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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:

  1. 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.
  2. 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.
  3. Free rides to various rider constituencies will cost $66 million this year. "And someone has to pay for that," said Huberman.
  4. 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.

Comments

Thank you for running this blog, as a CTA Employee I get more information here and from the Tribune than I do from anywhere else. It is good to hear the plans and that there are no service cut plans and things like BusTracker Text Messages and a run down on the finances. Thank you.

God forbid that you should actually have that information communicated from your employer.

That might cause the downfall of civilization as we know it....dogs and cats living together....etc...you know, old testament stuff....

I'm still not sure if this is funny or sad, or both. If nothing else, it's a stark illustration of exactly how bad the CTA communicates...


KevinB

I think the fare increase is coming and is unavoidable with the recent increases in energy costs. Such increases in ridership are promising for the future of the CTA, but free rides Blago gave out are annoying. Hopefully the 2 are not offsetting each other because as pointed out, many of these seniors were previously paying customers. Over on the Trib board, people act like the free rides cost nothing which is correct in a way, except for the lost revenue.

I see "costs continue to go up, up, up", and I see "service cuts won't happen", and I see "sales tax revenue is down, and the state won't give us more money."

So he's proposed "tightening the CTA's belt", and "fare increases".

Well, how much belt tightening can there be left? Is he saying he's been at the helm for a year and a half, and he's allowed waste to continue? Does any of this belt tightening involve those highly paid friends he hired to do the same jobs that others at CTA were already doing?

There shouldn't be much more left to cut. So that leaves fare increases.

So it seems the plan is to raise fares until ridership drops enough to justify service cuts.

Or did Ron mention some other way to increase revenues?

I'm sorry, but if what's being reported is accurate, he sounds more like a political candidate who keeps talking about everything he's going to do, but side-steps the questions about how he's going to pay for it.

Frankly, unless he's not telling us something about how he's going to raise more revenue, he's either lying or very naive when he says there won't be service cuts.

Let me say that again: Unless he has another significant source of revenue, service cuts will be necessary. Ruling out service cuts means he's either very bad at math, or has a source of money that no one else knows about.

Over at the Trib commenters speak as though the Dan Ryan rebuild and the I-355 extension were built by elves with magic fairy dust rather than federal and state funding, which everyone contributed to whether or not they use the roads. I am so sick of hearing the word "bailout" used to describe adequate transit funding. I'm going to start referring to the "Dan Ryan bailout" just to see if a conversation can be started about the flawed logic. I don't own a car; I don't use the roads, yet I have to pay for them. I am so tired of hearing people who don't use transit bitch about having minute amounts of their precious tax dollars used to fund something from which they benefit even if they don't use.

Don't even get me started about free rides for seniors. I give my father grief almost every day. Lately I've been using the, "don't be Blago's pawn" angle. I don't assume to know what Huberman's father's financial situation is, but if he's able to pay it must break his son's heart that he's taking the bait.

Rusty,

Perhaps you missed the announcements the past couple days about new advertising revenue via digital signage on buses and plasma screens at select bus stops and all rail stations.

There is also the recent announcements of deals signed with cell phone companies in the tunnels, with more presumably to come.

The sales tax and real estate transfer tax revenues are down right now, but will most likely rebound in the coming years which will also provide more revenue. If you add this all up with a little more cost-cutting and a fare hike I think we're looking at a pretty fiscally sound transit system.

Why does Rod Blageovich hate us so much?

Simply put, the CTA has been backed into a corner, and a fare increase is the only viable solution for the short term. Please note that I'm not in favor of a fare increase, as the CTA's percentage of revenue from the fare box exceeds all other national mass transit systems and it disproportionately affects people with limited means. However, until federal, state, and local government wise up and begin to allocate more $$$ to transit systems, we'll continue to have this scenario play out, again and again.

