Deal near on RTA/CTA funding?
A combination of increased sales and real estate transfer taxes could be the ticket to allow the CTA and RTA to avoid massive service taxes, reports the Daily Herald.
The key is a half -percent sales tax increase: "A quarter-cent would go to keep trains and buses running, while the other quarter cent would go to suburban counties to build new roads and widen existing ones."
Providing money for roads may provide suburban lawmakers with enough cover with voters.
Suburban lawmakers also fought to change how the money would be divided up:
"Suburban Republican Sens. Dan Cronin of Elmhurst and John Millner of Carol Stream initially opposed the mass transit bailout because 60 percent of the money would have gone to the CTA, 30 percent to Metra and 10 percent to Pace -- despite the suburbs paying nearly two-thirds of the new taxes. The compromise would see the CTA getting 48 percent, Metra 39 percent and Pace the remaining 13 percent."
The Chicago Tribune is calling it "A decent transit deal."
Let's just hope the deal gets gone.
Actually it's a one-half-percentage-point increase. (So no one needs to make change for a penny.) That officially shoves the city into the double digit sales tax, doesn't it? Miserable. Wasn't there a consensus that the funding formula needs to be fixed?
Posted by: Bob S. | July 30, 2007 at 09:18 AM
Correction made. Thanks Bob.
Posted by: Kevin | July 30, 2007 at 10:14 AM
I hope the deal DOESN'T get done. Sure, one could stop shopping, but I need to buy toothpastes and the like some of the time.
This is ridiculous. Why don't they increase cigarette taxes instead? Why the sales tax?
Ridiculous.
Posted by: whyowhy | July 30, 2007 at 10:25 AM
Whowhy: They will be raising cigarette taxes towards the end of the year (I believe), significantly. This is in addition to sales tax...I don't see a need to punish the smokers alone!
Posted by: Fool for the CTA | July 30, 2007 at 11:43 AM
No, increase gasoline taxes for this.
Institute a tax on all spaces in "free" parking lots!
If a shopping mall or something like WalMart had to pay $100 a year per space, maybe they would make sure there was decent public transportation to the place.
Make the dummies that insist on driving to work, one person per car, pay for the mess they've created!
Posted by: Unindicted Co-conspirator | July 30, 2007 at 03:38 PM
Unindicted Co-conspirator: Thank you.
Smokers already will be paying $4.41 per pack in taxes alone. Fumes from gasoline kill a lot of people every year and this is not counting the 50k people that are killing in auto-related accidents a year. So, if a sin tax is what you are after, gasoline needs to be taxed more. A gas tax is the only way to push people to ride public transit across the board. Increase the price enough and people will eventually choose the cheaper option. Imagine if gasoline were taxed at $4.41/gallon. People would actually start to use public transit. Based on a quick calculation: 20 million barrels per day consumption * 19.5 gallons per barrel(1) * 365 days = ~142 billion gallons of gas purchased per year. If there were a federal gas tax of $4.41/gallon this would net ~$626 billion a year. Think of what this country could do with that kind of money. $4.41 would never fly in Peoria, and it’s ridiculous to start with a number that large, so let’s just say 50 cents a gallon. That would net $71 billion a year nationally, not taking into account decreased demand from higher prices, but gasoline has rather inelastic demand, so the numbers above are probably still pretty valid. Pump $71 billion into public transit nationwide every year and the U.S. of A might be able to rival some European countries in transit efficiency within a decade.
(1) A barrel (42 gallons) of petroleum produces about 19.5 gallons of gasoline after refinement, depending.
Posted by: Tim | July 30, 2007 at 06:13 PM
check out the blog "sick transit chicago" for information --
http://sicktransitchicago.blogspot.com/2007/07/suburbanites-new-math.html
overall, the revenues will be distributed in the same manner as before. however, it looks like the bill will not include a city of chicago real estate tax. in the new version, the city council will pass the real estate tax so it looks like, in the state bill, the suburbs aren't "bailing" the city out. in terms of the money allocated, nothing changes with the new compromise. but with the new compromise, suburban leaders can claim to their constituents that this bill is not a suburban "bailout" of the CTA.
the only problem with the new compromise is that, if sales tax revenue grows faster than the real estate transfer tax revenue, the CTA will see, over time, a proportionately less share than under the original bill. and just the same, if the trasfer tax revenue grows faster, metra and pace will see less money.
