October 14, 2009

Chicago Transit unveils budget recommendations

In presenting his budget recommendation for 2010, Chicago Transit Authority (CTA) President Richard L. Rodriguez said that a 30 percent loss of public funding contributed to a $300 million shortfall and staff reductions, mandatory furlough days and strict controls on spending along with transferring capital funds to operating will be necessary to help fill the gap.

The remainder will come from service efficiencies and fare increases, although the CTA will also continue to seek action from its unions and the General Assembly to identify additional savings and reduce the impact on customers.

The CTA identified three areas that have contributed to the shortfall: declining public funding, union contracts and pension obligations.

In 2010,  the agency's public funding will be $213 million lower than the RTA's original projections. The public funding is generated from sales and real estate taxes and both are down due to the recession.

Current labor contracts call for a 3.5 percent union wage increase this year and pension bond interest and employer contributions are scheduled to increase.

"Faced with declining revenues, our challenge is to manage responsibly and make strategic budget decisions that will enable CTA to weather the recession, operate more efficiently, and still provide the critical services that so many working men and women rely on," said CTA's Rodriguez.  "We have evaluated numerous options to cover the shortfall. It was only as the very last resort that we were forced to consider fare and service changes, something I had hoped to avoid," he added.

By making difficult choices, Rodriguez added, the CTA was able to reduce expenses and generate enough new revenue to propose a balanced budget of $1.285 billion dollars.

To minimize the impact of a slow economy on riders, the CTA has already cut $50 million in spending this year through management improvements and efficiencies.

The CTA's proposal is designed to retain as much service as possible, while reducing costs and maximizing efficiency.  The only route eliminations proposed are nine express routes that have corresponding local service.

All parts of the region that have CTA service will continue to have it. Savings will be realized through less frequent service and service that might start later in the morning or end earlier at night.

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