Rod Blageovich really hates himself, Cheryl, he's just projecting it onto us. :)

Chris, we don't have a fiscally sound transit system. Things you mentioned go to the operating budget. CTA desperately needs capital funds to rebuild infrastructure that hasn't been properly maintained due to a lack of capital and diversion of what little there was to Block 37 and other boondoggles by the previous administration. It would also be really nice if we could get some more trains so everyone could stop freaking out about SRO on the Brown. Then there's the small matter of the buses that are old enough to vote....

Won't matter much anyway. Soon none of us will have jobs so there won't be any need to have public or private transportation. You might consider getting the tiller out and turning over the backyard. You might be able to get a crop of winter wheat in this year. Things are going to get VERY tough in the coming months. We won't be complaining about the CTA on blogs. We'll be complaining about the low quality gruel we're getting in the soup line at the all night tabernacle. The economy is shot...and we have our friends in Washington to thank for that. Electricity, cars, heat are all going to become luxuries in the next few months.

To go off topic a bit, it seems that NYC is also having problems getting their message boards to work in the subway.
Way over budget & years late.
http://tinyurl.com/4jfz98

Martha,

Yes, you are correct, but my points were made towards the operating budget which WILL be fiscally sound or close to it. I never said it currently was.

Like you said, the capital budget for maintenance, projects, etc is what is underfunded and is why we need the capital bill. Do not confuse the two as they are separate.

Rusty-

With all due respect ... huh?

I don't see how you get to "fare hikes = service cuts." It's not all at clear to me that the former directly leads to the latter, as you seem to be saying.

Welcome back Frank...I mean Rusty. It has been a day or two since we have seen you on the blog.

Stop harassing Ron until you come up some hard evidence on how corrupt and horrible he is. Your constant complaining just makes you look like someone who likes to complain not someone using critical thinking skills.

I've commented less the last few days because this place has turned into a Ron love-fest, and apparently everyone drank the Kool-ade on Saturday.

There's not much to say when Kevin's postings are so blatanly afterglow from the orgy with Ron. And so many new names posting with POV's one would expect from paid shills.

Geeze, even KevinB seems to have sipped a bit of Kool-Ade!

So if everyone wants to accept that Ron is actually doing something other than talking a good game, so be it. But I'll warn you, in a couple years, I won't be so gracious to not say "I told you so." And I know I'll be getting plenty of chances to say it.

Well, Rusty, that reads like a complete and utter copout to me.

To wit:

RUSTY: Ron sucks. He isn't doing anything to help.

ME: What do you mean?

RUSTY: Geez, what's with all the Kool-Aid?!?!?

No one is saying Ron is perfect. They are saying his ideas are sound and I think you would agree they are. Give him sometime screw up and then you can call him out. We have yet to see you post any real evidence of his incompetence.

Yes. Please let me prove nothing.

I can't prove something isn't happening. You can only prove something is happening. Yet all I see is spin.

Don't like the stats? Can't improve them? Take a page from how Regan improved the unemployment rate overnight: Change the way it's calculated. Check back: Ron's done that trick, too.

Want to confuse people? Toss out some more stats, but don't explain what they mean. We've had discussions about that very recently, too.

And let's not forget taking credit for capital projects that were started, and into their final phases before your tenure began. Ron's done that.

But don't forget that while you take credit for completing projects that your predecessor began, if anything isn't going so well, blame it on him. After all, you just got here.

Then zero in on the things your predecessor was criticized the most for. Concentrate your efforts on those things. People will notice the improvements, and are likely to be distracted from the things you aren't doing as well as he did.

And if you're one of those guy's who makes friends with everyone, you'll get away with it for quite some time, too. Just remember to move on so that when your failures start to come home to roost, you can blame it all on your successor who dropped the ball.

I'd hate to be the guy who has to follow Ron. Especially if he's not a particularly likable person. He's going to be toast.

Ok, fine those are all legitimate things but you bring no proof or even point to anything specific. Tell us what numbers you think he is distorting. Because from the sounds of it people are getting to work faster. Tell us what projects he is wrongly taking credit for. Because I heard nothing about working on slow zones under Frank. You need to substantiate your claims with some logical thought instead of just pointing a finger and expecting us to believe you.

