Chicago Transit Authority President Forrest Claypool said Tuesday the transit authority is facing a $277 million budget deficit for 2012.
Claypool outlined the CTA's fiscal state during a morning address to the City Club of Chicago at a public policy breakfast. He said the agency borrowed $554 million in the past four years, despite a fare hike in 2009 and cuts in 2010.
Claypool didn't mention service changes, possible cuts or fare increases, but he said it was time to start making tough decisions to fix the agency's fiscal system.
"We can’t defer the hard decisions any longer," Claypool said. "The CTA’s cost structure is too high given the revenues and tax receipts we have to operate it. Changes are needed now to shore up the CTA’s fiscal situation."
He blamed the agency's state on years of funding formulas that he said shortchange the agency, as well as a neglected infrastructure and expensive state and federal mandates.
The biggest contributing factor, he said, has been "unrestrained wage and benefit growth in labor agreements, even during the Great Recession, and a plethora of arcane work rules that cost the agency tens of millions annually."
But Amalgamated Transit Union Local 308 President Robert Kelly takes issue with Claypool's assertion that labor is the problem.
"I know what my people get when they're off sick. It doesn't account to $40 million," he said.
Instead, Kelly said the issue is with the CTA itself.
"We do not deny there is an absenteeism problem, OK. We can't control that. We do not hire the people. The Chicago Transit Authority hires the individuals."
The union represents CTA rail workers.
In 2009, the CTA hiked fares by 25 cents for most rides. Bus fares were increased from $1.75 to $2 and rail fares to $2.25 from $2.
Service reductions went into effect in 2010. Nine express bus routes with corresponding local service were eliminated and 41 bus routes either started service later or end earlier, or both. CTA also sent more than 1,000 lay-off notices that year.
The CTA has since avoided additional fare increases.
The Chicago Transit Board last month approved an increase in parking fees at several Park & Ride lots and Under-‘L’ lots to generate $90,000 a year in new CTA revenue. Free rides for some seniors also were eliminated to save money.
"A robust, modern transit system is not just important to transit riders," Claypool said. "It is important to the livability of the region and its ability to attract jobs and businesses. An investment in transit is an investment in the future of this region.”