-part of the MTA transit systems. (Express buses from the outer boroughs.) Didn’t work and the MTA had to ultimately take it over. I’m not as familiar with the history but my recollection is that commuter rail service was provided by some private entities prior to the formation of Metra rail — I’m sure others know better than I.

  34. - c-rock - Tuesday, Oct 30, 07 @ 2:25 pm:

    The CTA is a waste of Money. PACE drives around big buses, with no one in them. Look at the next PACE bus you pass on the road, tell me if you see more than 5 people in it.

    We need to get government out of it.

  35. - Anonymous Lawyer - Tuesday, Oct 30, 07 @ 2:30 pm:

    Obviously someone who spends most of his day looking into empty PACE buses is intimately familiar with the usefulness of the CTA. What a thoughtful post.

  36. - Greg - Tuesday, Oct 30, 07 @ 2:30 pm:

    Here’s a quick hedging explanation, if anyone cares: most public companies don’t hedge their commodity exposure for several reasons (I’m not counting being 20% hedged as “hedged”): 1) Shareholders understand and often like the exposure when they buy the stock, and 2) whatever manager who supported the hedge is going to get screamed at when crude goes to $40 after he bought 10,000 futures at $91. It’s not fair, but it happens.

    As to my original airline reference: again I was just wondering aloud what possible company would “index” –not fluctuate–costs against fuel price.

    Geeze…I’m finding myself allied with the anti-free market side on this one.

  37. - Six Degrees of Separation - Tuesday, Oct 30, 07 @ 2:32 pm:

    DC - If $7.80 a round trip is a bargain in the Washington, DC area, just think of what a bargain the CTA is with its $75 30-day unlimited ride pass, which could pay for itself in the first 3 days of riding each month vs. paying for gas and downtown Chicago parking fees of $25 a day or more.

  38. - plutocrat03 - Tuesday, Oct 30, 07 @ 2:34 pm:

    To Mr Nyborg’s comments, public transit riders have also elected to live where the transportation is convenient for them and their daily routes. I could make negative comments on where they chose to live as you have towards thers, but that does not advance the arguement. The point is that what level of subsidy is enough from those who have no direct benefit. As to the folks who are concerned that the sales tax for the RTA/CTA have not been raised recently, they obviously have no clue as to how money flows through the system. While the sales tax rate may have remained a constant for a number of years, the value of the commerce has risen due to inflation and growth for each of those years resulting in large annual uncrease in the number of dollars available to the transit agencies.

    It is the agencies who have failed to meet the challenge of operating a leaner system, but if all the have to do is to cry poor, do you blame them for doing whatever they feel like with the public’s money?

    We also have to remenber that in addition to the operating budget which currently does not meet the 50% recovery goal, there is also a substantial capital budget which is 100% subsidised by the public dollar. No one on this thread has suggested a cut in he capital funding have they?

    When you take a step aback and consider the cash flows, we can see why govenment is in such a mess.

    Eveyone who uses the system us subsidised. The commodities trader from Mettawa, the financier from Kenilworth, the marketer from Libertyville. These are all people who should be ashamed to be taking money from those who really need it.

    The gross inefficiencies of governental operations are legion. The fat is not likely to be at the level where you and I can see it while using the system. The fat is at the headquarters where the denizens are busy doing things that do not effect services, collect large salaries and wait to vest their generous benefits.

    What is needed is a thurough overhaul of the organizational structure. Corporate America has been cleaning house for 20 years while th government still manages like it is still the ’70s

    The question for the voters is how to move the system forward. The only tool we have as voters is to starve the beast. The beast will resond with painful measurse of its own, but reasoning has not worked in the past and will not likely work in the future

  39. - pc - Tuesday, Oct 30, 07 @ 2:46 pm:

    @Anon Lawyer: Transport for London actually has a lower fare recovery ratio than CTA — 42% for TfL vs. 44.3% for CTA. And workers on the Underground went on strike last Friday over a privatization deal that failed: the contractor declared bankruptcy, leaving taxpayers with $3 billion+ in debt.

    @DC: One completely privatized transit system: Hong Kong’s MTR. Of course, Hong Kong is ten times as dense as Chicago (imagine every three-flat replaced with 30 apartments), and even then the trains are only marginally profitable; two-thirds of the MTR’s profits come from real estate (which is also how most profits were made on the “L” and Surface Lines pre-CTA), and the government still pays most of the capital costs for new lines. You can either have profitable transit or suburban sprawl; you drivers who say “hike the fares” can’t have your sprawl and eat it, too.