You know, I'm not anti-Ron.

I'm anti-sucky-CTA.

Frank was less smart than a carbon rod.

Ron is smarter than a carbon rod.

All Ron has to have is a pulse to be better than Frank.


I'll admit he's master of the PR and sound bite (and Power Point). That doesn't translate into the CTAs savior.

Service has gotten somewhat better, but not as fast as I'd expect from someone with his management experience. Like I also mentioned his downplaying of the July 4th "inconvenience" and his blaming of the passengers for "self evacuation" didn't make me like his management style anymore.

Hey, the Mayor even called him out on what was his and his alone screwup, so don't say he hasn't had any.

He seems like a nice guy and taking out a few well paid Daley refugees, getting new buses and bus tracker on the 22/36, getting rid of the 3-track and fixing some of the stupid station designs (and getting back the Washington st station and/or blue-red transfer point) would go a long way to bettering my opinion of him.

On another note, it looks like the downtown TIF will be expiring at the end of December, so there's not going to be much more slush fund money for the CTA and block 37.

I haven't drunk the kool-aid Rusty, but I'm not going out of my way to dislike Ron. He's not got the same management style that I'd use on such a dysfunction organization, but then again I don't like managing people. I can do it and I can do a reasonable job, but I'm not going to win any popularity contests fixing things.

I still think there were better alternatives to the 3 track inbound and short of an independent engineering and cost-benefit analysis, I'm not going to be changing my mind any time soon.

I'm fully aware of and have seen more examples of solutions that have be put into place more for the politically expedient reasons than actually making it easier on the customer/consumer. My cynicism is hard won from direct, bitter experience and first hand knowledge (not in this case though) throughout my career and I have the battle scars to prove it.


Cheers,

KevinB

Why don't we start here:
http://www.ctatattler.com/2008/04/where-are-the-c.html

And here:
http://www.chitowndailynews.org/articles/show/14351

Or this comment from Kevin's post yesterday:
"Ron said reliability is still in just the 90% range."

90% of what?

Or all the other conversations we've had here trying to figure out what the on-time percetage figures really mean these days?

Do I really need to pull out all the Powerpoints that toss-out impressive looking numbers without explaining what those numbers really mean, or how they were calculated?

We've talked about these things so many times already, but yet there are still people who brush-off those descrepencies, and blindly accept that those numbers actually are meaningful, and mean what they want them to mean.

So much that we've already discussed, and so little of those discussions have apparently stuck, apparently.

The cute guy with the likable personality can dish-out numbers, and some folks won't ask him for any proof of relevence at all. And just for good measure, he's decided that the historic measurements weren't relevant, so we can't effectively compare anything even if we were to blindly accept that the metric in question was meaningful.

And it's all so Reagan-esque. Raise some valid questions about the assessments we're being spoon fed, and the response is, "Well, there you go again."

Yep. There I go again, refusing to drink the Kool-Ade.

http://www.transitchicago.com/news/whatsnew2.wu?action=displaynewspostingdetail&articleid=120794

The new performance metrics have been published for a while now and all the old reports are still accessible.

I'm not sure what exactly has you all riled up.

Rusty, until you attend one of the Coffee with Ron sessions, I have no interest in giving you any credibility on this at all.

(And thanks, g; I was about to start looking for those. How long did it take you? A couple of minutes? A few?)

About 5 seconds and two clicks from the CTA main page.

Rusty,

You take an off the cuff remark about 90% reliability for bus tracker and extrapolate that onto all data coming from the CTA. Pretty much all other data I have seen in the Powerpoints you loathe explain the data and the metrics. He made one comment during a conversation that was not fully explained, that's all.

And while we're at it, what exactly is Ron not doing as well as Frank?

Ok, so now what do you have for us Frank? Those performance metrics are right there with the definitions in plain sight on the page. And you can go back to before Ron's tender and compare if you like.

I do have to agree though that it would be useful to see where Ron gets the 90% figure from. But the way you have lashed out at him is in no way relative to this miscue.

