November 7, 2018
Organization also expresses concerns about ridership declines and lack of state funding
(CHICAGO) In an analysis released today, the Civic Federation announced its support of the Chicago Transit Authority’s proposed FY2019 operating budget of $1.6 billion. Despite continued shortfalls in state funding, the proposed budget does not include any fare increases or service cuts. The full analysis is available here.
While supporting the proposed budget as a reasonable one-year plan, the Federation has significant concerns about the CTA’s ongoing decline in overall ridership, which is down nearly 11% over the last decade. Due in part to ridership declines—along with unanticipated state funding reductions—the CTA relied in FY2018 on $17.5 million in short-term borrowing to close the previous year’s budget gap.
The CTA has paid off the borrowing and will not use short-term borrowing again in FY2019. However, the Regional Transit Agency (RTA) continues to direct the CTA to rely on historic levels of state funding that have not fully materialized since 2015. In addition, both the FY2018 and FY2019 state budgets reduced funding to the Public Transportation Fund and imposed a surcharge on RTA sales tax receipts. Illinois has not passed a comprehensive capital funding bill since 2009, which previously provided approximately $200 million annually in much-needed capital dollars to the CTA.
“Unfortunately, the CTA and other key transit agencies continue to be neglected by our state government,” said Civic Federation President Laurence Msall. “The stark reality is that the CTA has severe capital and deferred maintenance needs that will only continue to grow, and they should not be expected to cover these costs using the farebox and local sources alone.”
Despite the ongoing shortfalls in state funding and drop in ridership, the CTA and the City of Chicago have worked to improve the transit experience by making investments to modernize the CTA’s fleet of bus and rail cars and improve service levels, accessibility and security in order to better compete for ridership with alternative transit options. The Federation is encouraged that the CTA plans to make additional improvements in FY2019 while keeping fares flat through savings and efficiencies and increased non-farebox revenue. The creation of the transit TIF district and the City sharing a portion of the ground transportation tax on ride-sharing vehicles for capital projects are innovative responses to the state’s continued abdication of its responsibility to transit agencies in Illinois.
“The ingenuity shown by the CTA and the City in their effort to grapple with continued underfunding is commendable,” said Msall. “However, this level of locally derived tax support is quite limited and, absent additional state investment, will seriously jeopardize the financial viability of Chicago’s existing transit infrastructure.”
The Civic Federation recommends the CTA explore a peak-hour-based fare structure and increased fares for express bus service as a method of generating increased revenue during a time of declining overall ridership but increasing rush-hour ridership.
Additionally, the Civic Federation believes that in order for the CTA, Metra and Pace to continue to function as key economic assets of the Chicago region, the state must exercise its responsibility to provide essential operating and capital support and the RTA must exercise its authority to provide essential oversight and additional support to the three service boards. The state must develop a capital improvement plan that adequately funds transit needs across Illinois.
The Federation further suggests that the Chicago region may be better served by a truly integrated regional transit agency that serves the entire region and promotes coordination rather than competition, encourages reasonable planning and recognizes the financial condition of the State of Illinois.