    @Greg: the other useful equivalent between airlines and transit is that they’re both labor intensive. Fuel is just 5% of CTA’s budget. Oh, and another thing: airlines also lose money. Warren Buffett famously said that he wishes he’d been able to shoot down Orville Wright back in 1903, since doing so would’ve saved capitalists billions of dollars.

  40. - plutocrat03 - Tuesday, Oct 30, 07 @ 2:49 pm:

    I’m glad tha Kuz wants the transit system to grow. And it shoud with reasonable public support.

    The problem is that the support being asked for is approacing the point of being unreasinable.

    Remember that the same senior citizens who you want to defend from fare hikes are also going to be hit by the sales taxes you seem to support. Taxation is trick business and thay haave all developed a good whine about how it is the end of the world if their particular ‘public benefit’ is reigned in.

  41. - Give me a Kinko's - Tuesday, Oct 30, 07 @ 2:59 pm:

    Has everyone missed the fact that the State can’t afford it’s highway program either? The gas tax isn’t indexed and hasn’t been raised in over 15 years. Rather than do the right thing and raise the tax to meet inflation, the leaders have decided on gambling revenues. Sounds like a big subsidy for motorists to me.

  42. - Angry Chicagoan - Tuesday, Oct 30, 07 @ 3:01 pm:

    More insight on UK transit — since the railways were privatized during 1994-1997, government subsidy has gone up from GBP700m a year or so, to somewhere approaching four to five billion a year (though it’s a little difficult to specifically say what because so many companies now have their noses in the trough).

    UK privatization is a case study of how NOT to save money on public transportation. Before privatization, intercity rail made money, even after capital costs. London commuter was a breakeven proposition. It’s nowhere close now. But they do have quite a bit more ridership. I can’t see Illinois accepting the kind of subsidies that UK privatization has required, though.

    PC has helpfully reminded us of the Metronet bankruptcy in London as well. So much for public-private partnership.

    London’s privatized buses work only because they are very heavily regulated and basically run on a for-contract basis in much the same way as Metra operates with the UP and BNSF. The deregulated bus services in the rest of the country are a disaster.

    The only privatization I see as even a legitimate possibility for improving service and/or saving money is along the lines of Metra’s outsourcing with BNSF and UP. And bear in mind those services were never fully taken into public ownership — and that Metra has done quite well also with services it totally runs.

    Build more roads? Not with my tax dollars, you don’t. The air quality is quite bad enough already, thank you very much. And I think in the long run we can do better and faster with other modes of transport, even for suburban people. We could have 100mph trains for Metra if the money was there to upgrade signalling and grade crossings and convert to electric-powered trains (and replace the wiring on the current Metra Electric with a higher voltage system that can support those speeds). You’ll never get that on a highway.

  43. - pc - Tuesday, Oct 30, 07 @ 3:03 pm:

    @Plutocrat, have you read the Auditor General’s 650-page report? Any whining about “inefficiencies” and “fat” should start right there.

    And yes, taxpayers subsidize drivers out the wazoo, too, but it’s called “investment.” Where did the extra $425,000,000 to cover cost overruns on the Dan Ryan come from? Who paid for my asthma inhalers, the ambulance that took my neighbor away when she was struck in an hit-and-run, the gunships in the Persian Gulf, the taller levees surrounding New Orleans, the Deep Tunnel that drains the runoff from all those parking lots, the water treatment to get oil refinery sludge out of Lake Michigan drinking water, the snowplows that clear the streets? All of these are costs incurred in part by your driving that we non-drivers pay, and collectively these costs are in the trillions of dollars each year in America.

    Also, if you had read the audit, you’d know that sales tax receipts have lagged inflation by better than one percentage point annually. I’m sure that you would have been happy with 2% annual raises every year since 1984; you could just “clean house” and everything would be better again.

  44. - pc - Tuesday, Oct 30, 07 @ 3:14 pm:

    And regarding the senior citizens hurt by the 0.25% tax increase: that’s the Governor’s line about “backdoor fare hikes” again. Bad news, bub: a report calculating the economic impacts of a similar (but smaller!) proposal to cripple Philadelphia’s transit agency found that the average transit rider would pay an additional $1.20 a day in higher fares, longer waits, and increased driving.

    You’d have to spend $480 a day to incur $1.20 in additional sales taxes under the 0.25% tax hike.