And I am not saying he is perfect. He is gonna screw up and might screw up big. Just don't call him out until he does make a mistake.

I think I'm in love with Ron.

Maxwell:

Based on the reaction at the Coffee, there were several others who share your sentiment :)

KevinB

Hey, Chris, my confusion is purely with your initial post, which stated, "we're looking at a pretty fiscally sound transit system." I don't see any differentiation between capital and operating in that statement. I also don't see the need for you to presume the need to lecture me on the difference between the two. If you've read any of my posts to the Tattler on CTA financial matters over the past months, it's pretty obvious I know the difference.

"It would also be really nice if we could get some more trains so everyone could stop freaking out about SRO on the Brown. "

As far as I know, the amount of train cars that the CTA possesses has nothing to do with how crowded the brown line is right now. All of the CTA lines on the north side are operating at capacity during rush hour. Because of the constuction at Belmont and Fullerton that is a little bit less than it will be in a few months (but there is more capacity than prior to March when the brown line trains only had six cars). But the brown line is still going to be very crowded when the construction ends. It has nothing to do with capital funding and the amount of equipment. There definetely seems to be a need for more capital funding and equipment but this is not an example of that.

Except that Huberman himself, neither shirtless nor serving Kool-Aid (sorry Maxwell and Rusty), stated many times that the SRO cars are a stopgap solution until new rolling stock can be purchased. Now...back to my regularly scheduled program of misconstruin' and fabricatin'.

I really hope that people are going beyond just complaining about Blagojevich's idiotic free ride stunt and are actually taking steps to do something about it. There is absolutely no excuse for this program existing. Just a reminder, there is a legislature in Springfield. It has the power to change and reverse laws, even laws that it imposed very recently. I say "it" because they should under no circumstances be ducking from their responsibility for this. All they had to do was override Blagojevich's amendatory veto by a three-fifths majority. Had that happened, the governor's senior stunt would not have become law and the rest of the transit funding bill would have gone into effect. I highly doubt that two-fifths of the legislators actually thought giving seniors free rides was a good idea. But they did not have the courage to vote the way they believed. They somehow thought that stating the obvious, that this was not good policy, would lose them support from seniors. That is really nuts. Seniors will choose not to vote for or support someone because they believe that person is not making good decisions. They are not going to vote against someone for deciding not to give them a perk that they, at least deep down, know they don't need. The legislators need to know that there are people who care that they are making these decisions that are not in the interests of the fiscal soundness of the state. So everyone needs to call their legislator and tell them to reverse the free ride requirement. It would be wise if the CTA stated exactly how much they will need to raise their fare without the free rides and how much they will need to do so with it. That will put pressure on everyone to do the right thing. The question will not be "should I give this patronizing benefit to this group of people" but instead it will be "should I give that patronizing benefit at the expense of everyone else". I've said before that I think a fare increase is inevitable and neccessary. But there is no excuse for a higher one than there needs to be because of a bizarre perk for seniors that almost everyone realizes makes no sense.

{spelling corrected} - "Because of the construction at Belmont and Fullerton that is a little bit less than it will be in a few months (but there is more capacity than prior to March when the brown line trains only had six cars)"

No, there is no more capacity on the Brown line since March. The CTA announced that they would have fewer runs of larger(8 car) train sets on the Brown line due to three tracking AND fewer 8 car Red line runs. Something "like" taking 16 runs of 6 cars and making them 12 runs of 8 cars. Before and after March the same time period still uses 96 cars. So Brown is the same since March and the Red line was decreased with fewer 8 car runs in the morning rush.

So, without having additional train sets to use, one would have to move existing train sets faster to improve service. The only way I see that is to DRASTICALLY improve slow zones from last year's high to a MUCH lower number BEFORE 3 tracking ends.

In addition to that, the Brown line does NOT have enough yard storage at Kimball to hold all needed rush hour sets as it is, so additional sets come in from the Howard Yard for Brown line service.