Posted by: ds | July 31, 2007 at 12:43 AM
Oh no Tim, don't thank me.
The gas tax increase would additional to a tobacco tax increase.
I think smokers should be paying a tax of $10 per cigarette, not $10 a pack, but per cig, that's $200 a pack.
To avoid bootlegging, the tax would be paid by counting the factory's output & the company would pay it & raise the wholesale cost to cover it. Undercounting at the factory would be a felony, with the company's board of director's going to prison for that, along with the factory's management.
That will pay the rest of us back for the ruined clothes, the medical bills & all the fires you start by falling asleep while smoking your cancer sticks!
I'd rather see tobacco taxes quickly fall to almost nothing as smokers finally quit this obscenity!
Remember Tim, a lot of the dummies driving to work one to a car are doing so they can smoke as the drive!
Posted by: Unindicted Co-conspirator | July 31, 2007 at 12:53 AM
I agree with UC-C regarding taxing of parking for this purpose. Indeed, I sort of hope this deal doesn't go. The CTA (which I routinely use) makes exceptionally bad decisions regarding capital projects (see, e.g., the Loop "Superstation") and, furthermore views capital budgets as untouchable, even if operations ("service", in English) goes to hell. Giving CTA more money every year just enables Richie to blow more on his contractor buddies. Moreover, the City doesn't kick in anything like its fair share to the CTA.
I say, deny the funding and let's see how mad people get.
Posted by: Giant Rabbit | July 31, 2007 at 10:20 AM
I brought up the cigarette tax to demonstrate the point that this burden should be spread evenly among the citizens, not specifically to one group. I did NOT bring it up to solicit smoker bashing...as a smoker myself I respect those who do not smoke, and would expect the same from them!
Posted by: Fool for the CTA | July 31, 2007 at 11:43 AM
it seems that uc-c wants to punish anyone and everyone (as a felon, no less) who doesn't conform to his/her ways. that's a great way to be! and, btw, i'm one of those who choose to drive to work. mainly because i prefer NOT to encounter the smug, self-righteous people -- of all makes and models -- i find riding the train. i now get a quiet, clean and fast trip with no delays. finally, i've ALWAYS welcomed rides/carpooling for a flat fee of $5/wk. i doubt you could get that deal from the cta. any takers?
Posted by: whyowhy | July 31, 2007 at 12:28 PM
Giant Rabbit: I've seen many posts with the same sentiment as yours... essentially saying to punish the CTA for poor practices and bad service by denying funding. Some CTA management deserves a thousand lashes, but you're also punishing tens of thousands of people who rely on transit to get to work or whatever it is that they need or want to do. From Pace's Metra Feeder and weekend service (and no, not all suburbanites are wealthy or have multiple cars- far from it) to CTA service on the outer edge of the city, crush loads on trains, and operating all other service on a Sunday schedule is very real and, as I said, not going to punish anyone but those who need it most.
Posted by: Patrick | July 31, 2007 at 03:37 PM
UC-C: I don't think you read my post, and if you did, you didn't comprehend it.
The meat of my post concerned a broad tax on gasoline. I provided real numbers; you throw out ridiculous numbers like a $200 tax on a pack of cigarettes. There is no way in the world that a pack of cigarettes causes $200 in property/personal damages. Should candles be taxed at 400% because they start a lot of house fires as well? How about incense? Gas stoves? Etc.
I could well argue that burning a full tank of gas in almost any car emits far more toxins than a carton of cigarettes. These toxins are released directly into the air where everyone gets to breathe them. See the number of people killed a year because of exhaust fumes from cars/trucks/industrial plants/etc, is quite hard to gauge. On the other hand, it is much easier to gauge how many people are killed from smoking. Even if the number of people that are killed from exhaust fumes is triple the number from cigarettes, you will never hear anyone cite this as it is almost impossible to figure.
