On top of
a looming budget crisis this year, the Chicago Transit Authority must dig its
way out of an $87 million shortfall for 2008, the transit agency's board
learned today.
The new deficit number for an operating year already concluded startled CTA board
members. They questioned the apparent lack of timely budget oversight provided
by the Regional Transportation Authority.
"I'm
confused. How can we amend 2008 budget marks in February 2009?" asked CTA
Chairwoman Carole Brown.
The RTA is responsible
for providing guidance to the CTA, Metra and Pace on how much public funding
each will receive. In turn, the transit agencies are required to balance their
budgets by controlling costs and setting service levels and fares.
The RTA notified the
CTA last week that public funding for 2008 has been decreased by $58 million,
accounting for most of the $87 million deficit for the year.
The CTA made internal
cuts and raised fares in January to close what it thought was its budget gap.
In addition, the CTA
should expect to receive $155 million less than originally projected in public
funding this year, the RTA said.
The combined shortfall
for both years totals $242 million.
The cutbacks are the
result of declines in sales tax and real estate transfer tax revenues, due to
the sagging economy.
CTA officials said
they will seek additional funding from the RTA to avert a crisis that could
otherwise lead to wide-ranging service cuts and hefty fare increases.
"We can't lay
people off retroactively or not pay suppliers" for inventory already
delivered, Brown said, expressing "disbelief" that the RTA is acting
so late in the budgetary process to tell the CTA about 2008 shortfalls.
RTA Executive Director
Steve Schlickman disagreed with the implication that his agency was asleep at
the switch.
"I believe myself
and my staff have been working with the CTA as
cooperatively as possible," Schlickman said.
He called on CTA
officials to provide the RTA an accurate accounting of its predicament, right
down to daily cash-flow issues.
The RTA is at work
trying to borrow about $120 million from a bank to help the CTA, Schlickman
said. "We are scraping every cash source that we can," Schlickman
said.
The RTA currently has
a cash flow of about $40 million, officials said.
RTA chairman Jim Reilly
told the board he wanted to "correct the impression that the RTA is not
working together with the CTA." He said that if the current RTA estimates
prove accurate and "the economy doesn't fall off another cliff," the
RTA will be able to help the CTA avoid service cuts and more fare increases
this year.
Reilly did not provide
details, however. "Frankly I am more scared about 2010 than I am about
2009," Reilly said.
Preliminary RTA
projections show that the CTA should plan for a $141 million drop-off in public
subsidies in 2010.
--Jon Hilkevitch
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