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10/15/2007



Rail News: Rail Industry Trends

Lack of state funding may result in job and service cuts, and fare increases at Chicago Transit Authority



Unless the Illinois General Assembly reaches a transit funding solution in the next month or so, deeper service cuts, employee layoffs and fare increases are in store for the Chicago Transit Authority.

Scheduled to take effect Jan. 6, 2008, the actions would follow service cuts, fare hikes and layoffs already scheduled to occur Nov. 4, CTA President Ron Huberman said in an Oct. 12 statement outlining the agency's proposed 2008 budget.

"We have worked diligently with Springfield all year to create a long-term solution to CTA's structural funding deficit, but with no resolution yet, we are out of options," he said. "This is not something we want to do. We realize it will cause tremendous hardships for many people who rely on the CTA, but next year the CTA simply will not have sufficient funding to continue providing the same level of service as it does today."

CTA's proposed 2008 operating budget is $1.034 billion — $45 million less than the 2007 version. CTA officials expect to generate $562 million in fares and other revenue, and anticipate $472 million in public funding. To maintain service and fares at current levels, the CTA needs an additional $158 million due to shortfalls in four areas:

• The CTA's funding agency, the Regional Transportation Authority, reduced CTA's funding level by $14 million compared with 2007's total.

• The CTA's public funding is growing at a much slower rate than related expenses — it increased by 4 percent during the past five years. By contrast, inflation increased 11.3 percent during the same time period. CTA also has paid more for fuel, materials and security.

• Although CTA employees did not receive wage increases in 2007, a pending union agreement would provide a 3 percent increase in 2008.

• CTA's proposed pension and health-care reforms have not been approved by the Illinois General Assembly.

As result, CTA has proposed eliminating 43 additional bus routes, laying off 1,799 additional employees and raising fares by at least 25 cents in January.

Combined with the measures scheduled to take effect next month, the CTA has proposed eliminating 53 percent of all bus routes; laying off more than 2,400 employees, including administrative and support staff; and implementing back-to-back fare increases.

"We at the CTA sincerely hope that we never have to implement this budget," Huberman said.

Meanwhile, CTA also unveiled its proposed five-year capital improvement program. The $2.4 billion plan includes $2.2 billion for projects to remediate slow zones, renew CTA assets, overhaul and replace the fleet, and $0.2 billion to expand the vital system, including completion of the Brown Line capacity expansion project. However, $6.3 billion worth of improvements still are needed — and unfunded — to keep the system operating in a "state of good repair," the agency said.

CTA customers and the general public will be able to comment on the 2008 budget recommendations at a Nov. 5 public hearing at CTA Headquarters. The Chicago Transit Board must submit a budget to the RTA by Nov. 15, and the RTA must approve the budget by year's end.




Contact Progressive Railroading editorial staff.

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