Chicago Area Local News

CHICAGO (CBS) ― After once again taking millions Chicago area commuters and thousands of transit employees right to the brink, leaders in Springfield have again postponed the tough decisions needed for a permanent fix.

The Federal Transportation Administration has approved a plan in which the state will give the CTA $21 million, thus averting the enactment of the organization's "doomsday plan" of service cuts and fare hikes.

Gov.Blagojevich offered $27 million to be split between the CTA and the Pace suburban bus service. The money is in the form of a grant that would allow the CTA to continue operating normally without raising fares and cutting service -- but only through the end of the year.

"The short term funding is not a loan, it is new money we are providing them to keep serving their riders," Blagojevich wrote, adding that he and legislators continued to seek a long-term solution.

For his part, the governor took no questions and declined to explain why he waited until just 48 hours before this weekend's deadline to grant $27 million to the transit system. The offer will give $21 million to CTA and $6 million to the Pace suburban bus system, allowing the agencies to run through the end of the year without cutting routes and raising fares. Blagojevich said the money comes from unallocated federal funds for use by the state.

"We're excited about the fact that the money we're providing directly to the CTA and the RTA is money that will keep operation going at current levels well beyond the Christmas holidays," Blagojevich said.

The governor and top politicians at the Capitol won't be able to put off a decision on a permanent solution for much longer, in part because CTA unions are quietly talking about a strike. Members are infuriated that the fund that pays medical bills for CTA retirees will go broke in early 2008.

CTA unions recently ratified a five-year contract, but it was contingent on the state fixing the CTA's finances by the end of December.

If that doesn't happen, "the whole union agreement would have to be renegotiated before January 1, so we need to know substantially before that," said RTA President Jim Reilly.

"We can renegotiate that deal, if we can put people in a room, " said Dennis Gannon with the Chicago Federation of Labor. "But then again you've got to go back and ratify this with the membership, so there's a deadline out there."

But having just been threatened with 2,600 layoffs, the unions' rank and file is understandably unhappy. So, state officials would be wise to get a deal hammered out before the end of next month.

"It's great that the governor came up with the $27 million solution, but we're still back to where we were two weeks ago, six weeks ago, six months ago," Gannon said. "We need to get mass transit solutions here in Springfield and we need it now."

Transit officials said earlier they would not accept another quick-fix solution, but later, they concluded that postponing the "doomsday" scenario was better than doing nothing.

"We're beginning to re-call all of our employees who were set to be terminated as of Sunday morning, that that is not happening," said CTA President Ron Huberman. "We're actively doing that. We're confident that we will be able to maintain normal service as of Sunday, and as most importantly, Monday the 5th rush hour we will be able to provide the same level of service that we have been providing."

"I'm tired of talking about doomsdays," Reilly said. "We have a commitment. I think the legislature will live up to it. To name a precise day doesn't do anything but to produce headlines."

"Obviously this is an intense time for us," Reilly added. "We'll never be able, probably, to explain to the public how real the deadline was until real money was offered."

The CTA had been preparing to cut service and increase fares on Sunday. The plan had originally been to enact doomsday in September, but Blagojevich came up with a temporary bailout that postponed a planned CTA doomsday in September, which involved borrowing from the 2008 budget.

Another plan being floated by House Speaker Michael Madigan (D-Chicago) would raise $434 million by raising taxes in Cook County and the collar counties by 0.25 percent. But Blagojevich does not support a sales tax hike.

The CTA had planned to cut service and increase fares drastically on Sunday from $2 to $2.50 per ride, and $3 for 'L' rides during peak times. Fares would also increase to as much as $3.25 per ride in January when a second round of cuts would take effect. In addition, 39 bus routes have been eliminated effective Sunday, and 43 more in January.

CTA officials estimate as many as 100,000 riders a day would have been affected if they had gone ahead with the proposed cuts. Six hundred transit workers would also have been lain off.

"There is no way I could walk the streets of my neighborhood or actually be there," said South Side Democrat Rep. Robert Molaro. "These people will tar and feather me, and they should. It's our job not to put [them through this] and if we do, then shame on us."

CBS 2's Rafael Romo and Political Editor Mike Flannery, and the Associated Press, contributed to this report.

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