Ron outlines the CTA's long-term fiscal pressures
At our coffee talk on Sept. 20, CTA President Ron Huberman said that despite the threat of a slight fare increase in 2009, the CTA finds itself in the best fiscal position in a decade. That's because of the sales tax increase passed early this year by the Illinois General Assembly.
Huberman DID flatly rule out any service cuts. And with ridership increasing monthly, that would be really dumb. Still, the following financial pressures have the CTA tightening its belt and mulling that fare increase:
- Rising fuel and energy costs. Huberman said the fuel bill will be $50 million more in 2009 than 2008. Energy costs will be 30% higher.
- The soft economy means sales tax revenues are 9% less than projections. And the new real estate transaction tax will yield 50% less than originally anticipated.
- Free rides to various rider constituencies will cost $66 million this year. "And someone has to pay for that," said Huberman.
- And it certainly won't be the state of Illinois paying, since Gov. Blago vetoed $32 million in fare subsidies that the CTA had been getting for many years to pay for reduced fares.
Huberman talked further about the impact of free fares for seniors and others. Free rides for seniors grow every month. Just under 30,000 seniors were enrolled in the reduced fare program in March. More than 90,000 were enrolled in August for the free fare program, and Huberman expects that number to swell to 100,000 by year's end.
Many of these folks previously paid full fare, including Ron's own father, who Huberman said has just recently signed up to get free rides on the CTA, thanks to Blago's amendatory veto of the sales tax increase bill back in January.