    In fact, the same study estimated that drivers and transit riders in the region would pay $1.50 out of pocket for every $1 the government “saved” by cutting the transit budget. A tiny back-door fare hike is vastly preferable to a huge front-door hike that leaves people out in the cold.

  45. - Six Degrees of Separation - Tuesday, Oct 30, 07 @ 3:29 pm:

    We could have 100mph trains for Metra if the money was there to upgrade signalling and grade crossings and convert to electric-powered trains (and replace the wiring on the current Metra Electric with a higher voltage system that can support those speeds). You’ll never get that on a highway.


    I would love to ride a Metra train at 100 mph that stops every 2 miles. How many G’s do you want Grandma to take on acceleration? I assume you are talking about express trains that would start at the end of the line and not stop til they got downtown.

    And forget about grade crossings at 100 mph+. We need grade separations, not gates, at those kind of speeds, not to mention a totally fenced right of way.

    And except for the Metra Electric, there are those pesky freight trains that the railroads insist on running on the same tracks, screwing up Metra’s high speed commuter train plans.

    It could be done; just prepare for billions of dollars in land acquisition, grade separations, new embankments, track work, etc. to make it work.

    I don’t mean to be a pessimist, just a realist. I wouldn’t mind seeing true HSR, I just don’t think Metra’s network is a cost efficient application of it.

  46. - wallace - Tuesday, Oct 30, 07 @ 3:34 pm:

    Daley’s spin room would want all out of towners, and many bozos that live here, to see the Mayor as a great urban manager. I was on the outer drive today (10/30)and counted 3 disabled busses between Belmont and Lawrence. This is a very common site along the outer drive. Now what kind of an urban manager would let a major transit system deteriorate to the crisis level that the CTA faces today? What kind of an urban manager, in light of this crisis, would appoint a 35 year old staffer with zero background in mass transit to head up the CTA? When times were good in the 1990’s economy Daley looked like a genious with the flowers, fences, gentrification with our TIF tax funds, Millenium Park with it’s %250 million cost overrun, and all the other veneer that we were treated to. When revenues are rolling in everybody looks like a good manager. Now that times are tough and the slush funds are depleted our great Mayor/manager blames all problems on a lack of revenue. He had all the revenue and wasted and misspent it and did not pay attention to the business. What was this Daley loyalist Frank Kruese doing at the CTA–no capital reinvestment, rude and surley employees, dirty facilities, poor service, etc.. What a great manager Daley is!!! We need a mayor like Michael Bloomberg in New York who is a successful, self made businessman who has only been in office one fourth of the time as Daley and has already replaced the worn out rolling stock in the NY transit system. The bottom line is that Daley cannot be trusted with our tax dollars and the more we give him the less efficient services that we get. We are stuck with the dictator for the next four years and much more damage can accumulate during that time. Daley–Stroger–and, Blago–we got the short straw.

  47. - Truthful James - Tuesday, Oct 30, 07 @ 3:58 pm:

    If CTA drops a route, there is no reason why that route should not be used by private enterprise using whatever sized vehicles necessary to meet demand. Most have no need for articulated buses. Vans on fixed routes with fixed schedules or jitney cabs would do, running a service schedule to meet demand. That was what I was proposing.

    My left field suggestion of turning the bus drivers into entrepreneurs leasing the vehicle and buying a series of route schedule was similarly motivated.

  48. - cermak_rd - Tuesday, Oct 30, 07 @ 4:44 pm:

    The L started out privatized. There were many lines and they all failed! I don’t see how privatized mass transit could actually work any better now than it did then.

    On the other hand, I am so sick of the whining of the pro-transit people that I’m perfectly willing to call their bluff, try out doomsday and see what the final result is. Maybe it won’t be that bad. Maybe people will find ways to come up with the money for increased fares. After all, others have to come up with the money to pay for higher gas prices.

    It is not reasonable to increase tax percentages every so often. If you do that and continue doing that you will eventually get to 100%. Instead, the tax percentage should remain constant and the natural growth in the economy should result in more actual dollars.

  49. - Carl Nyberg - Tuesday, Oct 30, 07 @ 4:52 pm:

    Why is it the people who want to privatize are the people who don’t use the services?

  50. - pc - Tuesday, Oct 30, 07 @ 5:34 pm:

    @Cermak, see Angry Chicagoan’s response for why the sales tax is slowly dying. Consumer goods and services make up the same proportion of the economy as they did in 1980, but the “goods” part of that (which pays sales tax) has fallen by over half. The “services,” which don’t pay sales tax, have increased substantially. Thus, sales tax receipts are stagnant even while the economy grows.

