With our disgraced former Gov. Rod Blagojevich now in federal prison, it’s instructive to review how he contributed to the CTA’s sad state of financial affairs.
A recent column in Forbes reminds us of how Blagojevich demanded free transit rides for senior citizens before he would sign off on the sales tax increase to fund the CTA. From the article:
In 2008, the Chicago Transit Authority had hit financial difficulties and needed a rescue package to prevent it from running out of money. The legislature put one together that involved a little pain for everybody—a sales tax increase, some benefit givebacks from employee unions, and the expectation of fare increases in the future—and sent it to Blagojevich for signature.
Blagojevich sent the package back with an amendatory veto that nobody in the legislature expected. He approved the rescue package so long as it also mandated free rides, at all hours of the day, for seniors—even on commuter rail. The legislature felt it had no option but to acquiesce, even though this hurt CTA’s finances at exactly the time it needed a rescue.
As a result, the CTA’s collections per ride dipped by several percentage points even as expenses were rising, and the agency threatened a huge fare increase, including taking base fares on the Elevated from $2.25 to $3.00. Yet another financial rescue was needed in late 2009. Blago was gone at this point, but the state’s finances were in a complete shambles, and there was little appetite to offer the CTA bigger subsidies or raise the sales tax again.
So, Governor Pat Quinn put together a package that involved CTA’s parent (the Regional Transportation Authority) issuing capital bonds, and then diverting other funds from its capital budget to cover CTA’s operating expenses. In exchange, the CTA agreed not to raise fares for two years—and again, Illinois closed an operating deficit by borrowing money.
The story goes on to report that today we’re still facing the threat of higher fares if the unions don’t give in on some work rules.
And it all goes back to Blagojevich.