Will 2013 CTA budget include fare hike, service cuts? My predictions

As some of you readers have noted, the CTA has not yet submitted its budget for 2013. The agency board meets tomorrow, and the 2013 budget is not on the agenda, though the budget recommendations may still be released.

It’s unprecedented for the CTA to wait this long to present its budget. Last year, President Forrest Claypool outlined the budget at its October meeting, and the board approved it in November. There were public hearings in early November. So the schedule for approval will be more compressed this year.

As you may recall, there were no fare hikes or service cuts in that 2012 budget proposal. But there was a $160 million funding gap that Claypool said at the time would be closed with savings earned through negotiating new work rules with various unions.

As it turned out, the CTA didn’t have that big of a budget hole, and was able to plug it this year with lower costs on fuel and materials, more revenue from increased ridership and some more bucks from the Regional Transportation Authority.

And there were no fare increases this year. However, some bus service is set to be cut on Dec. 16, and service will be added to train lines and some buses. But that was all budget neutral.

So what will happen with the budget next year?

I’m not much of a betting man, but here’s my simple prediction:

  • No fare hikes.
  • No service cuts.

CTA will rely on more revenue  from:

  • Increased ridership
  • A better economy (more sales tax and property transfer tax dollars).
  • Deals it made this year with savings that will be realized over a full year.
  • Union work rule changes, such as with the iron workers union and 12 trades unions.

And that doesn’t include added bucks it stands to save on work rule changes for its biggest unions – for the bus and rail operators.

We will know soon enough whether my crystal ball is cloudy or clear.

 

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  • The problem is that section 4.11(b)(1) of the RTA Act, 70 ILCS 3615/4.11, says: " Not later than the next preceding November 15 prior to the commencement of such fiscal year, each Service Board shall submit to the Authority its proposed budget for such fiscal year..."

    So, basically you are saying that CTA has made it impossible to comply with the law. Of course, the RTA being a late a month setting marks because the city directors threw up a roadblock didn't help either. But mid-December is not November 15.

    It is amazing how contemptuous of the law CTA administration has become. And, of course the people (Emanuel and Quinn) who appointed this CTA Board.

    The might have to go to the provision that 12 members of the RTA board will have to adopt a budget for the CTA.

  • In related news the Tribune has a story about paratransit, saying that "Claypool is expected to present the 2013 CTA budget Thursday" and "With 2012 almost over, the CTA finds itself in a serious budget predicament. In this year's budget, agency management assumed, incorrectly, that it would achieve labor union work-rule concessions totaling $80 million to help erase a $277 million budget deficit. But the Amalgamated Transit Union, which represents CTA bus drivers, train operators and other workers, has rejected any significant money-saving changes in contract negotiations that have dragged on for months, according to sources on both sides."

    But apparently Claypool figured out one thing that I said when the legislation saying that paratransit gets what it needs off the top was proposed: there would not be efficiencies, and it would squeeze the fixed route budget. The article mentions that CTA unloaded that on Pace in 2005, and I stated before that Carole Brown made a mistake by claiming that the deficit was then caused by paratransit and went along with that. But that's what happens when certain service boards have certain legislators in their pocket.

    Maybe with another year or two of this mess, the whole thing hopefully will be blown up.

  • When are these fools going to realize that small & regular fare increases are far better than infrequent & large fare increases?

  • You honestly think the economy is going to improve with obama in office?

  • In reply to ibilldavis:

    The other service boards--which got their proposed budgets out on time despite the RTA not giving them final marks--said that sales taxes have rebounded to 2008 levels. So, somebody is spending money.

    The real issue is does anyone now honestly believe that CTA can manage its business?

  • In reply to jack:

    Returning to recessionary levels isn't much of a rebound. I can't help but think they're hedging -- "rebounded" sounds rosy now, but in a few months, they can still cry poor.

  • In reply to darkwing:

    2008 refers to when the RTA got the tax hike, and pretty much predates the recession starting later on that year.

    Pace has frequently said that if sales tax revenues during 2009-2010 [the depth of the recession] came in as predicted in 2008, it would have been expanding service instead of hanging on.

    Of course, CTA will be crying poor, but I bet won't admit it is caused by mismanagement. Besides what I cited above, Crain's had articles indicating that last week the ATU was confident of a settlement, but this week isn't, and is throwing the contract into arbitration. Wonder what happened in a week?

  • In reply to darkwing:

    2008 is consider pre-recession. If the sales taxes have rebounded to that point, I would say that is a good thing.

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    In reply to ibilldavis:

    The economy already HAS improved with Obama in office.

  • In reply to ibilldavis:

    Yes, I do. It already has. Open up your eyes and look at the numbers instead of still believing that the sky is falling. Housing has settled and rebounding, and employment rate is improving.

  • They've postponed the budget release because apparently there is movement on the union negotiations.
    From Crain's:
    "Negotiations have been ongoing since early this morning, and have progressed far enough. We want to see if we can stay at the bargaining table and make more progress," CTA spokesman Ryan Steele said. "Things were moving in a positive direction."
    http://tinyurl.com/cc44s98

  • In reply to ScooterLibbby:

    Didn't sound that positive in the Tribune article, especially "Thursday's developments do not necessarily represent a break-through, Steele said."

    Doesn't excuse being a month late on the budget, either.

    Apparently, also Brian, not Ryan.

  • More money wasting at the CTA.
    Now they've moved some Novas to North Park.
    I saw 6703, run P323 on Devon as a 36 just 20 minutes ago.

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