    @Wallace: the broken down buses partially stem from the lack of money given to bus maintenance over the past few years. Every year of “doomsday” has resulted in the CTA (and Pace and Metra) siphoning away capital and maintenance money to pay for operating costs. There has been insufficient revenue for years.

    @Truthful: about 80% of the cost of running transit service is labor. Running smaller buses doesn’t reduce costs by nearly as much as drivers think, since drivers don’t factor the cost of their own time into their transportation costs. Even those “privatized services” in London are still subsidized; they’re just contracted out to the bidder who accepts the lowest subsidy. Where do people get this notion that low-demand transit routes are magically going to pay for themselves?

  51. - Levois - Tuesday, Oct 30, 07 @ 5:49 pm:

    A recipe for disaster? Only if the governor insists on utterly beating this into the ground.

  52. - gg - Tuesday, Oct 30, 07 @ 5:53 pm:

    Who wants to drive a bus in Chicago?
    The job tops out around 60K with your back to gangbangers?
    Oh yeah, I forgot … HOGS AT THE TROUGH.

    Get a clue. Without the CTA the state economy goes doen the toilet.


  53. - Had Enough - Tuesday, Oct 30, 07 @ 6:58 pm:

    * Meanwhile, Peter DeFazio, who chairs the US House Highways and Transit Subcommittee was in Chicago yesterday and had some harsh words….

    “There will be no Chicago transit system upon which to build, if the Legislature and the governor don’t get their act together, plain and simple. From what I understand, they’re looking at catastrophic cuts here, and when you make catastophic cuts to a transportation system, things happen that take years, if ever, to turn around.”

    WOW! I wonder if DeFazio realizes, he just described every agency of our state government.

    It will take decades (if ever) to recover from this Govenor. The CTA problem is just one small ripple in the pond.

  54. - irked irene - Tuesday, Oct 30, 07 @ 8:39 pm:

    what a debacle…what a lack of insight on display here of the value of a public transit system for one of the largest and most economically diverse cities in America..I hope the ignorant bloggers on who posted here enjoy spending more time in their cars after 11/4 in traffic gridlock getting fat and missing out on family time and the social aspects of life that van make it bearable…Blago should be run out of town on a rail…pun totally intended…

  55. - pc - Tuesday, Oct 30, 07 @ 10:43 pm:

    Pluto responded to Nyborg thusly: “public transit riders have also elected to live where the transportation is convenient for them and their daily routes.” Well, yes. That’s because we assumed (falsely, you would say) that such services would continue into the future. In my case, I think that was a reasonable assumption — given that six generations of Chicagoans have relied on the #56 Milwaukee bus, in one form or another, since the Civil War.

    By that same logic, I should immediately cease use of my toilet and use a chamber pot instead, because the good taxpayers of the Metropolitan Water Reclamation District could at any moment shut off my neighborhood’s sewer lines.

    I’m sure that news will come much to the chagrin of my downstairs neighbors. Well, they’ll just have to grin and bear it, because it’s all in the name of Lower Taxes!

  56. - JakeCP - Tuesday, Oct 30, 07 @ 11:06 pm:

    As a CTA customer, I am very displeased with the service that the CTA has to offer. The CTA truly needs funding, but a sales tax increase isn’t the answer. I would’ve supported the expansion of gambling in Illinois. That would’ve been perfect, if people are going to gamble in Indiana, we might as well have them gamble here so we can keep the money in Illinois. Think about it, lately everyone has been going to Indiana for goods such as cigarettes and alcohol. Why do we want to keep people running to Indiana with another sales tax increase? Even though the CTA may affect a lot of people (including people who don’t use the CTA), I have to disagree with the comment made by the RTA head that it affects all people. Some people don’t do much traveling except walking to the local convenient store because they can’t afford a car and had to stop riding the CTA from the last fare hike increase. As much as it hurts me to say this, I would rather see the fare increase than a sales tax increase. Even though the fare increase will hurt, everyone should not be taxed for the RTA’s sake. Some serious reform needs to take place in the RTA, so that we don’t have to face any more fare increases.

  57. - JakeCP - Tuesday, Oct 30, 07 @ 11:09 pm:

    Oh and one more thing that people run to Indiana for is gas!!!

  58. - wallace - Wednesday, Oct 31, 07 @ 8:55 am:

    Thank God for our friend pc who has all the answers to our confused thinking. He truly likes getting ripped off by the politicians and buys into all of their excuses. Who knows, maybe he even has a front row seat at the trough!!

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