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Analysis of CTA's 2009 budget: big job cuts, hike in fuel bill

Last week I published an analysis of the fare increase proposed for 2009. Today we'll look at the overall budget.

Cta_2009_operating_budget_3 One detail of the budget that was lost in the noise of the fare increase is the elimination of almost 400 operations, administrative and support staff jobs at the CTA.  Of those, there will be 210 fewer administrative jobs, and 186 fewer maintenance and facilities operations positions. This total of 396 includes the 80 jobs that are being cut this year.

Also, the CTA is cutting 236 positions that were funded by capital projects. This job reduction is primarily composed of track flagmen, customer assistants and towermen associated with construction projects. With decreased construction activity in 2009, fewer of those jobs will be needed.

Expense for labor accounts for nearly $1 billion -- $890.6 million to be exact -- or 67% of the over operating budget of $1.324 billion.

Diesel fuel expense will $102.8 million, or a whopping $54.4 more more than the CTA's original 2008 budget. The cost of electric power for revenue generating equipment is $40 million, or 13% higher than the 2008 amended budget.

Ridership. The CTA is projection a tiny decline in ridership of 0.12%, to 517.8 million rides. The CTA expects bus ridership to drop by 6.6% to 309.5 million. But that will be offset by an expected 8.1% increase in rail ridership to 208.3 million.

Revenue. System-generated revenue is expected to increase 9.7% in 2009, primarily due to the proposed fare increase. The CTA reports: "If CTA’s fares were adjusted for inflation as tracked through the Consumer Price Index (CPI) over the last 10 years, CTA current pass fares cost less than they did 10 years ago."

The CTA is required by state statute to cover at least 50% of its costs with system-generated revenue. The 2009 budget estimates the CTA will recover about 52.7& of its expenditures with revenues -- about $601.1 million.

The CTA expects to get $723.3 million from public funding. Of that, $655.8 million will come from the state and RTA via the sales tax. The remaining $67.5 million will come from Chicago's  real estate transfer tax.

Budget hearing. A public hearing on the proposed budget will be held at 6 pm Wednesday, Oct. 29, at CTA headquarters, 567 W. Lake St. Written comments can be submitted to Gregory Longhini, assistant secretary of the board, CTA, PO Box 7567, Chicago, IL 60680-7567. Email comments can be sent to ctaboard@transitchicago.com. The deadline for comments is Nov. 5.

The CTA must submit the budget by Nov. 15 to the RTA.

Comments

67.5 mil from real estate transfer tax? Let's hope that the credit market begins flowing again, because that seems to be quite a lofty figure.
Also, suppose ridership drops more than expected and the CTA cannot cover their 50% of costs with operating revenue. Is there some kind of punishment they receive, or does the state trust the CTA's good faith effort at keeping the 50% point?

Why should there be a hike in the fuel bill?
It should be going down, oil is well under $83 a barrel & the futures market has it at $77 for November.
There are predictions of sub $50 oil next year when the recession really hits.

johnson,
The "punishment" in such a scenario is that CTA starts to rapidly lose cash and eventually couldn't meet payroll. In years past, this is was called "doomsday." In 2007, the RTA and CTA specifically passed a budget that was out of balance rather than hike fares/cut service, which really pissed off Springfield. As Kevin pointed out in his recap, the budgeted recovery ratio is 52%, and 2% of a ~$1.3 billion budget gives over $20 million of wiggle room for the year for the various revenue/expense projects to deviate from budget.

The state doesn't just "trust" CTA's good faith: this is why the CTA board has 3 appointees of the governor, but more importantly why the budget has to also be approved by the RTA.

Thank you for the email address. I'm not sure I'll make it to the forum, but I just sent the board members a message.

Wow. If you look at the 2009 budget by line item it shows that CTA spent $100 million more on labor in 2008 (or at least is forecasted to spend that amount) than in 2007. What's up with that? Especially since they'll end the year with fewer employees?

What drove that? A ton of overtime? $100M and approximately 10,000 employees means on average, each employee got $10K more in 2008 than in 2007.

katy,
I think it says in the budget document that the increased labor cost is do the added pension/health care contributions that were mandated by law to bring those funds into solvency. So despite reducing head count, overall labor expense went up dramatically, along with the added revenue from the funding package.

The additional labor costs were also due to all the construction that happened this year.

I overall am not pleased with CTA and how they run their business. We should have silent electric train cars by now and ALL buses should be fuel efficient.

There should be time tracking technology for all modes of transportation so that all riders are aware of the next arrival. And the number of breakdowns and delays are astounding. Not to mention communication between the CTA and the riders for problematic situations.

Stop wasting money on Flat screen LCD's that display info that isn't even formatted for the medium. Remove the bike black-out hours because I've seen people take up more space with bags and luggage than bicycles on the El. Inform the uninformed, if the CTA would just admit to the riders the problems that arise they would generate sympathy for things that were out of their hands to avoid.

I for one would be willing to pay more in fare to ensure that my time is not wasted by the CTA any further. I love this city, but not it's public transportation.

The CTA has hired an out side company to run the advertising on all of the CTA equipment and properties. and there is alot more than I have ever seen before small signs on the ceiling, on the platform in the subway. Where does all this money that is spent by the companies go. Look at how much money is spent to advertise on a NASCAR look at how many buses we have and train cars too. We should be able to ride for free if the revenue was the same. put Quaker State on the side of the bus and get free oil, Brawny paper towels and free towels and so on.

6 members of Local 701 have been notified of the layoff coming January 1st. This is after the CTA promised to not take any of our positions because of the intergovernmental agreement with the City to have Fleet Management maintain the non revenue fleet. The CTA is paying over $10 an hour more for the City mechanics and still paying the 13 mechanics moved to the Bus repair Shop and now we get 6 mechanics layed off? But the CTA can still pay all the outside labor at the vendor's at costs of 75 to 100 dollars an hour and pay the City the higher rate. How does this make sense? Layoff Mechanics and Maintenance personel but pay someone else to do the same work at an over all higher rate! Who are they kidding? Smell a rat? I do.

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