Sep 8, 2008 3:48 pm US/Central
CTA Making Cuts As Another Budget Crisis Looms
Free Ride Programs Cut Revenue, But Fare Hikes Not Among Cost-Cutting Moves
CHICAGO (CBS) ―
The Chicago Transit Authority is taking measures to tighten its belt, but for now, none would directly impact riders.
But agency officials won't rule out a fare increase in the future
CTA President Ron Huberman on Monday outlined the cost-cutting measures. One of the main reasons for the cuts: The agency needs to offset the revenue lost when the state mandated free rides for seniors. It's a program governor Blagojevich demanded back in March in exchange for his support of a state bailout for the CTA.
''The bottom line is that they're not free,'' Huberman said. "Someone ultimately pays for the program.''
Senior Crys Mazul rides for free. She's one of 91,000 seniors who takes advantage of the program. That figure has more than tripled since free rides started back in March.
Mazul thinks it is unnecessary and unfair to other riders. "I think there are so many seniors who can afford it. When I see women with two or three children having to pay, I think it's awful.''
Huberman also said the CTA's fuel and energy costs alone will amount to $37 million more this year than last year. The CTA will ask the state for more money, and a future fare increase is possible.
The story is familiar to regular riders.
"You kind of do wonder – if there's a lot more people on the train and you've added cars and you've made all the stations much more beautiful, that there should be some pocket of money somewhere," said CTA rider Katie Rak.
"I'd just like kind of to hear an explanation as to why they've done construction on virtually every line and they're still raising fares," said CTA rider Mark Angerame.
"What are we going to do? We're going to come to the same situation over and over again," said CTA rider Lee Williams.
It's the same story and a new year. Everything costs more, and the CTA is hit hard once again. But this year, the free rides cost the CTA the most. In addition to seniors, free rides were later granted for military personnel and the disabled.
Altogether, the free rides add up to $20 million in revenue that will not be collected. Add that to labor, fuel and lost taxes, and the CTA has a $66 million projected shortfall.
For now, though, the CTA is limiting cuts to its own administration.
"We are engaging in over $40 million worth of belt-tightening initiatives to close the belt for 2008, and position us, so to speak, with a tighter belt for 2009," Huberman said.
Planned measures include the recent elimination of 43 positions and cuts to 80 administrative positions before the end of the year. The move involves both layoffs and the elimination of vacant positions, the CTA said. The cuts will save $4.9 million, according to the CTA.
CTA employees are nervous.
"We're praying that not too many of us will be out of a job,'' said bus driver Clarence Covington.
Further, the CTA is outsourcing garbage collection at its facilities, for a savings of $500,000 per year.
Officials insist they'll try and avoid raising fares.
The Regional Transit Authority said in response to the CTA's cuts that in addition to layoffs, officials have been trying to identify savings and boost revenue, "but the lack of adequate capital funding has exacerbated these financial challenges. Efficient, modern equipment would save operating expenses and allow the CTA, Metra and Pace to more effectively manage transit services."
The RTA said that with the poor economy, the CTA, Metra and Pace "will continue to face tremendous fiscal challenges over the coming months."
This is all despite the fact that ridership is way up.
Last week, the CTA reported that high gas prices and a poor economy have driven ridership on the CTA up 5.3 percent compared with last year. For the month of August, ridership was up 9.5 percent compared with a year earlier.
"In hard numbers, that means that 1.9 million more bus rides and 808,000 more train rides were taken this August, compared to last August," the CTA said in a news release on Thursday.
Last year, the CTA was threatening to hike fares to as much as $3.25 and cut dozens of bus routes due to a funding crisis, but Illinois lawmakers averted the "doomsday" plan with a sales tax-based bailout plan.
CBS 2's Joanie Lum and Dorothy Tucker contributed to this report.
(© MMVIII, CBS Broadcasting Inc. All Rights Reserved.)
Video: CBS 2's Picks To Click
