Considerations on a CTA fare hike
with some info on bargains such as the Chicago Card and Transit Benefit-this is a cached background page

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Fare Hike 2003 page

The next phase begins, countdown to 2006. If the state doesn't make a lasting fix, CTA says cuts and fare hikes will have to cover a deficit twice as high (and we are not entirely out of the woods for 2005!) . So visit the Cuts/Hikes 2005 page which continues into the present. The October 13 2004 HPKCC Transit Task Force Workshop focused on how CTA is funded, and whether CTA should the get new funding and do what other things? See reports in the Transit Task Force updates page.

In this page:

HPKCC Transit Task Force Meeting October 29, 2003, decided to recommend to the HPKCC Board of Directors the following re: the fare hike. The Board unanimously voted its approval of the following Resolution November 6, 2003. This resolution was sent to CTA and appropriate co-respondents.

Whereas

The Hyde Park-Kenwood Community Conference and its Transit Task Force promote strong public transportation as an important social good, be it

Resolved:

The Hyde Park-Kenwood Community Conference and its Transit Task Force prefer a modest fare hike to service cuts and commend the Chicago Transit Authority for the thoughtful manner used to construct most of these fare increases.

Furthermore, whereas

Reverse-direction transfers often fall outside rush hours and are disproportionally used by those on small or fixed incomes, be it

Resolved:

The CTA should refrain from raising the cost of these short round-trips from $1.80 to $3.50, which would engender more ill-will than revenue.

In addition, whereas

The contribution from the city of Chicago to the CTA has remained at $3 million since the 1970's, be it

Resolved:

The City of Chicago should contribute more resources to the CTA as a signal to the state and federal governments of the importance of forestalling future ridership-reducing fare hikes or service cuts.

Finally, whereas

Citizen support is crucial to whether the CTA succeeds or fails in the political process, be it

Resolved:

The CTA should seek more citizen input before making decisions, promote transparency within the agency, and encourage neighborhood groups to partner with the CTA to promote public transportation.

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The fare increase as passed

What was gained by the public in the final fare hike:

After postponing decision at its November 5 board meeting, CTA approved on November 10 the fare increase (to 1.75 dropping the transfer to .26 and leaving all else alone including monthly passes and the "reverse trip transfer." Even the bonuses on the Smart Card will stay at least until a new version is instituted in 2004, and the $5 cost will be waived until March 31 for those who buy and register the card before then (Current holders can upgrade to the new card at no cost. Cost to CTA: $200,000). The board authorized c 50 additional administrative job cuts in addition to 400 over over the next two years. Chairman Carole Brown, according to the Chicago Tribune, signaled backing off elimination of the reverse-route transfer and said the board would not implement any service cuts even though at its October meeting it directed President Frank Kruesi to look at service cuts and staff reductions as a way to avoid a fare hike. Only one formal hearing was held, October 30. The CTA has until November 15 to submit to RTA a balanced budget.

As quoted in the Tribune, Brown said "one of our concerns was that any additional cuts in service or reductions in service would negatively impact our riders. We determined that service cuts just weren't tenable at this time.

According to the Tribune, the projected shortfall without steps is $30 million; officials will look for a way to makeup the $700,000 that would be saved by eliminating the reverse transfer. "We got a lot of feedback on the transfer issue. ...We are asking staff to look at that," Brown said.

Many advocacy groups are still dissatisfied, saying the budget is far from open and transparent, the need is only $6 million not 30, and the agency is still top-heavy (Jaqueline Leavy, Neighborhood Capital Budget Group). Chairperson Carole Brown said she will open up CTA board meetings to allow the public to comment on service and policy issues and there will from now on be regional budget hearings (cf. Park District).

Meanwhile, legislators seem to have little interest in altering sales tax revenue to the CTA, according to the Sun-Times, and re: a way to ease the blow--a universal fare card between CTA, Pace, and Metra, has made "no progress", the RTA told the legislature despite a state mandate to pursue such a card.

