Crain's: How new transpo bill could fund Red Line improvements down the road

Greg Hinz over at Crain's Chicago Business wrote a good recap of the new federal transportation bill and what it means for the CTA -- particularly for its efforts to extend it south to 131st Street and to modernize stations from Sheridan on the North Side all the way through the Purple Line.

As Hinz notes, the bill "has at least three different clauses that should boost Red Line work."

The first clause boosts the amount of money the CTA gets every year from the feds for infrastructure work. The exact hike isn't yet known, but it apparently is $15 million to $25 million a year.

While not a lot of cash, it can be leveraged to issue bonds worth about 10 times that amount.

The really big money, though, is in the “new start” clause of the bill. Specifically, it sets aside $3.8 billion over the next two years to pay for projects all over the country.

Now, “new start” implies building something new, rather than replacing something old. And that's traditionally how the program has worked, though U.S. Sen. Dick Durbin, D-Ill., and then-Rep. Rahm Emanuel were able to get through a special earmark a few years ago to pay for the reconstruction of the Brown Line.

But MAP-21 gives older systems a new way to tap new-start money: All they have to show is that, as a result of the proposed work, the “core capacity” of the bus or train line involved would increase at least 10 percent.

Finally, Hinz draws attention to the Transportation Infrastructure Finance and Innovation Act (TIFIA), which will let transit agencies to borrow cash for up to 35 years at rock-bottom rates - as low as 2.5 percent.  "And the amount that can be borrowed is as much as 30 times the available repayment revenue stream," Hinz writes.

He also writes about the bad news  - but I'll let you check that out on your own. The column is definitely worth a read.

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  • I had read that one before, but it brings up the issue raised when you said sales tax bonds were not sales tax money (a distinction not even CTA now makes), i.e.--if formula money is used to leverage borrowing (instead of the present borrowing against federal money to be received in the near future, such as under the Brown Line New Start), the transit authority borrows under TIFIA (which CTA said it was doing for the 95th St. bus terminal), etc., someone has to find a way to pay it back. Claypool seems to have dug up the money to start some of these construction projects, but the other shoe will drop eventually. Emanuel is already complaining that Daley left the city with too much debt that is now coming due, but his folk at the CTA look like they are setting up the next time bomb. At least with the pension bonds, the Real Estate Transfer Tax was set up to back them, but nobody at CTA Financial will tell you that that's the reason CTA can't balance its budget, except with gimmicks.

    This is piled onto the mountain of debt and lease obligations at the back of the CTA budget, which doesn't state clearly what's the source of funds to pay those obligations, either.

  • In reply to jack:

    Never forget the popular and profitable $300M+ SuperStation at Block 37, from where you can be whisked in about 30-35 min to O'Hare and Midway......

  • Or the $250 million job to eliminate slow zones on the Dan Ryan branch in 2007.

    But most in point, we are still paying off Illinois First bonds for the NABIs being hauled to the scrapper (about $50 million worth).

  • I'm sure Mike was referring to waste, but to take this in a slightly different direction, a WBEZ blog looks into transit that wasn't built. Some projects are familiar, others are not. Apparently more episodes to come.

    If WBEZ is around in 2050 (and most of us probably won't), I suppose the Red Line 130th St. extension will be on it. Definitely can add on the Orange, Yellow, and Circle Line New Starts, with, of course, the Airport Express and the Daley Maglev.

  • I think the CTA needs a full revamp in general. Here's my take on it. Let me know what you the CTA expert thinks. http://www.chicagonow.com/poli-chi/2012/09/the-politics-of-public-transportation-how-to-fix-the-cta/

  • In reply to Barb Moreno:

    I won't until you reinstate the regular comments and get rid of the Facebook ones.

    But, basically, the South Side got the benefit of this, including the split of 111/115.

  • In reply to Barb Moreno:

    Like Jack and Scooter, your thoughts on the 11 bus vs 74 are based incorrectly on 1 stop. The 11 bus has high ridership, just possibly not a lot of boardings at that stop.

    Stopping owl service on trains is not good for those who don't work 9-5.

    Your idea of TIF reform is great. Not sure if the money can be easily applied to CTA, but it does need fixing.

  • In reply to chris:

    You need to have better reading comprehension!
    I was defending keeping the 11 bus & said: "2. She bases her entire argument on how many people board the 11 vs the 74 at the Fullerton L station.
    Totally absurd!"

  • In reply to ScooterLibbby:

    I think chris got your point and agreed with it.

    chris: I hadn't said anything about Lincoln one way or the other, but that's not here nor there.

  • In reply to ScooterLibbby:

    As Jack pointed out, I agreed with you so I'm not sure I'm the one that needs better reading comprehension.

    And yes Jack, it looks like you didn't comment on the 11 in this thread.

  • 1. I agree with you on requiring Faceplant to comment.

    2. She bases her entire argument on how many people board the 11 vs the 74 at the Fullerton L station.
    Totally absurd!
    Few people take the L & then transfer to the 11 bus. Most take it to go shopping, the doctor & work.
    They travel less than 2 miles for the most part.

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