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Federal Dollars Fuel CTA’s Ambitious Budget As Depressed Ridership Leaves Agency’s Future Revenues In Doubt

At the lowest ebb of pandemic ridership, the CTA was only seeing an average of about 250,000 riders each weekday. It’s bounced back to 750,000, only about half of its pre-pandemic number.

A CTA bus drives on Rockwell Avenue as snow falls on Wednesday, Dec. 16 in the North Center neighborhood.
Colin Boyle/Block Club Chicago
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CHICAGO — The CTA is moving forward with an ambitious budget for 2022 despite still-cratered revenues and ridership from the COVID-19 pandemic. Some highlights of the $1.7 billion spending plan include a permanent slash in the cost of multi-day passes, the introduction of more electric buses and continued upgrades for stations, tracks and other equipment. 

In its report on the budget, CTA says it expects a budget shortfall of more than $455 million in 2022. For now, federal money is going to plug that gap: $299 million left over from the Coronavirus Response and Relief Supplemental Act (CRRSA) and $156 million from the American Rescue Plan will bring the CTA to a balanced budget.  

Advocates hailed the permanent reductions in pass prices as a step forward for transit equity, even as they bemoaned the slow rate of change to greener modes of transit. 

But underlying the hard-charging plan is the question of what the agency will do when federal stimulus money runs out. Ordinarily, the CTA and its related agencies, Pace Bus and Metra, are mandated to fund half of their combined operating costs using farebox revenue, or money generated from riders paying to use the system.  

At the lowest ebb of pandemic ridership, CTA was only seeing an average of about 250,000 riders each weekday. It’s bounced back to 750,000 daily riders, but that’s still only about half of its pre-pandemic number.

As a result, CTA is expecting a farebox revenue total that’s higher than last year, but still only half of what it was in 2019. Ridership is expected to climb to 60 percent of its pre-pandemic volume in 2023 and 65 percent in 2024. 

For Audrey Wennink, the director of transportation at the Metropolitan Planning Council, what the agency will do after it’s used its federal money is “the million dollar question.” 

“That’s something that’s going to need to be addressed in a substantial way through conversations with the state legislature and thinking really creatively about the future of transit,” she told The Daily Line.

The Regional Transportation Authority, which oversees the Metra and Pace systems along with the CTA, backed legislation (HB 106) during last month’s legislative veto session that gives the three agencies a three-year holiday from the usual 50 percent farebox recovery mandate — the requirement that rider fares cover half of operating costs for the three combined systems. After that, Wennink said it may be time to reevaluate how rider fares should fund public transit, especially since the pandemic may have brought permanent changes to how people work and commute. 

“We need to be thinking about the value of transit to our region from many dimensions… and think about funding it from a different way because of the value that it provides to our society and to our region,” she said.

Fare discounts 

To boost its ridership, the CTA is making permanent a series of discounts on its 1-day, 3-day and 7-day passes. In the budget report, agency president Dorval Carter said a summer 2021 pilot showed that the discounts were “hugely popular” and produced 10 million rides over the season.

The price of 1- and 3-day passes will go down by $5 and the cost of a 7-day pass will be $20 instead of $28. Month-long passes will now cost $75 instead of $105, while reduced-price passes will cost $35 instead of $50. 

Active Tranportation Alliance Advocacy Manager Julia Gerasimenko said the price cuts are an important way for the CTA to encourage ridership among people with limited financial options, especially since rideshare prices have been high throughout the pandemic. 

“For those who are purchasing those passes, [the CTA] saw actually a 56 percent increase in rides compared to people who were paying as they go,” she said. “So I think that really bodes well for the agency to kind of get creative.” 

The agency has also axed its $0.25 transfer fees for riders who need to change trains or buses during their commute. 

Wennink said the move was “huge” in terms of increasing access and affordability for low-income riders, who are likely to have fewer transit options and a longer way to travel to get to work. 

“Eliminating the 25 cent transfer between buses or between buses and rail — that is incredibly helpful in terms of making transit more affordable, especially to people that have two-seat rides,” she said.

Gerasimenko echoed Wennink’s praise for eliminating transfer fees and discounting multi-day passes. One way she said CTA could make further changes to benefit their low-income riders is by implementing “fare capping,” a policy used in St. Louis, Grand Rapids and New York City.

“Once a rider taps enough times to reach the cost of, say, a daily or weekly or 30 day pass, they are no longer charged for any additional trips for the duration of that multi day pass,” she said. 

Electric Buses

The budget contains $278 million dedicated to replacing buses, an increasing number of which will be electric. However, the agency also settled on a $334 million contract to produce up to 600 new “clean diesel” buses, the first shipment of which will arrive in 2022.  

Wennink was disappointed to see the diesel bus contract go through.

“Those buses will be on the street for 10, 15 or more years,” she said. “Every time you make an investment in a vehicle that uses fossil fuels that has a lifespan like that, then you’re losing the opportunity to make quicker changes.”

She also said the Metropolitan Planning Council has been hoping to see a long-awaited report on the CTA’s electrification strategy. 

Gerasimenko said she’s glad to see the CTA investing in electric buses, noting that the agency has committed to making its system 100 percent electric by 2040. But she said the current rate of electrification won’t cut it given the size of the fleet, with about 1,800 buses in operation. 

This said, Gerasimenko acknowledged that electrifying a fleet the size of the CTA is a major undertaking.

“We understand from a budgeting perspective, there’s a lot that goes into making it feasible beyond just the buses themselves, like the charging infrastructure at the garages,” she said. “It’s going to take time and resources to really implement a network wide electric bus fleet.” 

 System Upgrades, New Offices and New Hires 

The 2022 spending plan also sets aside cash for track improvements and station additions. The agency plans to funnel $2.3 billion over four years into the long-promised Red Line extension between 95th and 130th Streets. That extension will include four new stations and almost six miles of new track. Construction should start in 2025, with service scheduled to start in 2029, according to agency officials.

The budget also earmarks money for three new positions in the CTA’s recently established Office of Innovation. The office works to “ensure a coherent strategy, think about data integration and management, and plan for potentially disruptive mobility technologies” like self-driving cars, budget documents show. The office’s total budget this year is $800,000.  

$2.4 million will go toward “a distinct unit dedicated to equity, outreach, and inclusion,” which the report said will build on previous education for staff and enhance a welcoming environment for CTA workers, riders and contractors.  CTA will make 140 new hires to staff these units.  

The CTA will hold a virtual public hearing on Nov. 11 to take feedback on the proposed spending plan. 

And Carter is set to present the CTA’s budget to the Cook County Board of Commissioners during its 10 a.m. meeting on Thursday, joining leaders of the Regional Transportation Authority, Metra and the Pace suburban bus system.