Chicago-Area Transit Band-Aids Won’t Stop the Bleeding

Published December 1, 2007

Hemorrhaging red ink, the Chicago-area mass transit system has avoided yet another threatened “doomsday” of fare increases and service cuts … by borrowing against future revenues and digging itself a deeper hole.

As Illinois Gov. Rod Blagojevich (D) and the Democrat-controlled legislature remained locked in personal rancor, no long-term solution appears ready to emerge from the state before the next threatened doomsday–November 4–rolls around.

Since spring, mass transit riders in the Chicago area have been besieged by repeated threats of fare increases and service cuts unless the state comes up with “assured funding” for mass transit. On the table are a region-wide sales tax increase and a significant increase in Chicago’s real estate transfer tax, as well as new gambling casinos.

Of most immediate concern is the current $226 million operating deficit rolled up this year by the Regional Transportation Authority (RTA), a six-county transit agency, and its service units–the Chicago Transit Authority (CTA), which provides rail and bus service for Chicago and inner suburbs; Metra, the commuter rail lines radiating out to the exurbs; and Pace, the suburban bus and regional paratransit operator.

Many Concerns

A more far-reaching concern is the fear that current funding sources will be insufficient to keep perennial funding crises from the door in future years. Also of concern is an underfunded capital budget, already made thinner because of raids for operations and maintenance. Beyond that are demands by suburban Republicans for more capital funds to repair and expand roads and bridges.

The conflicting demands, aggravated by personal animosities among key lawmakers and the governor, have left the system and its riders in limbo for months.

A simple majority vote of the legislature was all that was needed for Democrats to pass a plan, but a May 31 adjournment date for the regular legislative session passed without any action. That meant any action during the following “veto” session would require a supermajority, thus requiring a more difficult, bipartisan solution.

Sellout of Suburbanites?

Comments by State Rep. Mike Tryon (R-Crystal Lake), who represents part of McHenry County, which falls within RTA boundaries, demonstrate how difficult achieving a bipartisan solution may be.

In a September 27 press statement Tryon said, “McHenry County residents would have been on the fast track to nowhere if Senate Bill 572 would have passed the General Assembly. The legislation would have increased the sales tax in McHenry County by half a cent, without offering any improvements to the mass transit services offered in McHenry. The sales tax revenue per capita in McHenry County is approximately $30; this bill would have hiked it up to $90 per person, which is almost what Chicago taxpayers are paying now.”

Tryon noted less than 1 percent of the McHenry County population uses mass transit. He called the legislation an apparent power grab at the county’s expense. The legislation would have restructured the RTA governing board, forcing McHenry and Kane Counties to share a representative.

“This paints the perfect picture of taxation without representation and would have been drastically unfair to my district,” Tryon said.

Continuing Money Troubles

In September the governor proposed a $91 million “loan,” actually an advance of next year’s state aid to the RTA. However, CTA’s $24 million share of the cash advance would not be enough to stave off the November 4 fare hikes and service cutbacks, according to CTA President Ron Huberman. Moreover, he said, without the “permanent” solution, next year would bring an even worse doomsday that would make the current one look mild.

Next year’s CTA budget problems will be aggravated by $40 million for retiree health care benefits that for the first time must be paid from the operating budget. The new payment was required by state law in response to CTA’s dire pension problems.

Blagojevich has proposed a statewide infrastructure bill that would provide $25 billion for roads, schools, and bridges, and another $200 million loan–Blagojevich this time called it a “down payment”–to the transit agencies to fund operations through 2008.

This, the governor said, would allow more time for a long-term solution to be worked out.

Proposed Gambling Expansion

Blagojevich would fund his program by allowing a land-based gambling casino to be built in Chicago and by increasing the number of state riverboat casinos from nine to 11.

The plan has received a chilly reception from powerful House Speaker Michael J. Madigan (D-Chicago), one of the governor’s chief antagonists. The Speaker’s daughter, Illinois Attorney General Lisa Madigan (D), appears to be preparing to run against Blagojevich in the 2010 Democratic primary election.

The Speaker is more receptive to a bill crafted by State Rep. Julie Hamos (D-Evanston). It would raise $435 million in new revenues annually, chiefly through a regional transit sales tax increase and transit system reforms, such as CTA union members making higher pension contributions and receiving reduced benefits. The union give-backs would expire if increased transit funding is not approved by January 1.

That’s when the next session of the legislature begins and the next time a simple majority will be able to enact legislation.

Dennis Byrne ([email protected]) is a Chicago newspaper columnist and freelance writer.