A seemingly routine pass-through of funds from the city to the CTA turned into a massive gripe session Wednesday, with City Council members unloading on the transit agency, then holding up the transfer.
At issue was Budget Director Susie Park’s request for Budget Committee approval of a $26.1 million windfall from the CTA’s portion of the real estate transfer tax.
To stave off fare hikes and draconian service cuts in 2008, the Council was forced to swallow a bitter pill from the Illinois General Assembly, passing a 40% increase in the city’s real estate transfer tax to bail out the CTA. It added $1.50 per $500 to the tax on Chicago transactions — and imposed that portion of the tax on the seller. That’s in addition to the $3.75-per-$500 tax the city imposes on the buyer.
Transfer tax revenues plunged during the first year of the pandemic — from $72 million in 2018 to $51 million in 2020. But thanks to booming home sales, revenues came roaring back last year, to $76 million — increasing the CTA’s share of the tax by $26.1 million.
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But Park’s request for what she called a “non-discretionary pass-through of funds” ran into a buzzsaw of opposition, in part because she was alone in her virtual testimony.
CTA President Dorval Carter Jr. was a no-show. Nobody from the CTA was available to answer questions about how the windfall would be spent.
Particularly galling to Ald. Susan Sadlowski-Garza (10th) was that Carter just got a 33% pay raise — from $262,731 to $350,000 — for what the CTA board called his “rock star” leadership before and during the pandemic while Sadlowski-Garza said his employees “are suffering in the trenches.”
“They don’t have correct PPE. They are begging. I’m hearing it from the workers … all across the city,” Garza said.
“I just had a bus driver assaulted last week in my ward by a passenger. No one is doing anything to protect the workers. I have to know where this money is going. What are they doing with it? They came to me for TIF money. They keep asking for money, money, money. But we don’t know where it’s going. I don’t feel comfortable with this at all. Dorval Carter should be here, too, to answer questions about his workers and how this money is gonna be spent.”
Downtown Ald. Brendan Reilly (42nd) said the CTA’s failure to send a representative to the meeting was “an indication of how they approach aldermen generally lately.”
“This is not how you approach a legislative body when you’re seeking an appropriation increase,” Reilly said.
“Ridership is down. The system is having a difficult time. This is precisely the time for them to be communicating with the City Council and [getting ideas on ways to] make things better, restore ridership [and] confidence in the safety of the system, making meaningful investments, et cetera.”
Ald. Jason Ervin (28th), chairman of the Black Caucus, said the CTA is “asking us for TIF money. They’re asking us for any and everything that they feel that they need. But there doesn’t seem to be a two-way street here. … This just doesn’t seem to be right for another body to disrespect us in such a way and, here, we’re still having to send them funds.”
At the risk of piling on, Ald. George Cardenas (12th), said the CTA is “terrible at communications” and has “no grand plan.”
“My stations are dilapidated, badly managed. … No money should go to CTA unless there is true accountability,” Cardenas said.
Housing Committee Chairman Harry Osterman (48th) argued the embarrassment of riches from the real-estate transfer tax would be better spent on affordable housing.
“I was in the General Assembly at a time when we enacted this [tax hike]. It was due to rising fare increases and, I’ll call it, financial instability at the CTA,” Osterman recalled.
“Given some of the federal money, the [transit TIF bankrolling Red Line modernization], the capital bill at the state, it would be timely for us to re-group and look at the finances of the CTA. Is this necessary moving forward? Utilizing this money that comes from housing real estate transfers to address housing within Chicago might be a better use.”
Sensing almost certain defeat, Budget Committee Chair Pat Dowell (3rd) at first moved for a brief recess to give Carter time to join the virtual meeting. She later announced Carter was not available and recessed until 2 p.m. Tuesday.
After the meeting, a CTA spokesman sent a statement to the Sun-Times, saying, in part, that the agency “has a long track record of working with City Council members on a wide variety of issues” and “always aims to be responsive to Council members, and address their ideas and concerns regarding our agency, and we remain committed to maintaining an open dialogue.”
It concluded: “The CTA is aware of the discussion today … and is happy to provide more information on the topic to Council members.”
Before the meeting ended, Ald. Leslie Hairston (5th) directed at least some of her anger at the mayor’s budget director.
“Why did you not think that maybe you should have somebody from CTA appear before the Budget Committee today? Don’t you think that it is a City Council’s responsibility to ask questions as to how city money — taxpayer dollars — would be used?” Hairston asked.
Park replied, “I apologize that CTA is not here. We will get that information.”
Hairston was not appeased.
“It’s always, ‘I apologize’ and ‘We will get back to you’ … The reason that you don’t do it is because you don’t respect the members of this Council. And that’s our fault because we don’t demand more of you.”