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The New CTA fare structure

I = increased, D = decreased

Type Now January 1 change
Full $1.50 $1.75 I $0.25
Reduced (senior students, disabled) $0.75 $0.85 I $0.10
Full transfer $0.30 $0.25 D $0.05
Reduced transfer $0.15 $0.15 same
Express surcharge $0.25 none D $0.25
30-day pass $75.00 $75.00 same
Reduced 30-day $35.00 $35.00 same
Link-up pass $36.00 $36.00 same
Rush shuttle $1.00 $1.00 same
Special services $1.50 $1.75 I $0.25
Taxi-access fare $1.50 $1.75 I $0.25
Mobility direct $1.50 $1.75 I $0.25

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Changes and breaks on the Smart Card

(See Zorn's article below re: who uses, who benefits from Smart Card. More information on the Card below and some basic information in Transit home. )

This writer thinks elimination of discount for bulk purchases of the Card, which is highly convenient, speeds boarding, and builds steady ridership, would be foolish. The Chicago Card may well be the basis of a universal fare card. Note: the newer Chicago Card Plus may not be for everyone- it automatically debits your credit card; you do not add cash at a machine.)

Chicago Tribune, November 11, 2003

The CTA...delayed plans to eliminate a 10 percent bonus tacked onto transit card purchases of at least $10 until a new form of the agency's Chicago Card "smart card" is available in early 2004. The cards have several advantages, including speeding up passenger boarding times on buses.

In addition, the $5 cost of the Chicago Card, and the soon-to-debut Chicago Card Plus, will be waived for riders who purchase and register the cards by March 31, 2004. The waiver is projected to cost the CTA $200,000.

Riders who currently have a Chicago Card will not be given a $5 refund, but they will be able to upgrade to the Chicago Card Plus at no additional cost, said CTA spokeswoman Sheila Gregory.

The Chicago Card is a stored-value card used to pay CTA fares. The card is replenished by adding money to the card at a CTA transit-card vending machine located mostly at rail stations.

The Chicago Card Plus will be an account-based system in which card-holders provide the?CTA with credit card information to automatically add money when their Chicago Card Plus accounts reach a specified minimum level. Value cannot be added to Chicago Card Plus cards at CTA transit-card vending machines.

Commuters who use the CTA/RTA transit-benefit program, which sets aside a specified amount of pre-tax income for transit use, will be able to shift their transit-benefit accounts to the Chicago Card Plus. A date for the change wasn't immediately set. ...

Coverage: Eric Zorn, "Mere quarter matters to CTA, working poor"

Chicago Tribune, November 11, 2003

Mary Frances Bragiel got to the point on an express train. "It's only a quarter," she said. The basic Chicago Transit Authority fare "hasn't changed in 12 years."

It was a challenge in the form of an observation, and she directed it to the members of the Campaign for Better Transit. Half a dozen or so from the campaign had quietly been waiting in the back of the small CTA boardroom in the Merchandise Mart for about half an hour Monday morning. They'd been listening while Bragiel, a CLTV reporter, and the rest of us in the media questioned CTA President Frank Kruesi and new board Chairman Carole Brown about fine points in the fare increase that the transit board had just unanimously approved in a brief meeting that had all the suspense of ritual Kabuki theater.

Kruesi, looking natty in his $38 (retail) CTA route-map tie, had done his best to make the new fare structure sound almost like a wash: Though the basic fare will rise to $1,75 from $1.50, the price of daily, weekly, and monthly passes will remain the same, as will fees at park-and-ride lots and the generous policy that allows the use of transfers for quick round trips.

The $5 processing fee for the Chicago Card and the upcoming Chicago Card Plus—astonishingly easy ways to pay bus and train fares at a 10 percent discount—will be waived during the first three months of next year, and the cost of a transfer will drop a nickel, to 25 cents.

And though Kruesi didn't say it in so many words, the hike is only a quarter. The U.S. Department of Labor's online inflation calculator tells us that if the base fare had kept pace with the consumer price index since 1991, it would have gone up 54 cents. The new $1.75 fare will be equivalent to $1.29 in 1991 dollars.

So, to be even more blunt than my corporate colleague Mary Frances Bragiel, what's the big deal here? The answer, such as it is, lies in the softening of details of the fare hike—the break for those who buy passes, take the CTA to run errands and use park-and-ride lots.

"This is a regressive fare increase," said Jacqueline Leavy, one of those who responded to the media challenge to find cause for outrange in what otherwise looks like an overdue and modest boost when the movable news conference shuffled her way. The projected $30 million in additional revenue will come disproportionately from "the working poor, some of who can't afford the money upfront" to buy 30-day passes or put much cash onto their Chicago Cards, Leavy said.

Disadvantaged urban residents are not particularly likely to benefit from the rate freeze and park-and-ride lots, which, as Leavy said, are mostly in locations that are convenient for suburban riders.

