Despite higher ridership, the CTA is leaking money due to higher fuel and labor costs, while losing out on expected revenue from the real estate transfer tax and from an increase to the local sales tax. Both increases were part of the bailout that averted massive service cuts this year.Tough times ahead for those of us who rely on public transportation.
Last January, the state legislature found new revenue for the CTA, Metra and Pace by increasing the sales tax in Cook and the collar counties by a quarter of a percent. Chicago increased the real estate transfer tax by 40 percent, for an expected $100 million in new annual revenue for the CTA.
But because of the real estate slump, the transfer tax is bringing in only about half of what was expected so far this year, according to Joe Costello, chief financial officer for the Regional Transportation Authority, which oversees the CTA, Metra and Pace.
"It's significantly below what we were hoping," Costello said. Revenue from the new sales tax is also about 9 percent lower than expected.
Local transit agencies are also taking a hit from free rides for seniors, a program tacked onto the bailout bill by Gov. Blagojevich.
Since March 17, when the free ride program was implemented, through June, it has cost the RTA $9.3 million, and more seniors are applying for free fare passes, according to RTA spokeswoman Diane Palmer.
The RTA could lose $30 million a year to free senior rides, and another $10 million to free rides for the low-income disabled when that program takes effect.
The governor's decision last month to cut the state's reduced-fare subsidy will slash $16 million from the CTA's budget this year, and another $30 million in 2009.
Friday, August 22, 2008
Growing chance of CTA fare hike
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