A vote by RTA directors Wednesday ended the latest transit funding crisis, giving the CTA a green light to borrow $1 billion over the next three years for improvements.
Skepticism by some Regional Transit Authority directors over the CTA's ability to pay back proposed bonds delayed a budget vote that should have occurred in December. The RTA has financial oversight of Pace, Metra, the CTA and paratransit, the service for disabled individuals operated by Pace.
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Some suburban directors had feared funding for Metra and Pace would suffer if the CTA couldn't pay back its loans.
Director Bill Coulson of Glenview still had questions Wednesday. "What new revenue or expense cuts will pay (for the bonds)?" he asked. "Where are they going to get the money?"
Continued growth in sales tax revenues, which pay for about half of transit operations in the region, should provide a stable source to pay back the CTA's loans, RTA financial staff members said.
The RTA projects a 2.75 percent growth in the sales tax next year as the economy improves. In addition, the CTA is expected to see a jump of 2 percent in real estate transfer tax revenues, which help fund its operating budget, RTA spokeswoman Diane Palmer said.
"In a time of historically low interest rates and a need to invest in infrastructure ... it makes sense to make investments sooner rather than later," Chief Financial Officer Bea Reyna-Hickey said.
The RTA is not liable for the CTA bonds, Executive Director Joe Costello told directors.
Both Metra and CTA are raising fares in 2013. Metra riders who use 10-ride passes will experience an 11 percent increase starting Feb. 1.
While base rates on buses and trains remained stable, Chicago Transit Authority passengers are paying more for passes as of this week. A one-day pass is now $10, a three-day pass is $20, a seven-day pass is $28 and a 30-day pass is $100. The CTA/Pace seven-day pass is now $33 and the Metra Link-Up pass is now $55.
The CTA loan will fund a wide range of upcoming capital projects including new bus purchases, track replacement and slow-zone remediation and rail station reconstruction, spokesman Brian Steele said.