CTA girding for a new $35 million whack; service cuts loom

The CTA is facing $35 million in service cuts due to a sharp reduction in tax revenues caused by the recession, the Tribune reports. CTA President Richard Rodriguez told the RTA "that riders could expect roughly a 5 percent reduction in service for each $10 million in new funding cuts," according to the news report.

Ouch. Now this could really hurt. More from the report:

Rodriguez issued a statement to the Tribune on Tuesday saying: "The CTA will continue to look out for the interests of our customers as we deal with the newest budget reduction proposed by the RTA. We assume the RTA applied the same financial diligence they expect of us to themselves and the other service boards.''

Just last month, the CTA filled a $155 million budget hole for this year primarily by transferring cash originally earmarked for station fixups and new buses. The agency also found $15.3 million in internal cuts.

In a CTA Tattler interview Tuesday -- before we knew the severity of these latest cuts -- CTA President Rodriguez indicated that he would consider shifting some federal stimulus dollars earmarked for station fixups to plug any future budget holes. Currently, $14.4 million in in stimulus dollars are set aside [pdf] for rehabbing Cermak and Logan Square stations. 

But he warned there's a big price to be paid for this cost shifting: "The more we delay this (capital and repair) work, the worse our system becomes."

One move I predict we won't see is for the legislature to repeal free rides for senior citizens -- even though that one gesture would cover this $35 million gap. You see, it's very simple -- senior citizens vote.

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  • Don't repeal the free rides for senior citizens, but modify it so that you have to "qualify" for it. By that, I mean you must make have income below a certain amount. In this way, you still keep most of the people that need the CTA service happy. The people that can afford it will by and large not be offended by the move.

  • I seem to remember a number of letters in the Tribune from seniors who said they didn't need the free rides and would prefer to pay their own way on a solvent system. Either repealing those freebies or scaling them back in some such way as Chris suggests would be a very reasonable measure. Since we're talking about the Illinois legislature, I agree that that is the one thing we will not see.

  • Please, please, please introduce a means test. Unlikely that will happen, but it could if seniors themselves led the charge. I think it would be much more palatable to the politicians and their worries about alienating the senior vote if the suggestion of a means test were initiated by seniors themselves. Cheryl has mentioned the seniors in her neighborhood that are not in favor of free rides. I could chat up my father's neighbors at the retirement home with whom I have often discussed Blago's stupidity. Anyone else have any free-ride-resistant seniors in their lives?

  • The C.T.A. can make money by hosting a paid subscription online computer game version of the agency called"Punch Line."Players could make money in the game by submitting jokes about their agency that were rated by other players,

  • Cancel the free rides for seniors. A "means test" would be far worse; seniors who were frugal and saved for their old age are loath to subsidize the rest. (Remember how they attacked Rostenkowski over Medicare catastrophic care?)

  • In reply to MoMo:

    And everyone who pays full fare is FOR subsidizing ALL seniors? I don't see your reasoning for why a means test is not a good solution.

  • In reply to MoMo:

    Just because you're old, doesn't mean you should get a free ride. If poor school children and other poor people can't ride for free, neither should old people. Repeal the free rides for seniors.

  • In reply to MoMo:

    In addition to the free rides comments (Quinn says that free rides is good public policy, despite the fact that the state is $9 billion in the hole, and the transit authorities are in no better shape)--

    --How about the CTA being on the wrong side of the fuel hedge? Despite the fact that ULSF biodiesel sells at the local gas station for about $2.50-$2.90 a gallon, including taxes, the Financial Report posted under the June Board Presentations says that CTA paid $4.40 a gallon for fuel (tax exempt) and the CFO, in effect, pats herself on the back for being under the budget of $4.50 per gallon. However, since fuel expense for revenue equipment was $8.2 million for April, one can guess that CTA blew $4 million just on that item that month. You would think that it would have some incentive to get out from under that hedge, but apparently not.

    --I really doubt that the ARRA funds can be diverted from the uses approved by CMAP and FTA, especially given the construction unions' desire for work.

    --You don't see Carole blogging for funding any more, although she does have a post about the APTA rail conference. Maybe she has to do a real job, now that Lehman Bros. is out of business, or maybe the realization as sunk in that you can't tax out of this crisis, no matter how the RTA tried last year. Getting back to Quinn, maybe he should learn that message. The only way out is to encourage economic growth.

    P.S., no links since I lost some of them this morning, and the prior message that links need approval. My statements are verifiable with a little research.

  • In reply to jack:

    Have you verified that our buses can use the biodiesel you are mentioning? Can enough of it be bought at that price to accomodate our needs for a year? Can it be hedged? I believe we have to hedge some of our fuel costs. Before you make comparisons, you need to know the answers to these questions.

  • In reply to chris:

    That is in fact what CTA uses. CTA was one of the first to use it about in 2002, when it rehabbed the 5800s (now gone) and obtained the 7500s (now also gone) with particulate fuel traps.

    I don't have the exact specifications for CTA, but the ones for Pace contractors says "Ultra Low Sulphur Diesel Fuel with a 10% bio diesel blend." That's exactly what is sold at Speedway. Also, the only thing that can be put in diesel vehicles starting with those built in the 2007 model year.

    You also don't remember the flack a couple of years ago, when Hugo Chavez offered CTA free fuel, and Frank Kruesi said it couldn't use it because Venezuela's is high sulfur and would clog the traps.

    At least the Finance Committee Report on Pace's website says that Pace is saving money on fuel, offsetting other losses. CTA can't say that.

    As far as buying in bulk, one would think that CTA would get a better deal than someone pulling up to the pump at the local Speedway (although Speedway does sell the kind of gas you get when you buy their 2 chili dogs and jumbo soda deal).

    Let me know where any place that sold any type of fuel for $4.40 per gallon, not including tax, to the public for the period from about Dec. 2008 to now.

  • In reply to jack:

    Jack,

    Hawaii sold gas for about $4.40 per gallon. Just saying.

    http://www.realestatewebmasters.com/blogs/mikey/5328/show/

  • In reply to jack:

    You are misrepresenting my question, which was for the period from about Dec. 2008 to now.

    Your source says "gas prices 5/08." May isn't December (except in weddings). Hell, gas sold around here for more than that last summer.

    All you are doing is highlighting the foolishness of the CTA hedge, which apparently was at the top of the market, not the bottom (although diesel was sold retail around here at about $5.00 a gallon around 9/08, including taxes, which was its peak).

  • In reply to MoMo:

    I think that while reduced fare for senior citizens is a good idea, it isn't economically feasible, we cannot be giving anyone free fare while services are being cut. Free fares for anyone is a bit outrageous. Perhaps we should give free fares to college students also, they are also a larger voting block. If you use service you should have to pay for it.

  • In reply to MoMo:

    I'm all for repealing all free rides for anyone but the poorest. With the baby boom generation approaching retirement age, we have to get out of the mindset of giving them everything for free just because they're seniors. We have to do that because we won't be able to afford it in a few years -- the number of retirees will be too close to the number of workers, who will have to pay higher taxes to make up for the lost revenue. Seniors may not think it's fair, but it is reality.

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