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* The Tribune ran an editorial yesterday about pending CTA fare hikes and blamed much of the problem on Gov. Rod Blagojevich…
More evidence came Monday that Gov. Rod Blagojevich’s efforts to buy off the electorate voter by voter come at a real, significant cost. The Chicago Transit Authority announced it will eliminate 80 more jobs. Fare increases and service cuts could be on tap for next year.
Why? Several reasons. But here’s a big one: Blagojevich insisted that the CTA and other state transit agencies give away their services to certain people.
Last week, Blagojevich signed a bill that requires public transit agencies to provide free rides for poor people who have disabilities. Earlier this year, he insisted on those agencies give free rides for senior citizens. (The Chicago City Council also got in the act, telling the CTA to give free rides to soldiers and disabled veterans.)
Meanwhile, Blagojevich has cut the state funding that transit agencies counted on to help pay for free and discounted transit rides. That’s putting a squeeze on the people who have to provide the services the governor loves to give away.
Providing free rides will cost the CTA $34.5 million in 2009. Blagojevich just took away $32 million in annual state subsidies to the CTA intended to offset reduced fares.
The total squeeze for 2009: $66.5 million.
* Yesterday afternoon, Mayor Daley blamed the governor for any CTA fare hikes next year…
Daley is pointing at the free rides for seniors as a reason the CTA tightened its bureaucratic belt by another $40 million this week to lay the political groundwork for a fare hike and service cuts.
Daley said Tuesday the agency’s financial woes can be blamed partially on the governor’s veto of the state’s reduced fare subsidy, and his executive order mandating free rides for low-income people with disabilities. He said those problems were exacerbated by the Chicago City Council’s decision to extend the freebie to active military personnel and disabled veterans.
* The governor’s office shot back at critics…
“To think that a $66 million program in a $1.2 billion budget is causing all this is hard to believe. It amounts to two-to-three-cents-a-rider. They’re using seniors as a scapegoat. It’s just not right. It’s not fair,” [Blagojevich spokesman Lucio Guerrero] said, suggesting that the CTA follow the state’s lead and cut jobs instead of raising fares.
* And added…
Guerrero argued that the slumping real estate market, declining retail sales and rising fuel costs are even more responsible for the CTA’s budget crisis. The CTA expected the real estate transfer tax hike to produce $7 million in May. The actual take was $2.7 million, he said.
* Guerrero appears to be correct. According to the CTA itself, May sales tax receipts were $1.8 million below budget, and real estate transfer tax receipts were $4.3 million below the average monthly budgeted amount.
Those two factors alone work out to an annualized budget shortfall of $73.2 million.
* Also, according to the CTA itself…
The primary drivers of the deficit for the month and year are higher labor and fuel expense.
* And then there’s this from the same report…
By contrast, fare revenue continues to exceed budget due to higher ridership and a higher average fare.
In other words, they’re bringing in even more fare revenues than expected despite the free rides.
* The bottom line is this: Yes, the free rides and the governor’s veto of subsidies has probably hurt the CTA’s budget. But those factors don’t appear to be the sole or even the most significant source of the problem.
Disappointing tax receipts - from the stalled housing and retail economy along with people leaving Cook County to shop - appear to be the real problem here.
* Related…
* CTA plans comment sessions - Public can discuss good, bad about city’s transit agency
* Free rides remain popular among seniors
* Raw audio of Daley’s press conference
posted by Rich Miller
Wednesday, Sep 10, 08 @ 10:04 am
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This issue, along with many other issues facing the state, brings me to this conclusion-
All I keep hearing are people pointing their fingers at the problems. Where’s the solutions?
Comment by BandCamp Wednesday, Sep 10, 08 @ 10:12 am
Easy solution is no more free rides. I have no problem with reduced rides, that’s what we’ve had all along. These gimmes are designed to make wobbly politicians look good. I’m sure some might suggest as I’ve seen changing the whole pension and labor formula at CTA. Perhaps even privatizing CTA.
Unfortunately in doing homework on some of these solutions, it’s much easier to point fingers!
Comment by Levois Wednesday, Sep 10, 08 @ 10:20 am
Daley is the individual most responsible for the CTA debacle. He’s consistently failed to prioritize mass transit, and has only recently gave it some attention only as it pertains to securing the 2016 Olympic bid. Hizzoner has immunized himself from accepting blame for anything. Say what you will about the need to replace legislators in Springfield - and there’s much to be said - but Daley tops my list as the guy who needs to go away come 2010.
