Facing a budget deficit, the Chicago Transit Authority this week announced it would cut 80 administrative jobs, defer non-critical spending on bus maintenance, and undertake other cost-cutting measures to save $40 million.
The savings will allow the CTA to avoid a fare increase or service cuts to balance its budget, officials said at a news conference on Monday. However, those two options remain on the table if needed for the 2009 budget. The CTA has projected its deficit for 2009 at about $66 million.
The Regional Transportation Authority, which provides oversight of the CTA, blamed the budget struggles on the economy, record fuel costs, and on the lack of new capital funding from the state for the last four years. The Illinois House will meet today to consider leasing the state lottery to help fund a new capital program.
“The RTA, CTA, and the other service boards have all taken steps to identify savings and boost revenue, but the lack of adequate capital funding has exacerbated these financial challenges,” the RTA said in a statement. “Efficient, modern equipment would save operating expenses and allow the CTA, Metra, and Pace to more effectively manage transit services.”
The CTA did receive a new cash infusion for operating costs from an increase in its sales tax earlier this year, but the agency also must cover the $30 million cost of providing free rides to seniors and low-income riders with disabilities. Those measures were required by Gov. Rod Blagojevich in order to win his signature on a transit bailout package approved by the General Assembly earlier this year.
That legislation included approval for the CTA to issue nearly $2 billion of revenue bonds to improve its pension funding ratio and to establish a health care trust for its other post-employment benefits. The issue sold earlier this summer. The legislation also paved the way for a sales tax hike and an increase in Chicago’s real estate transfer tax. The CTA will receive about $200 million from the $500 million in increased revenue in future years and $120 million this year.
RTA officials also warned this week that at least $5 billion in capital aid is needed for the next few years and the lottery lease-backed capital budget would likely fall short of providing that level. The governor most recently proposed a $25 billion plan, but his version also relied on expanded gaming.
