November 14, 2016
Budget holds fares flat despite increased expenses and lower revenues
(CHICAGO) In an analysis released today, the Civic Federation announced its support for the Chicago Transit Authority’s proposed FY2017 operating budget of $1.52 billion. The budget holds base fares flat and continues to make strategic capital investments despite ongoing state funding uncertainty. The full 55-page analysis is available here.
As detailed in the report, the structurally balanced budget does not rely on one-time revenue sources or service cuts despite declining fare revenue. Reflecting national trends, the CTA is facing reduced ridership and is surveying riders to understand why. The Transit Authority is still working to improve rider experience through fleet modernization, service level improvements and improved accessibility and security.
“Rather than increase fares, cut service or resort to the use of shaky financial practices to respond to decreased fare revenue, the CTA has presented a sensible, measured plan that prudently manages expenses and leverages non-fare revenues to make important investments in the system,” said Civic Federation President Laurence Msall.
The Civic Federation supports a new transit tax increment financing (TIF) district to increase local capital funding for transit and enable the CTA to secure $1.1 billion in federal grants. The increased funding will allow the CTA to move forward with significant infrastructure improvements, including the red and purple line modernization project.
Among the Federation’s concerns are a substantial capital funding gap that continues to grow, the long-term stability of the pension fund and CTA’s overly optimistic state-funding projections amid the ongoing state budget impasse.
Added Msall, “Because the State of Illinois is in its seventeenth month without a comprehensive, balanced spending plan, all of our local governments are faced with increased pressure to do more with less.”
In order to maintain financial stability in the long-term, the Federation recommends that the CTA take a number of steps to improve operations and to meet the transit demands of the region. These include working with the Illinois General Assembly and Governor to re-evaluate the state mandated free and reduced fare program and to make reforms to the pension fund, improving the transparency of Transit Authority operations, updating financial policies and exploring alternative fare options.