Comment by The Doc Wednesday, Sep 10, 08 @ 10:24 am
The Mayor skapegoating? Never. The governor being unfairly blamed? Never!! Welcome to reality folks — this happens everyday.
Comment by Anonymous Wednesday, Sep 10, 08 @ 10:30 am
If this was a private organization, the price increase would have occurred and life would go on. Or there would have been lay-offs, or lines would have been altered, or some other accommodation would have happened and life would go on.
Instead we listen to endless bickering, political posturing and constant whining over events that each of us deal with daily as adults. All this negativity does not encourage ridership because as adults with responsibilities, we have to depend on our transportation. We wouldn’t drive a car manufactured by an organization as poorly operated and argumentative as the CTA, would we? It would be too risky, regardless of price.
Things happen. Life changes. We live in a dynamic society. If this is the mentality we have to witness when changes happen, then don’t be so surprised when our buses and trains show up and fewer of us get on.
We have a life to get to!
Comment by VanillaMan Wednesday, Sep 10, 08 @ 10:32 am
Yeah, I wrote yesterday that Blago was probably getting a bad rap for this. I don’t approve of the way he gave the free rides, but as is being pointed out there are a number of factors at play. And besides, when has the CTA not had a budget crisis?
Having said that, a decent mass transit system is just as important as good roads. A real mass transit agency, free of the competing parochialsim of the CTA, Metra and Pace would be a good start for setting priorities and allocating resources. Right now, the RTA board doesn’t have the power.
I ride the CTA twice a day. It’s safe.
Comment by wordslinger Wednesday, Sep 10, 08 @ 10:46 am
Wordslinger, I thought that as part of the bailout the RTA was blessed with more oversight and control over each of the three transit providers, no?
And we’re not close to enjoying a “decent” mass transit system. Everything filters into the city center. No suburb to suburb, or even neighborhood to neighborhood connections exist unless you’re travelling on one of the lines with its nexus in the Loop. Buses are better, but they’re prohibitely slow and fight the same congestion and road woes like all the other vehicles.
Comment by The Doc Wednesday, Sep 10, 08 @ 11:22 am
Reasonable and regular fare increases should be part of any funding shortfall solutions.
The Emperor of Chicago is responsible for adminstrative featherbedding at the CTA and for various and sundry actrs and omissions by his loyla minion, Frank Kreusi.
But Governnor Pinnochio clearly has aggravated the mass transit funding problem by his fiscal delusions that free rides for the elderly and disabled don’t cost big money, as well as the veto of funds to support dsicounted fares.
There’s plenty of blame to go around/be shared by the Emperor and Pinocchio.
Comment by Captain America Wednesday, Sep 10, 08 @ 11:27 am
Blago’s same argument can be made against cutting a meager $16.8M from IHPA & IDNR. Many of these entitities bring in more than they expend on personnel and the $16.8M is a pittance compared the overall IL budget.
Comment by SangamoGOP Wednesday, Sep 10, 08 @ 11:36 am
SangamoGOP, excellent point.
Comment by wordslinger Wednesday, Sep 10, 08 @ 11:43 am
If the decrease is $66.5M to $73.2M from a $1.2B budget that means a 5.6% to 6.1% decrease. A $2 ride can go to $2.25 and cover the difference with change left over to go toward repairs. I am sure a $.25 raise will cause severe problems somewhere. Ya can’t give a away the ship, not cover costs, and expect to do well. Something needs to give.
Comment by zatoichi Wednesday, Sep 10, 08 @ 2:08 pm
And whaddya know, the Trib is reporting the Loop signal and track upgrade project is both well behind schedule (like a YEAR) and over budget. Can I pretty please blame Blagojevich for this one too?
Comment by The Doc Wednesday, Sep 10, 08 @ 2:41 pm
A pox on both their houses. “Free rides” is a dumb money-losing idea (and why do disabled people have to be both low income and disabled?) but the mayor seems to have a magic pass on many issues. RTA is “nominally” presiding over CTA, Metra and Pace. How does CTA have two bosses - RTA AND city of Chicago? Why doesn’t CTA agitate to get some local matching funds for capital project funding from the city? Why wasn’t Meeks demonstrating at city hall about school funding? Doesn’t the city collect a lot of property tax, and who decides how much goes to the school district?
Comment by NoGiftsPlease Wednesday, Sep 10, 08 @ 6:46 pm