"They're balancing their budget on the backs of those who can least afford to pay," said Rev. Cy Fields of the Landmark Missionary Baptist Church, who was also on hand Monday morning to voice his objections. "The working poor are being asked to bear the burden of the fare hike."

CTA spokeswoman Noelle Gaffney said this is not so, that the transit passes are used more often on bus routes in poorer neighborhoods on the South and West Sides than in richer neighborhoods along the lakefront, and that a 1998 survey found the average household income of pass users was 32 percent lower than the average income of CTA riders in general.

However, that study focused on the seven-day pass that costs $2o, not the 30-day pass for $75, and Gaffney said the agency has not done any studies to calculate if a disproportionate number of any income or age group will absorb the rate hike.

But even if it's exquisitely proportional, the poor , as always, will feel it more than most. Yes, 12 years was a long time for the agency to hold the line on fares, and, yes, the increase is only 25 cents. And though a quarter is no big deal, really, it'll always be a bigger deal to those who have fewer of them to spend.

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Other coverage by advocacy groups

Chicago Defender, November 5, 2003. By Chinta Strausberg

[Rev. Cy Fields, pastor, Landmark N.B. Church, argued] that the increase only "balances the CTA's budget on the backs of those who can least afford to pay... Many communities are not being adequately served by the CTA, but yet they expect us to accept an increase in a fare hike especially on the West Side," he said, citing an area where he said transport tin is woefully inadequate. "If the CTA wants us to open up our wallets, then we believe the CTA should open up its books so that the citizens of Chicago are aware of the budget accountability and things that are going on within CTA. If we open our wallets, you open your books and until you open your books, the fare hike is not fair," Fields said.

he was joined by Jaqueline Leavy, executive director of the Neighborhood Capital Budget Group and the Campaign for Better Transit, Ken Soens, with the Ravenswood Industrial Council, and Vanessa Beasley, a North Lawndale resident, and others. When told that they have a choice, service cuts or a fare hike, Leavy called that option a "false dichotomy" and said the CTA's operating budget is a $937 million spending package.

On the day before CTA is set to vote on the proposed budget, Leavy said: "Mayor Daley is the leader of this city. He calls the shots. He is in control of this agency and he wants to be the leader on public transportation for the city... There has been no[increase in the budget.]" She pointed to the CTA's budget which showed increases by 16.5 percent, including some allocations for the agency's president's office.

"Other departments are getting increases at the same time they say they're reducing staff," Leavy said. "How do you pay more for less staff?" She said the CTA could save $6 million "off the top if the CTA imposes a freeze on those departmental budgets right there..." She questioned a plan by the CTA to create "a new department for bus service management with 201 staff positions with a price tag of $23.7 million." Leavy said the agency has never explained this "mystery" department...during a time of fiscal austerity... You can close that gap by being creative, thinking outside the box and tightening your bureaucratic belt," Leavy said of the CTA's shortfall.

Beasley said: "We want Mayor Daley to have th availability of these events from my 'hood" on the weekend to the Look via the Blue Line.

However, Noelle Gaffney, a spokesperson for the CTA said that fare increases cannot be avoided. "The CTA has for many years very carefully managed its budgets to reduce costs without sacrificing the level of service to our customers and because it has so carefully managed costs, it has been able to avoid imposing a fare increases for 12 years. "But as resourceful as we have been, our efforts have not been able to keep pace with the sustained sluggish economy and with this budget we have to make a difficult decision."

It is a budget that reduces the workforce by 20 positions this year and 200 positions next year, she said. In additional, the proposed budget is only 1.3 percent higher than the 2003 budget and the CTA's proposed spending is below the consumer price index, Leavy [sic-Gaffney?] explained. "The CTA's expenses have remained below the rate of inflation for over a decade," she stated.

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About the original proposal

CTA announced a recommended fare hike in its 2004 budget release. The basic fare goes from $1.50 to $1.75 with other adjustments INCLUDING CUTTING TRANSFERS FROM .30 TO .25 AND ELIMINATING THE EXPRESS SURCHARGE ON such routes at 6, 14, 28. HOWEVER, CTA WANTS TO GO BACK TO DISALLOWING USE OF A TRANSFER ON THE SAME ROUTE. This will hurt seniors and mothers with small children--better to keep the transfer at 30 cents than to do that? No changes to the monthly pass. See more details and what's being said in the Transit News home page. Long-range, funding sources and allocation may have to be looked at. CTA has already cut many costs while making changes they hope will grow ridership and "saturation" of service markets (including competition with Metra). View the CTA proposed budget: www.transitchicago.com/business/finance.html.

