How to reduce the CTA's budget deficit
I was not at all surprised to read that the CTA and other transit agencies are facing big budget gaps this year.
The Trib's Getting Around column reported Monday the CTA is looking at a $155 million shortfall for 2009, on top of.a $58 million deficit for 2008.
Nope -- it shouldn't come as a shock to anyone that the CTA would be any less vulnerable to falling tax revenues due to the current economic crisis.
So what to do about it?
First, realize there should not be a sustained downturn in those sales tax and home sales transfer taxes. Those revenue projections were adequate enough before the economy tanked. So recognize that they should come back and increase once the economy resuscitates.
So let's say that takes 18 months. Thus, solutions should not necessarily be long-term in nature. To me, that means avoiding permanent service cuts if at all possible.
So where to cut? These ideas are not new, and are commonly used by businesses and governments that find themselves in funding troubles. Some of you have already suggested them as well.
Certainly the largest expense for the CTA is wages. To that end:
- Impose an immediate hiring freeze.
- Eliminate all scheduled merit pay increases not mandated by union contract.
- If wage hikes are part a contract, try to renegotiate them in the short term. After all, if the CTA doesn't get enough wage cuts, then job layoffs forced by service cuts may be necessary. Call that the stick -- there is no carrot here.
- Force those making more than $100,000 a year to take a 5% temporary pay cut. Also require them to take five days off without pay.
- For workers making less than $100K, offer furloughs to them. Perhaps make three days off mandatory for those making between $60K and $100K.
- Any consultant fees budgeted for but not yet contracted for should certainly be postponed.
- The RTA reportedly has some stopgap funding it can kick in. Give that up.
Obviously, I don't have a dollar figure on how much these cuts would save. But they are a start.
Throw all the above into the abacus and see how far off we are. And I suspect we will still be short. Then, and only then, should service cuts be considered. But only as the last resort.
The CTA board meets Wednesday, Feb. 18. This is the first test of leadership for new Acting President Dorval Carter. It seems he's already looking to begin a reduction in force, judging by this item listed on the meeting agenda: "To approve an ordinance authorizing reductions in force to meet 2009 operating budget requirements."