Posted by Citizens Taking Action for transit dependent riders

New deficit figure startles CTA board

On top of a looming budget crisis this year, the Chicago Transit Authority must dig its way out of an $87 million shortfall for 2008, the transit agency's board learned today.

The new deficit number for an operating year already concluded startled CTA board members. They questioned the apparent lack of timely budget oversight provided by the Regional Transportation Authority.

"I'm confused. How can we amend 2008 budget marks in February 2009?" asked CTA Chairwoman Carole Brown.

The RTA is responsible for providing guidance to the CTA, Metra and Pace on how much public funding each will receive. In turn, the transit agencies are required to balance their budgets by controlling costs and setting service levels and fares.

The RTA notified the CTA last week that public funding for 2008 has been decreased by $58 million, accounting for most of the $87 million deficit for the year.

The CTA made internal cuts and raised fares in January to close what it thought was its budget gap.

In addition, the CTA should expect to receive $155 million less than originally projected in public funding this year, the RTA said.

The combined shortfall for both years totals $242 million.

The cutbacks are the result of declines in sales tax and real estate transfer tax revenues, due to the sagging economy.

CTA officials said they will seek additional funding from the RTA to avert a crisis that could otherwise lead to wide-ranging service cuts and hefty fare increases.

"We can't lay people off retroactively or not pay suppliers" for inventory already delivered, Brown said, expressing "disbelief" that the RTA is acting so late in the budgetary process to tell the CTA about 2008 shortfalls.

RTA Executive Director Steve Schlickman disagreed with the implication that his agency was asleep at the switch.

"I believe myself and my staff have been working with the CTA as cooperatively as possible," Schlickman said.

He called on CTA officials to provide the RTA an accurate accounting of its predicament, right down to daily cash-flow issues.

The RTA is at work trying to borrow about $120 million from a bank to help the CTA, Schlickman said. "We are scraping every cash source that we can," Schlickman said.

The RTA currently has a cash flow of about $40 million, officials said.

RTA chairman Jim Reilly told the board he wanted to "correct the impression that the RTA is not working together with the CTA." He said that if the current RTA estimates prove accurate and "the economy doesn't fall off another cliff," the RTA will be able to help the CTA avoid service cuts and more fare increases this year.

Reilly did not provide details, however. "Frankly I am more scared about 2010 than I am about 2009," Reilly said.

Preliminary RTA projections show that the CTA should plan for a $141 million drop-off in public subsidies in 2010.

--Jon Hilkevitch


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