Wednesday, May 30, 2007

Representative Hamos' RTA Funding Proposal--First Look

Here's the results of a half-hour glance at the funding component of Representative Hamos' RTA reform bill, Amendment No. 2 to Senate Bill 572.

-- Establishes and fund an Innovation, Coordination, and Enhancement Fund. The Fund will have $30 million the first year and that funding will increase by 3% annually.

-- Exempts $200 million in costs from the recovery ratio calculation in FY 2008. This will make it much easier for the service boards to meet their recovery ratio requirements and the RTA to meeting the 50% recovery ratio requirements. After FY 2008 this plug number goes down by $20 million a year.

-- Increases the Cook County RTA tax from 1.0% to 1.25% and the collar county tax from 0.25% to 0.75%.

-- Imposes a real estate transfer tax in the City of Chicago only of $1.25 for each $500 of value. The Moving Beyond Congestion Final Report (pg. 94 of 140) indicates that this would raise approximately $232.5 million annually. (Interesting that this is almost equal to the CTA's projected 2007 operating deficit of $226 million.)

-- Makes major changes to the statutory formula for the distribution of RTA tax revenue in new section 4.03.3. These changes include:
  • Currently, the RTA takes 15% off the top of the sales tax collection throughout the six-county region. Much of this money becomes RTA discretionary operating funds that the RTA funnels to the CTA. Under the bill the RTA's share from the collar counties would be 15% of one third of the tax collected in the collar counties. This would have the effect of keeping the collar county contributions to the RTA at current levels even though the RTA tax rate in the collar counties will triple.
  • The current allocation formula among the service boards for the money left over after the RTA takes its cut remains unchanged in Chicago and in suburban Cook County. In the collar counties, the current allocation formula applies to only one third of the collar county tax receipts. This has the effect of keeping the amounts distributed to Pace and Metra from the collar counties by statutory formula at current levels. Suburban Cook County, it appears, will be paying more to the service boards via statutory formula, further cementing its role as bankroller of the transit system.
  • The collar counties will each keep the remaining third of their RTA tax collections--roughly $125 million--for road and transit purposes at the discretion of each county board.
  • All of the Chicago real estate transfer tax money plus other money collected in suburban Cook County and the collar counties will be put in a pot and then distributed in the following order: ADA paratransit; the Innovation, Coordination, and Enhancement Fund; to the service boards as follows: CTA--60%; Metra--30%; Pace 10%.
This is just a quick look. There is nothing on the capital side. As of this evening the two amendments were assigned to the House Mass Transit Committee.

4 comments:

Anonymous said...

I would like to turn back to the Auditor General's management audit of the RTA for a moment. The report details serious financial trouble at the CTA, Metra and Pace - including CTA's pension funds which could run out of money this year. Worse still, the AG also found that these severe financial problems were not discernable in the RTA's budget and financial reports. Meanwhile, the Government Finance Officers Association (GFOA) routinely gives the RTA awards for excellence in financial reporting. So what do the folks at GFOA look at in determining excellence?

Anonymous said...

Better yet, WhoisGFOAChicago.Com?

Anonymous said...

You-hoo

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