Saturday, February 3, 2007

MBC Plan: DOA In The General Assembly?

Greg Hinz has an article in today's Crain's Chicago Business that all but pronounces the proposal by the Moving Beyond Congestion proponents for an extra $225 million in operating subsidies in 2007 dead on arrival in the General Assembly.

The thrust of the article is that the key State leaders have higher priorities than transit. Senate President Jones is focused on education funding, Speaker Madigan is focused on government employee pension obligations and Governor Blagojevich is focused on health care.

The articles states that "at a minimum" the RTA and the Moving Beyond Congestion proponents are likely to seek about $150 million a year in new money to fill holes in the operating budges of the three service boards, the CTA, Metra and Pace.

This figure may be too low because it ignores the State subsidy for paratransit service, which in the RTA's budget brings the total request for new money to $225 million. Alternatively, Hinz is privy to a plan by the MBC proponents to come to the General Assembly with a package of cost cutting measures in order to soften the pain from the new money request. Hinz's statement later in the article that the CTA has resisted detailing service cuts if no bailout package in approved suggests that his math is incomplete.

The article notes the City/suburban political fault line that may prevent a bailout this legislative session, observing that "the mayor [of Chicago] has made it clear he opposes tying new funds to a shift of power from the CTA to the RTA" while "some transit experts and suburban leaders argue that only a strengthened RTA can fully monitor spending and set regional priorities."

The stage is being set for some interesting political brinkmanship. Now that Pace has taken over the region's paratransit service its appetite for new public subsidies has increased dramatically. Thus, the suburban public officials have a greater incentive to work with the MBC proponents on this legislative push for more funding.

If funding for paratransit service can be secured separately, however, then suburban officials may be sorely tempted to let the CTA face the music and cut service and raise fares. (Metra can do fine if its raises fares a bit.) Then the City of Chicago can maintain its control over the CTA and take the heat for the shrinkage of the CTA system.

It will be up to the RTA to try to keep its MBC coalition together is the face of these competing interests. Given the RTA's long-time allegiance with Metra and suburban public officials, holding together this coalition will require the RTA to undergo a cultural change of its own.

Hinz' assessment is as follows:

The best odds are for a capital plan, because it's politically tied to new money for highways. Operating assistance is a harder sell unless the CTA unveils extremely deep service cuts, something it has been reluctant to do so far.

This might not be much of a solution. The service boards would be inclined to convert any extra capital funds to cover their operating deficits, something they have been doing the past several years. This only postpones the inevitable point where the operating deficit can no longer be bridged, even by raiding the seed corn.

After several years when it has allowed the service boards to use operating funds to cover operating needs, would the RTA board have the gumption to say no when the service boards wanted to use new capital dollars to stave off service cuts and fare increases. It is doubtful that the board would do so. At a minimum the Chicago representatives and the CTA Chairman likely would exercise their precarious veto power to block approval of an RTA budget that denied the service boards the right to tap into capital funds to pay operating expenses.

If, however, the General Assembly conditioned new capital investment in public transit upon a requirement that the new capital funds not be converted to cover operating expenses then the region could face the difficult choices of how much public transit service it wants rolled out in the region. In other words, we might get newer buses and train cars but less service.

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