The CTA agreed to accept $24 million in stopgap state funding Wednesday to avert the “doomsday” service cuts and fare hikes set to take effect next week, but the cash advance only puts the agency in a deeper financial hole.
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If approved by the Regional Transportation Authority, the money would hold off fare hikes and service cuts until November, officials said. But the emergency cash offered by Gov. Rod Blagojevich is an advance on CTA’s portion of the 2008 state budget and could mean even more drastic cuts and hikes if the governor and lawmakers can’t agree on a long-term solution.
And though the money would mean a reprieve for CTA riders, it may not address the needs of the Pace suburban bus system. Funding for Pace was apparently not included in the offer, and agency officials said thousands of elderly and disabled riders who use paratransit service, as well as those who take vanpools and local and feeder buses, may still face higher fares Sunday.
The CTA announced plans last month to raise fares and eliminate 39 bus routes Sunday unless new state funding is approved to help the transit agency fill a $110 million shortfall in its 2007 budget. Even if the RTA accepts the proposal, the CTA will have to start making cuts Nov. 4, officials said.
‘Appreciates’ offer
The RTA said it “appreciates” the governor’s offer to advance the funding, but would wait until Friday’s board meeting to decide whether to accept it.
“On its face, the proposal averts an immediate crisis, but may create an even greater problem in the coming months,” RTA Chairman Jim Reilly said in a statement. “Given the current political dynamic in Springfield, the RTA has to decide whether it is prudent to ‘hope’ legislative leaders and the governor will act to place the regional transit system on sound, permanent footing.”
Under increasing pressure to help resolve the mass transit crisis, Blagojevich offered to come up with the emergency funding by essentially advancing money already earmarked for the RTA in the 2008 budget. The CTA’s share would be $24 million.
Blagojevich said the money will stem the immediate financial crisis while he and the General Assembly negotiate a final transit-funding package in the coming weeks.
“I am determined to keep working to find a solution that provides the long-term help to keep mass transit up and running here in the Chicagoland area,” the governor said. “Today, I think, is a good step.”
Blagojevich, however, did not go into specifics about a long-term solution and how far off that might be. He said only that he would oppose a hike in taxes to pay for transit costs.
Sponsors of legislation containing tax increases to fund Chicago-area transit say Blagojevich’s active opposition has hindered their efforts to gather a super-majority needed to enact it in an overtime session and to override the governor’s veto.
Asked about concerns from CTA and RTA officials that his maneuver might not be fiscally sound, Blagojevich said, “I would say that they should not look a gift horse in the mouth — [the money] is nothing to sneeze at.”
The governor later added, “If someone came to me and said ‘Here is $24-$25 million, we want to help you and we also promise to work on a long-term solution, as we’ve been doing for months and months,’ it seems to me, pretty ungrateful if they turn down this help.”
The offer came just one day after the National Transportation Safety Board, in its report on the July 11, 2006, Blue Line subway derailment and fire, issued a scathing critique of the CTA’s track inspection and maintenance program. The board also faulted the RTA for inadequate monitoring of the CTA’s inspection and maintenance.
Long-term concern
CTA officials Wednesday reluctantly recommended that the RTA approve the governor’s proposal. Previously, they said a short-term fix would only delay — and even worsen — the crisis.
“Our concern has always been for a long-term solution,” CTA Chairman Carole Brown said. “While we appreciate the proposal because it helps our riders in the short term, all we are doing is borrowing from next year’s budget. If nothing happens, then we’ve created for ourselves an additional $24 million hole that we are going to have to fill for next year.”
CTA President Ron Huberman acknowledged CTA riders “are very frustrated with doomsday after doomsday after doomsday. I was talking to a CTA employee the other day who has now been told they are going to be laid off on four different dates.”
The House last week rejected a comprehensive mass transit funding bill that would have raised $435 million from increasing the RTA sales tax in the six-county area, and increasing the property-transfer tax in Chicago.
Although lawmakers welcomed the extra time, they wondered on Wednesday why it took so long for the governor to get involved in the issue.
“This has been a looming problem for months and months and he finally wakes up and does not do a whole lot, but he is a little involved,” said Steve Brown, spokesman for House Speaker Michael Madigan (D-Chicago).
“Today’s action by the governor takes pressure off the legislature, and we haven’t done so well operating without pressure this year,” said Rep. Julie Hamos (D-Evanston), chairman of the House Mass Transit Committee.
Hamos added: “It’s sort of like taking your credit card — which you already owe a lot of money on — and getting a big cash advance. You don’t have more money. You just have to repay it later on.”
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Some municipal watchdogs agreed, saying advancing state reimbursements to the CTA is risky because it could lead to even larger deficits, service cuts and fare increases in 2008 and beyond.
“Blagojevich is basically increasing the advance on the credit card to the CTA,” said Laurence Msall, president of the Civic Federation of Chicago. “It does nothing to address the CTA’s employee pension and retiree health-care reforms that are needed.”
Pace officials said they had heard nothing from either the governor’s office or from the RTA on how much, if any, of the emergency subsidy the bus agency would receive. Pace, they said, would continue with plans for its previously announced fare hikes and service reductions.
“We haven’t been included in any conversations. So we can’t comment on what we don’t know we have,” said Judi Kulm, a Pace spokeswoman.
Paces serves approximately 313,000 disabled and elderly paratransit riders in Chicago and the collar counties. The agency plans to increase fares for those riders from $2.25 to $3 in Chicago, and from $2.50 to $3 in the collar counties.
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