When three tracking is finished, and if ridership keeps increasing as it has this year, I just don't see how the CTA can increase capacity until the new trains on order come in. Also, sort of like Metra, I don't think the CTA will have the option of retiring all 142 of the oldest train sets(the 2200's). Metra had to buy or lease back some of their oldest sets that they had sold/leased out to handle the current ridership crunch, and now have standing in cars(as opposed to everyone sitting at rush hour in the recent past).

One way to cut costs that hasn't come up in awhile is to make the bus fleet more fuel-efficient. The CTA should accelerate its efforts to switch to hybrids, and use smaller buses for routes with lower ridership and during off-peak times. I'd be very interested to see comparative figures on passengers per vehicle mile of the different bus routes.

Well, take a look at this: http://www.nbc5.com/news/17549067/detail.html The CTA public relations machine has managed to get the media to report a 15 percent increase in ridership of the yellow line during July. Of course, that is because it didn't operate on the weekends during July of last year. The article does mention this but, in an oddly schizophrenic way, doesn't seem to make a connection to the ridership increase. It also mentions the percentage change for the yellow line on weekdays and the percentage change for all rail lines. But strangely, it doesn't mention the numbers for all rail lines on weekdays. That would sort of be neccessary if one were to make any attempt to compare the yellow line numbers with the rest of the system. It seems that is sort of the only reason why this article would be published. And I absolutely love the fact that the it states that the Dempster Skokie stop has the fifth-highest ridership of the 18 suburban stations on weekends Umm, why is that notable? That is pretty much in the middle of the pack. Of course it is going to have an advantage since it is farther away from other stops than anywhere else. That actually seems to be a rather disappointing rank. Rusty has overstated a lot of things in this thread. But he is certainly correct that Ron Huberman and his staff do an excellent job with PR and often trick people into thinking something is meaningful when it isn't.

OK. I took another look at the "article" and it appears it is regergatating a press release from the village of Skokie, not the CTA. But that still doesn't mean that Huberman was not somehow involved. Besides, if Huberman gets blamed for a bizarre press release that he didn't make he only has himself to blame. He has been a master of manipulation so people will naturally assume he was involved when they see something as idiotic as this. And it is extreamly unfortunate that the media just regurgatated this without bothering to even care whether it is relevant. Do they even have brains?

Jake,

They already have info for what you are requesting on the website, or close to it. There are ridership #'s for each bus route.

Martha,

Don't be so naive. Yes, you are correct that the ONE line in that paragraph does not actually spell out the fact that I am referring to operating budget, but if you have any sense to read the sentences before it, you can plainly see I am. Wow, you can't read between the lines a little bit? Plus, don't be so offended when you jumped all over my back about something too. Hypocrite.

"So, without having additional train sets to use, one would have to move existing train sets faster to improve service. The only way I see that is to DRASTICALLY improve slow zones from last year's high to a MUCH lower number BEFORE 3 tracking ends."

I believe they have been working on the Ravenswood branch to remove the track slow zones that are present. There are no other slow zones on the Brown Line from Clark Junction through the loop. Same for the Red Line which speeds quite nicely through the subway these days.

Ending all the switching that takes place for three track operation and bringing the other side of the Fullerton and Belmont SB platforms into operation will enable them to run trains faster. Most times there is at least a couple Brown/Purple/Red line trains lining up to get into Belmont, that will be gone in a month or so.

"They already have info for what you are requesting on the website, or close to it. There are ridership #'s for each bus route."

To get the figure I'd like to see - passengers per vehicle mile - you need to factor in the total number of runs and total length of the route. This would give us a basic measure of efficiency for the route in way ridership figures do not. If someone had a lot of spare time they could probably figure it out, but it would be nice if the CTA just gave us that number.

Touche, Chris. You win!

[And I absolutely love the fact that the it states that the Dempster Skokie stop has the fifth-highest ridership of the 18 suburban stations on weekends Umm, why is that notable? That is pretty much in the middle of the pack.]

