If union goes along, CTA says no fare hikes or service cuts in 2012
CTA president Forrest Claypool (right) and CTA chairman Terry Peterson discuss the budget in Chicago Wednesday. (Antonio Perez, Chicago Tribune / October 19, 2011)
CTA president Forrest Claypool said a near-record $277 million deficit will be addressed through a combination of $117 million in management savings and up to $160 million in other cuts, the bulk of them being labor reforms and limiting wage growth. Changes to health care benefits will also save money, officials said.
The CTA’s proposed $1.24 billion operating budget for 2012 is $66.2 million, or 5.1 percent, less than the 2011 budget.
If the needed savings cannot be achieved by July 1 through management-union negotiations, the CTA would have to make major changes to the budget, Claypool said, adding that severe service cuts and up to 1,000 layoffs would be the first step, followed by possible fare hikes.
“We know we can balance this budget with labor reform,’’ Claypool said.
The CTA’s union collective bargaining agreements expire on Dec. 31, and leaders of the Amalgamated Transit Union have already made it clear their members will not give up their hard-fought working conditions in order to make up the CTA’s budget shortfall. They say deeper cuts in CTA management must be the first step.
Claypool said the CTA can “no longer afford to kick the can down the road.’’ But the agency’s balanced budget for next year is premised largely on “anticipated work rule reforms,’’ he said.
CTA chairman Terry Peterson added: “I think labor recognizes this is a different day.’’
Increasing fares and cutting service have historically led to ridership declines, even in better economic times than today’s. Ridership this year has increased on both buses and trains.
The CTA provided about 517 million rides in 2010, or more than 1.6 million rides each weekday. Through August of this year, ridership was 7.1 million more than at the same time in 2010.
CTA officials project that for the full year of 2011, average weekday ridership will increase 2 percent from 2010, average Saturday ridership will increase 0.9 percent and average Sunday ridership will grow 4.38 percent.
Claypool said his goal since the day he started at the CTA in May has been to somehow put the chronically cash-strapped transit agency on solid financial ground, warning that improving service is not possible otherwise.
Except for 2010, when the CTA slashed service and laid off more than 1,000 employees as part of eliminating a $300 million deficit, next year’s $277 million in red ink will be the worst in recent years.
Revenues have fallen to “dangerously low levels’’ while costs have soared, Claypool said.
About $81 million of next year’s deficit will be due to increased operating costs, transit officials said. Claypool has blamed much of the expense on “gold-plated union collective bargaining agreements’’ that past CTA administrations approved, as well as benefits, pension obligations and health care.
The CTA has borrowed more than a half-billion dollars over the last four years to cover deficit spending, and Claypool vowed to stop the practice and fix structural deficiencies on the financial front, both operationally and on the capital-improvement side, so the agency can invest in modern infrastructure and expand the system.
About $196 million of the $277 million deficit is the result of past borrowing, he said.