CTA budget proposes $23M in cuts, fare increases after $33M cut in state support

Posted on November 22, 2017

The budget will also include more than $23 million in budget cuts and reforms to maintain service levels in the coming year.
Daniel Schwen
The budget will also include more than $23 million in budget cuts and reforms to maintain service levels in the coming year.Daniel Schwen
The Chicago Transit Authority (CTA) proposed a balanced $1.51 billion operating budget that preserves bus and rail service levels while continuing historic investment to modernize the CTA and improve the customer experience. Following a reduction of $33 million in state support, the spending plan makes significant cuts and reforms, and includes a modest increase in CTA’s base fare and the price of a 30-day pass.

Every dollar generated by the fare increase is equal to a dollar in savings and reforms CTA is making in the budget. Upon adoption, the fare increase will generate $23 million for CTA operations, while the capital budget includes a new revenue stream from ride-hailing fees that will pay for projects that improve CTA infrastructure and service. The budget will also include more than $23 million in budget cuts and reforms to maintain service levels in the coming year.

“This balanced budget reflects CTA’s commitment to modernizing and improving its bus and rail system to ensure that it provides customers with 21st century public transit services,” said CTA President Dorval R. Carter Jr. “It has been over eight years since CTA has instituted a fare increase and it’s a decision we don’t take lightly. But after working hard to find $23 million in savings and reforms, it is clear we need to raise revenue to overcome the major cut in state funding.”

The CTA is also proposing a $2.7 billion five-year capital budget for 2018-2022, continuing more than $8 billion of historic transit investment completed, begun, or announced by Mayor Rahm Emanuel since 2011. Those projects include rehabilitating rail stations and building new ones, modernizing rail and bus fleets, removing rail slow zones, and adding new technologies — work that improves reliability, reduces commuting times, strengthens safety and security, and improves the overall commuting experience.

The 2018 budget preserves the robust bus and rail service that customers receive today, including expanded bus and rail service put into place in the last couple years.

Every dollar generated by the fare increase is equal to a dollar in savings and reforms CTA is making in the budget.
Every dollar generated by the fare increase is equal to a dollar in savings and reforms CTA is making in the budget.

Changes in base fares

The CTA has held the line on fares since 2009 — something achieved by no other transit agency in the U.S. during that time. Since 2011, the agency has accomplished this through strategically pursuing management efficiencies and achieving cost savings through reducing ongoing maintenance needs by modernizing the fleet, pre-purchasing diesel fuel and electricity at historically low levels, and through responsible spending practices.

The CTA in crafting its 2018 budget was faced with an unprecedented challenge in the form of a reduction in state funding of $33 million. This critical funding which supports CTA’s day-to-day operations represents the equivalent of the annual cost of about 50 bus routes.

As a result, for the first time in nine years, the CTA has proposed a modest increase in its base fare of 25 cents and a $5 increase in the 30-day unlimited ride pass. The new base fares of $2.50 for rail and $2.25 for bus allow the CTA to maintain and improve current levels of bus and rail service, while improving the customer experience. The 25-cent increase is well below the rate of inflation since 2009. CTA also proposes a $5 increase in the cost of a 30-day pass. As required by federal law, reduced-fare rides will continue to be roughly 50% of base fares, which translates to an increase of 10 to 15 cents.

All other fares and passes — including student fares — would remain at the current price.

These increases are expected to generate $23 million — all of which will support CTA daily operations.

Chicago ride-hailing fee to help support capital improvement projects

CTA will also receive support for its capital improvement projects via the City of Chicago’s ride-hailing fee — the first such fee of its kind in the U.S. — which is dedicated solely to transit capital investment. Due to the absence of a state capital program and with competition for federal funding increasing, this new source of funding is critical to allow CTA to continue investing in the modernization of its infrastructure.

The CTA continues to look beyond the farebox to support operations through other revenues, like advertising, retail concessions and other non-fare related sources.

Despite the funding challenges CTA faces to meet its modernization goals, the proposed 2018 operating budget is balanced for the seventh straight year and its capital budget preserves the historic level of transit investment that will serve the Chicago region for generations to come.

CTA in 2018 will continue to pursue long-term priorities which focus on improving service to customers. The agency will continue to make extensive investments in its bus and rail system – including some of the largest station, signal, and track reconstruction projects in CTA history, such as the Red-Purple Modernization project, a $2.1 billion investment to modernize and add capacity to the CTA’s busiest rail corridor. CTA will also continue to enhance the overall customer experience by investing in public art at our rail stations.

The agency has set a public hearing to discuss the proposal.

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