That sounds like a decent ranking to me. First of all, 5th out of 18th is hardly "middle of the pack" - it's in the top third. Second, it's a route that, to this point, has owed its entire existence to commuters, unlike the Evanston stations. Third, it's still a relatively new service. And fourth, even if it is "middle of the pack," that more than justifies its existence, IMO.

I will add that I'm dubious as to how relevant the stat is in the first place. Being a "suburban" stop is a designation that doesn't have much meaning on its own - the 95/Dan Ryan stop, for example, probably has more in common with the Forest Park stop than the Davis stop in Evanston.

And I'd also say that it seems grossly unfair to blame Huberman for something that Skokie did. Perhaps he had something to do with that release, but 1) it's pure speculation as to whether or not he did, 2) if he did, it likely would have been a joint CTA/Skokie release, and 3) in the end, Skokie's free to do what it wants anyway.

Just saying "Well, by being good at PR he only has himself to blame for any PR by anyone" is stupid.

g, thank you for extrapolating that point. It's almost as though massive slow zone removal HAD to happen before 3 tracking ends in order to improve service(by having enough equipment being turned fast enough) when all 4 tracks are back in operation.

And to the agnst of the Huberman-hating folks, I think Huberman is doing an excellent job of pulling something like this together in a relatively short period of time.

Really, there has been less and less to complain about. And for those that are still personally impacted by areas that still need improvement, we are sorry you've had to wait so long. The Red and Brown lines will get better, the 36 and 22 buses will get on bus tracker, and your station will eventually get rehabbed, too.

Personally, I think it has to do more with capital funding(or lack thereof) than it has to do with Kool-Ade.

What's the problem with noting that ridership is up on the yellow line year over year? I guess they should note that weekend service didn't exist before, but it is still a positive development. I'd be curious how much of an increase it is without weekend riders. That would be more of an indication, but I think the weekend yellow line runs are here to stay. Maybe some day they can extend the hours of the brown line since it is the 3rd highest ridership line now.

Sorry Martha, didn't intend to be mean. You're one of the posters on here with their head on their shoulders and a good perspective on matters and I appreciate your posts.

Let's make up... :)

I appreciate these coffees as getting the straight dope. However there were many questions posted that I didn't hear about. Anything at the coffee about the layoffs? City fuel vs. CTA fuel? Morale? Manager to worker ratio?

"What's the problem with noting that ridership is up on the yellow line year over year? I guess they should note that weekend service didn't exist before, but it is still a positive development. I'd be curious how much of an increase it is without weekend riders. That would be more of an indication"

That is mentioned. The ridership increased on the yellow line 7.3% on weekdays. But they did not mention how much all the CTA rail lines increased on weekdays so there is is really no way to compare it with anything. I'm sure you could find that out on the CTA's website but this is something that obviously should be in the article (the fact that it isn't obviously means it wasn't in the press release). Comparing the yellow line's numbers with the whole rail system means nothing not just because the yellow line didn't run on weekends last year but also because the red and blue line had portions closed for construction on weekends and overnights.

I think most of what Huberman is doing is positive, particularly in regards to operations, but most people don't have the faculty to fully grasp the extent to which the myriad capital improvements underway are being paid for by borrowing against the future (with interest, of course) to pay for improvements NOW NOW NOW GIMME. Of course, much of this blame probably falls on the mayor for wanting everything done before the Olympic committee visits, but CTA will find itself in a huge heap of trouble in a few years if there isn't a massive injection of new capital dollars on an ongoing basis, since a very large chunk of CTA's capital budget going forward will be tied up with debt servicing.

Kinda like if people actually grasped that 20% of the federal budget is just paying interest on loans, people would be upset. I haven't seen CTA's numbers, but with the way CTA is doing bond issues against it's future capital money repeatedly to pay for all these projects, I wouldn't be surprised if in a few years it's even higher than the federal government's debt load.

That said, capital money spent now potentially reduces your operating costs going forward, e.g. by replacing a crappy bus that breaks down a lot with a brand new one. There is definitely a balance in terms of when it's cost effective to borrow against your future, but I'm not under the impression that any politicians, the press, or the CTA board have really answered the question of where that balance is.

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