What the press said.

(In addition, the pretense at hearings was widely denounced.)

 

CTA warning: TAKE A HIKE: Deficit could force an increase in fares

RedEye, Chicago, September 18, 2003. By Jimmy Greenfield

With a sagging ridership and an $88 million budget shortfall, hope is dwindling fast that the Chicago Transit Authority can avoid implementing its first fare increase in 12 years. "We've run out of the easy fixes," CTA spokeswoman Noelle Gaffney said. "This year we face some real challenges as we try to balance our budget."

The CTA is required by the Regional Transportation Authority to submit a balanced budget, which for months officials have been hinting may be impossible to do without raising the $1.50 standard fare. The proposed 2004 budget is due to be released in early October.

The paring of 400 jobs this year and next, announced Wednesday by the CTA, will trim the budget some. But those measures may not be enough to avoid sticking commuters with a fare increase for the first time since December 1991, when the standard fare went to $1.50 from $1.25. "They have done a good job of looking at ways internally to cut costs the last couple of years, but eventually you're getting close to the bone," RTA spokesman Dave Loveday said.

Ridership is down 2.6 percent during the first seven months of 2003, partly due to the economy. A 1991 American Public Transportation Association study, "Effects of Fare Changes on Bus Ridership," found that on average, a 10 percent increase in bus fares results in a 4 percent decrease in ridership.

If a fare increase is deemed necessary, opponents are likely to point out how CTA president Frank Kruesi pushed through a pension sweetener for himself and other CTA executives at a recent board meeting. "We expect that the public is going to be pretty irate about [a fare increase] in the current situation, given what they just tried to pull with their own pensions," said Jackie Leavy, executive director of the pro-transit Neighborhood Capital Budget Group.

Another factor that may sway public opinion is that bus drivers and mechanics have been working without a contract--and have not received a raise--since 2000. "There's been a lot of discussion about the fact that we don't have a contract with Local 241," Gaffney said. "But we have contracts with our other unions and there are wage increases in that."

As dire a picture as the CTA has painted, it is likely to face resistance from several sides if it seeks a fare increase. Mayor Daley was unequivocal in his opposition to an increase, saying recently that there was "no way" it would happen this year.

To receive a fare increase, the CTA board would put a fare increase in its budget proposal, on which the public must have a chance to comment. The RTA board then examines the combined budgets of the CTA, Pace and Metra to make sure the overall budget is balanced. If it is, the RTA board can vote to approve the budgets, which would put into effect any fare increase.

Mayor Daley and the City Council would not be able to overturn the increase, though that doesn't mean the mayor doesn't have a say in the matter. "Remember, Mayor Daley appoints a lot of the members of the CTA board and a lot of the members of the RTA," Loveday said.

"It seems like the CTA is floating trial balloons in this regard," said Campaign for Better Transit organizer Joe Damal. "They're saying, 'Well, we've got a deficit here.' There hasn't been any official word. There's just been a lot of speculation."

What it will cost you- ...an extra half buck a day... over a month, $13 How the fares compare

The CTA's standard fare is already higher than the nation's average daily transit fare of $1.24, according to Donna Agrazio, spokeswoman for the American Public Transportation Association. But it's also lower than other larger metropolitan areas. "If you're looking at systems of a larger size and larger cities, the fares of $1.50 and higher are becoming more common," she said. Philadelphia, for example, raised its standard fare to $2 in 2001. New York City's MTA did the same earlier this year, but not without facing a legal challenge to the rate hike that is still winding its way through the court system.

[Source: American Public Transportation Association via RedEye and October 4 Chicago Tribune

CITY CURRENT RATE

LATEST INCREASE

New York City $2 (monthly $70) May 2003, from $1.50
Philadelphia $2 July 2001, from $1.60
Atlanta $1.75 (monthly $52.50) February 2000, from $1.50
Chicago $1.50 (monthly $75) December 1991, from $1.25
Oakland

$1.50 bus (monthly $50)
$1.15 rail (monthly NA)

2002 bus, 2003 rail
Los Angeles $1.35 (Night .75) (monthly $42) 2004 daily drops to $1.25, monthly increases from $42 to $52
Washington, D.C. $1.20. Subway based on distance (No monthly) July 2003, from $1.10
Boston $0.75 bus (monthly $25)
$1.00 rail (monthly $35)
2000 bus and rail

]. Continued from the RedEye article:

CTA cutting 400 office jobs in 2 years

The Chicago Transit Authority will eliminate 400 administrative jobs through attrition by the end of 2004, officials said Wednesday. The agency is paring its work force of about 11,700 full-time employees by 200 office positions at the end of 2003, which will help wipe out a projected $9 million deficit for this year and save $12 million next year, officials said.

