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9/9/2008



Rail News: Rail Industry Trends

CTA to trim jobs, costs


Soaring fuel prices, lower-than-anticipated sales tax proceeds, and a state subsidy loss and new free-ride mandate are taxing the Chicago Transit Authority's (CTA) budget. Although the agency hasn't yet developed its 2009 spending plan, officials already are implementing major belt-tightening measures.

Yesterday, CTA announced it will cut about $40 million in costs. The agency has eliminated 43 jobs, including nine management positions. CTA also trimmed jobs by realigning the technology, purchasing and law departments. By year's end, the agency expects to cut a total of 80 administrative positions through a combination of layoffs and attrition, saving the agency a total of $4.9 million.

CTA also will outsource refuse collection at facilities to save more than $500,00 annually, defer contract spending for "non-critical needs" and reduce overtime, the agency said.

Earlier this year, the Illinois General Assembly passed legislation to provide CTA with additional funding to balance its operating budget and enable the agency to issue bonds to restore the pension fund and establish a retiree health care trust. However, the economic slow down has resulted in lower-than-projected sales tax revenues. In addition, the state mandated that CTA provide free rides to senior citizens and Gov. Rod Blagojevich vetoed a reduced fare reimbursement program that would have offset a portion of lost ticket revenue.


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