CTA riders really haven't liked paying more for multi-day passes, but the agency's number crunchers inaccurately predicted just how much we hate paying more. As a result, the CTA is now looking at a $10 million budget deficit for this year, the Tribune reports:
Transit officials promised to eliminate the budget gap without imposing more fare hikes or cutting service. . .
The deficit is driven by incorrect revenue forecasts mostly involving the use of passes. Those system-generated revenue forecasts, which were produced in December, are off the mark by about $39 million for the full year, CTA budget records show.
The biggest miscalculation involved a nose dive in the use of the 7-day pass since pass prices were increased in January. Seven-day pass sales were below budget projections by $7.5 million in the first six months of 2013, the CTA reported.
The good news is the budget damage was mitigated by an improving economy, as the CTA saw an unanticipated increase in sales tax and real estate tax revenue. From the Jon Hilkevitch story:
Those public funding sources are up $13.2 million through June and are projected to be a total of $21 million higher than budgeted for the full year, officials said.
One thing to remember is that the $10 million budget gap is small compared to the $1.39 billion budget. It equals about 0.7 percent of that overall budget. That's why the CTA will be able to make administrative cuts without raising fares or cutting service.
It's still too early to tell what effect the pass increases will have on next year's budget. I'm a bit pessimistic about the CTA's ability to not cut service or raise fares next year. After all, they had to raise pass prices this year as a partial solution to a $165 million budget gap for 2013. Perhaps the economy will stay strong and more tax revenue will rule the day.
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