Friday, December 1, 2006

Civic Federation Fed Up

Civic Federation Fed Up

The CTA's finance department must be a hardy bunch. Despite recent ridership increases the CTA's financial condition steadily worsens, forcing them to use precious capital funds to pay the bills. The CTA's pension plans is going broke by 2012. Labor costs rise steadily, but the CTA is unable to obtain significant work rule and other money-saving concessions at the bargaining table. The CTA's primary sales tax funding base--the City of Chicago--has been growing under the rate of inflation for years. As a result, the CTA is dependent on RTA discretionary funds, a precarious position both financially and politically. To avoid going insane the good folks in the CTA's finance department probably have to unplug their phones and computers pretty regularly just to stop the flood of bad news for awhile.

The Civic Federation's November 8th report ("Report") on the CTA 2007 Budget is generally pretty positive about the CTA's efforts to stay afloat. The Report notes that the CTA has decent productivity scores and appears to be managing the size of its workforce. The Civic Federation shares the CTA's frustration at the July 10, 2006 labor arbitration award that granted pay raises to the unions but apparently ignored the CTA's request for work rule and pension system changes that would help stabilize the CTA's financial condition. The Report calls for increases in transit funding and a revamping of the RTA's formula for allocating operating subsidies to the service boards, both music to the CTA's ears. In a clear swipe at the RTA, the Report criticizes those who view the RTA formula for distributing operating subsidies as "immutable and should never be changed."

Nonetheless, the Report does fault the CTA for proposing a budget without either a way to plug a $110 million deficit or a contingency plan for cutting costs and service if the hoped-for bailout is not forthcoming. Frank Kruesi must feel he is caught in the Catch 22. Two years ago he was widely criticized for proposing a "doomsday" budget outlining how the CTA would implement $50 million or less in cuts. The criticism was that he was using scare tactics to extract cash from the General Assembly. Two years later he is criticized for not outlining a "double doomsday" budget, this time bridging a budget gap of over $100 million.

The Civic Federation is correct that CTA and the other service boards should fairly and accurately outline the consequences of not closing the service board operating deficits. The public and the General Assembly should know the nature and shape of these impacts. They might find, for example, that a scaled-down regional transit system is preferable to spending ever more in operating subsidies. Alternatively, they might be galvanized to pour money into the regional transit system, without strings attached and without any changes to the current funding, governance or operating practices. This appears to be the goal of the Moving Beyond Congestion project. Ideally, the public and the politicians will reject the MBC's business as usual approach to effect truly significant changes to the way this region does transportation.

It is thus understandable that despite the kind words directed towards the CTA's financial team, the Civic Federation is fed up at the lack of a real budget within the current means available to the CTA. A Springfield bailout on the scale sought by the MBC folks is far from a done deal.

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