Service cuts, more fare increases possible at CTA

The problems are bad and the solutions could be worse.

The Chicago Transit Authority faces a projected revenue shortfall of $155 million this year. If all goes exactly according to plan, officials say they could save up to $80 million. But even those savings would leave a gap of $75 million for the year.

Today, officials cited two options to clear the hurdle: service cuts and fare increases. The other options were vaguely worded changes to the labor force and more borrowing, which regional officials have already warned CTA officials to avoid.

"We have to outline options that are within our control," says Carole Brown, CTA's chairwoman. "The only two things in our control are the fares and the service that we provide."

The CTA raised fares 25 cents across the system in January. For months, officials at the agency have said that they want to prevent further hikes and dreaded service cuts, which would leave some riders stranded at old stops or waiting for longer periods of time.

At today's CTA board meeting, though, it was clear that despite ridership growth, revenue outside the farebox continued to fall. That is troublesome for the agency because it receives most of its funding from sources unrelated to ridership, such as sales and real-estate taxes.

January alone held grim figures for the CTA. While total revenue was up 2.4 percent to $47.3 million, non-fare revenue slid 2.1 percent to $3.1 million.

The long-term picture is worse. From 2008 to 2010, officials say they expect about $403 million in public-funding reductions, and the shortfall figures rise year over year. In 2010, officials say they will face the largest shortage, $161 million. That's $6 million more than they expect this year.

Transit officials are still trying to determine the shortfall for 2008. While the CTA estimates the figure at about $87 million, officials at the Regional Transportation Authority, which funds the CTA, determined it would be closer to $55 million.

Officials say the discrepancy should be cleared up by the end of March since a revenue report will lag about three months behind the period ending in December.

The public-funding deficits come in large part because sales and real-estate taxes have plunged with the national economy, officials say. While the CTA budget was set for $723.3 in those taxes this year, officials now expect to receive 21 percent less.

To address the shortage, officials say they could save up to $80 million without raising fares or cutting service. Among the cost cuts are lowering the cash reserve for injuries and damages, restructuring management positions and selling real estate. The CTA has already offered dozens of properties for sale or lease as it seeks shore up revenue.

To get beyond those $80 million in savings, the CTA must find more money -- via RTA loans or other funding -- or cut deeper, through labor changes, service cuts or fare increases. Officials might opt for all of those.

It's an ugly array of choices for new CTA President Rich Rodriguez, who said he would count on the veteran "experts" at his agency to creatively cut costs.

"There's opportunities for us to sincerely hit that $80 million mark and then continue to work with the board and the RTA to try and make up the difference," Rodriguez says.

CTA spokeswoman Sheila Gregory did not immediately respond to a question about whether labor changes would involve further layoffs. The CTA cut hundreds of positions in 2008 and 2009.

CTA officials are expected to adopt changes to the annual budget during a meeting in April.

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