The other reason that this is an issue is because this country is so reliant on automobiles for transit and trucks for transport that by taxing fuel at the rate that it causes damages is that it would be devastating to the economy. Plus, almost everyone owns a car, if you tax gas you piss off a whole lot of voters. If you tax smokers you are only pissing off roughly 28% of voters. Which would you choose if you were a politician?
My original point was to put a broad tax on gasoline of 50 cents a gallon and direct the money 100% towards public transit. This will build out an infrastructure across many areas that have no/bad public transit and give people an option and an incentive to not drive. It’s not like gas is going to get cheaper in the long run, build the infrastructure in the short term and reap the benefits for the long term.
Posted by: Tim | July 31, 2007 at 06:47 PM
"This will build out an infrastructure across many areas that have no/bad public transit and give people an option and an incentive to not drive."
Well, the tax will give some people an incentive not to drive but the reduced congestion caused by the tax would give plenty of others an incentive to drive. It terms of encouraging people to use public transportation that would probably be pretty much of a wash. It would just discourage people from doing things with their car, including shopping which generates sales tax and is currently where much of the revenue for public transportation is generated. You may end up with less revenue than you started. And I'm not sure why you would think that areas with little or no public transportation would magically, as a result of a tax, "build out an infrastructure" of mass transit. There is no way that people are going to use public transportation if they are going to-and-from places with low traffic congestion and easy parking availablity (and these will get even less of a problem under your plan).
Posted by: MK | July 31, 2007 at 07:18 PM
MK: If gas prices stay where they are today, then people will continue to drive as much as ever. But, what happens if gas prices don't stay the same? What if they double? Triple? Quadruple? (http://en.wikipedia.org/wiki/Peak_oil)
Do you think people are going to be driving a car to Wal-Mart when it costs $10/gallon for gas? Doubtful many people could afford that. If there is public transit in place, then there is an alternative. Now people that can't afford to drive a car to go shopping can go shopping and pump money into the tax coffers. How will people get to work if gas costs $10/gallon. Once again an alternative. People can't ride something that doesn't exist. I'm not saying to build out a heavy rail system in the middle of Montana. But, there are many large cities in the US that have very little in the way of transit. The light rail in St. Louis was never supposed to attract as many people as it did; same with the Trolley in San Diego.
General observation: For people posting on a public transit blog it seems many are quite anti-transit.
Posted by: Tim | July 31, 2007 at 08:29 PM
I am certainly not anti-transit. I am just pointing out the quite obvious fact that if you dramatcally raise gas taxes (you are suggestion people pay $10 a gallon?, yikes!), it will stun the economy. It is a known fact that the variations in the gas prices today have significant effects on how much people spend. If you double the price of gasoline it would cause an economic depression. You do realize that there would be huge job losses, right? If people don't have a place to work that certainly does not do very much to encourage public transportation. People don't have to go anywhere. And those that do will no longer have to deal with traffic congestion and will find empty parking lots that result in a reduction of parking fares. That creates a dissincentive to use mass transit. I'm also not exactly sure what you mean by "I'm not saying to build out a heavy rail system in the middle of Montana. But, there are many large cities in the US that have very little in the way of transit". We are discussing the chicagoland region which includes many areas in the collar counties that are not dissimilar to Montana. You seem to suggest dramatically raising the gas tax for them to. Should they have busses in places like Mundelien, Vernon Hills, and Waukanda take people from every neighborhood to Wal-Mart and to the grocery store? Perhaps to every restaurant and office building as well? How often should these busses run? Every ten minutes? If you really think that transit would be a good alternative it can't be any less than that. Or would you suggest they build a rail system in every suburb to take people from their neighborhoods to commercial areas? And, of course, it is pretty difficult to pay for this when the economy is sent into a depression in order to accomplish it.
Posted by: MK | July 31, 2007 at 10:46 PM
Actually MK there are a lot of busses in Mundelein & Wauconda!
Many times those busses happen when someone comes home from taking one of the Pace buses home!
Posted by: Unindicted Co-conspirator | August 01, 2007 at 04:56 PM