Another 200 jobs, none involved in the direct delivery of transit service, will be vacated next year through attrition, reducing costs by another $12 million in 2005, said Dennis Anoske, the agency's senior vice president for finance.

The reductions, along with the sale of up to $10 million in surplus property, restrictions on overtime pay and other belt-tightening efforts, will help reduce—but not eliminate—an $88 million operating deficit projected in 2004, officials said. [Ed.: RTA is providing an additional $29 million.]

Every department at the CTA will lose some jobs in the downsizing. Many are analyst or assistant positions that provide support to other employees.

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From CTA press release, November 10, 2003, CTA Board Approves Amended 2004 Budget with Service Intact. [Also info on the Chicago Card Plus and Transit Benefit (employees) programs.

Transfers Drop to 25 Cents, Terms of Use Remain Unchanged

The Chicago Transit Board today approved an amended version of the proposed 2004 budget, which includes a 25-cent increase to the base fare. The CTA has no had a fare increase since 1991. Starting January 1, the base fare will increase to $1.75, however, the cost of a transfer will decrease to 25 cents, down from the current rate of 30 cents, and the current transfer policy will remain unchanged. Prices will not change on 1-day, 7-day and 30-day passes.

Transit Board members voted to keep the reverse transfers that allow customer two additional rides on the rail or bus system within two hours of a transfer being issued, regardless of direction. The decision came as a result of comments from CTA customers throughout the extended public comment period.

CTA Chairman Carole Brown also announced that the CTA board would open its regular meetings to public comment, and would hold additional hearings next year in neighborhoods throughout the CTA service area. "Hearing from our customers on a regular basis will help this board to gain an even deeper understanding of the needs of those who rely on the system every day," said Brown. "We will examine how other boards manage this process and develop a system suitable for the CTA."

In addition to preserving the transfer policy, as part of the approved budget the board added an additional reduction of $2.5 million in operating expenses that will be achieved through a combination of cost-saving measures and further reducing the number of non-service related positions.

"The most important thing to come out of the 2004 budget process is that we were able to find alternatives to balance the budget without cutting service," said CTA President Frank Kruesi. "The new fare structure allows us to maintain our current level of service while funding operations and meeting the state requirements for a balanced budget."

Under the 2004 budget, the 10 percent bonus will continue to apply to Transit Cards only until a similar bonus is available through the new Chicago Card PlusTM, which is expected to be available to customers in early 2004. Beginning January 1, 2004, the $5 fee to purchase the Chicago CardTM and the Chicago Card Plus will be waived until March 31, allowing customers to take advantage of the improved capability of the Chicago Card Plus without the initial cost. The board also directed that customers in the Transit Benefit program be able to access the Chicago Card Plus as soon as is practicable.

The Chicago Card Plus will allow customers to automatically add more value to their cards via credit or debit cards when the balance runs low. The Chicago Card Plus will also be used in the Transit Benefit program, increasing the ease with which businesses can participate in this cost-saving program.

The Transit Benefit Program provides a tax benefit to both employers and employees by enabling them to purchase fares with pre-tax earnings. Employers benefit by getting an annual payroll tax savings of approximately 20 percent of what their employees set aside due to decreased payroll costs. Currently 2,800 employers and 65,000 employees in the Chicagoland area are enrolled in the Transit Benefit program.

As part of the approved budget, the board also directed that Chicago Cards be distributed more effectively to neighborhoods throughout the service area by expanding distribution to additional retail outlets. In 2002, CTA introduced the Chicago Card, a touch-and-go electronic farecard designed to provide more efficient service by improving boarding on buses and trains, as well as providing fare balance protection, a four-year use life and greater durability than magnetic strip cards.

A study to explore incorporating Chicago Card technology into the City of Chicago's plan to enable credit card use in taxis for the benefit of paratransit customers who participate in CTA's Taxi Access program was also added to the approved budget.

The board also decided against a rate increase for CTA Park & Ride lots that was proposed as an additional revenue enhancing measure. Park & Ride facilities provide customers with greater access to the CTA bus and rail system and increase travel flexibility. The CTA operates 16 Park & Ride facilities throughout its service area.

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