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November 2009

Rail News: Passenger Rail

Transit agencies already proposing fare hikes, job and service cuts for FY10

The past year has been a tough one for transit agencies, as they continue to feel the effects from reduced sales tax revenue and lower ridership due to the economic recession. Agencies have responded by implementing fare hikes, budget cuts and layoffs. It appears that 2010 will hold more of the same.

Last month, the Chicago Transit Authority (CTA) released its 2010 budget recommendation. A 30 percent drop in public funding, as well as union contracts and pension obligations, contributed to a $300 million budget shortfall, prompting a fare hike, job cuts and service reductions, said CTA President Richard Rodriguez said in a prepared statement. Projections for expense cuts and revenue generation have enabled the agency to propose a balanced 2010 budget of $1.29 billion, he said.

The authority plans to hike fares to $3 for all rail services, increasing ticket prices from 33 percent to 50 percent. The CTA also plans to reduce rail service by 9 percent. All service changes and fare increases would take effect Feb. 7, 2010.

Windy City Woes

In addition, the CTA — which already cut spending by $50 million this year through labor cost controls, materials and fuel savings, and other efficiencies — proposes to forego salary increases and institute up to 18 unpaid days for non-union staff, and eliminate up to 100 non-union administrative positions and more than 1,000 unionized jobs.

CTA also is reaching out to its unions — which represent about 90 percent of the agency's workforce — to help reduce costs in 2010. Union members received a 3 percent wage increase in 2009 and are set to receive a 3.5 percent hike next year. Other cost-cutting measures include scaling back contracts, reducing expenditures and hedging fuel to save an estimated $10.5 million. CTA also will transfer $90 million in eligible capital funds to the operating budget for preventive maintenance to reduce the budget shortfall by $122 million.

Another Chicago transit agency is facing a rough 2010, as well. The recession has caused Metra's sales tax receipts to hit a 10-year low, the agency said last month when it proposed a $613 million 2010 operating budget. The spending plan does not include changes to commuter-rail service, but does propose a fare hike.

Metra would raise one-way fares by about 6 percent, or an average of about 30 cents per ticket, depending on the travel zone. Weekend fares would increase from $5 to $7. The fare hikes would take effect Feb. 1.

Metra already has adopted a series of other cost-control measures that have saved about $4 million in administrative costs, such as leaving about 150 open positions unfilled, freezing management salaries and asking non-union employees to pay more for their health insurance.

Round Two

In southern California, Metrolink is proposing its second fare hike in five months.

On Aug. 1, the agency raised ticket prices 3 percent system-wide. Now, Metrolink is seeking to raise fares another 3 percent on Jan. 1, 2010, as well as revise the 10-trip ticket pricing policy to five equal round-trip equivalents.

The second fare increase is necessary because "the continuing economic crisis has significantly affected ridership, causing a reduction in revenues," Metrolink officials said in a prepared statement. "The agency is facing a forecasted drop of $6.1 million in revenues and increased expenses of $1.8 million during the fiscal year ending on June 30, 2010."

Finally, the Port Authority of Allegheny County's board last month approved plans to boost fares and change several services next year. The authority won't reduce the overall level of service or eliminate any operating positions, according to the agency.

The Zone 1 base fare will remain at $2, but the Zone 2 base fare will increase from $2.60 to $2.75 beginning Jan. 1. The Pittsburgh authority initially proposed to hike the fare to $3. In addition, the authority will phase in changes to 27 light-rail and bus services during the next two years. The first changes — which call for eliminating duplicate and underused routes to add trips and increase hours of operation on high-demand routes — will occur in March 2010.


Browse articles on Chicago Transit Authority Metra Metrolink Port Authority of Allegheny County ridership fares

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