CTA 2011 budget proposes no fare increases, service reductions

Chicago Transit Authority President Richard L. Rodriguez proposed a $1.337-billion budget for 2011 that, through cost-conscious management, maintains current fares and service levels. Rodriguez said that the CTA is working diligently to deliver on its mission while operating in a very tough economic environment. Despite limited resources, it will also continue to focus attention on areas where strategic investments will lay the foundation for future improvements and customer benefits.

The proposed budget is
$66.7 million, or 5.2 percent, more than the 2010 budget due in part to
contractually required union wage increases, along with pension and healthcare
obligations. These fixed increases were partially offset by management
efficiencies that are expected to save nearly $54 million in 2011.

The CTA projects a balanced
budget as required by law. The public funding mark set by the Regional
Transportation Authority is $529.3 million. This public funding level is $92.5
million lower than in 2008 and $257.9 million lower than projected following
the passage of the state’s mass transit funding and reform bill (HB 656) in
2008. To make up the difference between what it has and what it needs, the CTA
proposes to transfer $113 million in eligible capital funds to the operating
budget.   

In addition, due to a
borrowing agreement between the RTA and the State of Illinois, the CTA is to
receive $83 million in bond proceeds in return for not raising fares. Although
the State is experiencing its own financial struggles, the CTA is relying on it
to meet its commitments to the CTA, both for the public funds that make up a
large share of operating revenue and the promised capital program.

The Recovery Ratio, which
measures the portion of operating expenses the CTA has to fund from revenues it
generates, is forecast at 54.6 percent, which is higher than the required ratio
set by the RTA and considerably higher than the recovery ratio required in
other transit systems across the country.

In the coming year,
Rodriguez said the CTA would be moving ahead with the first order of new rail
cars in more than 15 years. Also under way is a new initiative that will
transform the way customers pay for transit and allow the CTA to avoid an
upfront capital cost to upgrade fare equipment. The CTA is implementing a
biometric time and attendance system that will increase accountability and
allow for better analysis due to more centralized data. It is also investing in
multiple technology projects that will add value, ease customer use of the
system, offer more and better information, and establish a safe environment.

The 2011 budget proposal
includes a Capital Improvement Plan of $599.5 million, including $285 million
in new state funding promised in the recent state capital program. Once those
funds are received, the agency is ready with a list of projects that include
overhauling buses; rehabilitating bus garages and rail stations; upgrading
substations and replacing track to eliminate and prevent slow zones.

The CTA also continues to
apply for grant opportunities. In 2010, the CTA submitted 43 applications under
these programs that total approximately $836 million. While many of the
applications are pending, the CTA has been awarded approximately $13.5 million
for BRT and various energy efficiency and planning projects. The CTA will
continue to aggressively pursue additional funding under these competitive
grant programs.

CTA customers and the
general public will have the opportunity to comment on the budget at public
hearings.