* The Tribune ran an editorial yesterday about pending CTA fare hikes and blamed much of the problem on Gov. Rod Blagojevich…
More evidence came Monday that Gov. Rod Blagojevich’s efforts to buy off the electorate voter by voter come at a real, significant cost. The Chicago Transit Authority announced it will eliminate 80 more jobs. Fare increases and service cuts could be on tap for next year.
Why? Several reasons. But here’s a big one: Blagojevich insisted that the CTA and other state transit agencies give away their services to certain people.
Last week, Blagojevich signed a bill that requires public transit agencies to provide free rides for poor people who have disabilities. Earlier this year, he insisted on those agencies give free rides for senior citizens. (The Chicago City Council also got in the act, telling the CTA to give free rides to soldiers and disabled veterans.)
Meanwhile, Blagojevich has cut the state funding that transit agencies counted on to help pay for free and discounted transit rides. That’s putting a squeeze on the people who have to provide the services the governor loves to give away.
Providing free rides will cost the CTA $34.5 million in 2009. Blagojevich just took away $32 million in annual state subsidies to the CTA intended to offset reduced fares.
The total squeeze for 2009: $66.5 million.
* Yesterday afternoon, Mayor Daley blamed the governor for any CTA fare hikes next year…
Daley is pointing at the free rides for seniors as a reason the CTA tightened its bureaucratic belt by another $40 million this week to lay the political groundwork for a fare hike and service cuts.
Daley said Tuesday the agency’s financial woes can be blamed partially on the governor’s veto of the state’s reduced fare subsidy, and his executive order mandating free rides for low-income people with disabilities. He said those problems were exacerbated by the Chicago City Council’s decision to extend the freebie to active military personnel and disabled veterans.
* The governor’s office shot back at critics…
“To think that a $66 million program in a $1.2 billion budget is causing all this is hard to believe. It amounts to two-to-three-cents-a-rider. They’re using seniors as a scapegoat. It’s just not right. It’s not fair,” [Blagojevich spokesman Lucio Guerrero] said, suggesting that the CTA follow the state’s lead and cut jobs instead of raising fares.
* And added…
Guerrero argued that the slumping real estate market, declining retail sales and rising fuel costs are even more responsible for the CTA’s budget crisis. The CTA expected the real estate transfer tax hike to produce $7 million in May. The actual take was $2.7 million, he said.
* Guerrero appears to be correct. According to the CTA itself, May sales tax receipts were $1.8 million below budget, and real estate transfer tax receipts were $4.3 million below the average monthly budgeted amount.
Those two factors alone work out to an annualized budget shortfall of $73.2 million.
* Also, according to the CTA itself…
The primary drivers of the deficit for the month and year are higher labor and fuel expense.
* And then there’s this from the same report…
By contrast, fare revenue continues to exceed budget due to higher ridership and a higher average fare.
In other words, they’re bringing in even more fare revenues than expected despite the free rides.
* The bottom line is this: Yes, the free rides and the governor’s veto of subsidies has probably hurt the CTA’s budget. But those factors don’t appear to be the sole or even the most significant source of the problem.
Disappointing tax receipts - from the stalled housing and retail economy along with people leaving Cook County to shop - appear to be the real problem here.
* Related…
* CTA plans comment sessions - Public can discuss good, bad about city’s transit agency
* Free rides remain popular among seniors
* Raw audio of Daley’s press conference