Governor repeats opposition to sales tax hike to solve transit crisis

Service cuts and fare hikes for Pace and CTA riders have been put off until Nov. 4 under a last-ditch temporary bailout deal OK'd by transit officials today.

But as the new "doomsday" deadline now looms 51 days away, the governor and legislative leaders are still worlds apart on how to provide a long-term funding plan that would prevent the transit system from essentially falling apart during the holidays and into the new year.

The wide gulf between politicians was highlighted this afternoon when Gov. Rod Blagojevich went before cameras yet again to denounce a sales tax increase proposal - one that legislative leaders and transit officials seem to agree on.

"It is wrong … On the one hand, you say you are giving them relief by keeping fares where they are, but at the same time … you have gone into their other pocket and taken out money with a sales tax increase," Blagojevich said.

Instead, the governor has put forth un-detailed plans to raise business taxes. Today he floated one such tax, taking back the 1.75 percent of sales tax kept by retailers as a fee for processing consumer taxes.

The plan would raise about $100 million, said John Filan, the governor's budget adviser. That is far short of the $400 million-plus the transit officials say they need and the $240 million they are already in the red this year alone.

The business tax proposals have been declared non-starters by several key lawmakers, who point out it would require the entire state to pay for Chicago area transit. The sales tax hike proposal is restricted to the northeastern six counties.

The debate will continue in Springfield on Monday when senators could take up a vote on the sales tax plan along with a major expansion in public works projects funded by new casinos.

Meanwhile, transit riders can breath a sigh of relief - for now.

Pace was set to raise fares 25 cents on local routes and 50 cents on the collar county para-transit system this Sunday. CTA was on the verge of slashing 39 bus routes and raising fares by up to $1 as well.

Those measures will now take effect Nov. 4, but transit officials are also planning CTA el service cuts, the discontinuation of CTA/Pace passes, elimination of all suburban weekend service and more drastic fare hikes by early next year.

The temporary bailout comes in the form of an $84 million advancement on next year's state transit subsidy.

The governor came forward with the deal Wednesday morning and the Regional Transportation Authority board approved it today in a 10-2 vote.

The plan essentially digs the transit agencies into a much deeper financial hole for next year, but RTA board members said it was better than going forward with cuts and fare hikes that could be avoided.

"This is not a good idea. But at the end of the day we have to remember we are dealing with people's lives," said RTA chairman Jim Reilly.

Board member Judy Baar Topinka, former state treasurer and one-time GOP challenger to Blagojevich, was one of the dissenters. She blasted the governor's inaction on finding a long-term funding plan sooner.

"This has been dumped here by an administration that wants to wipe its hands of the issue," Topinka said.

She also took aim at legislative leaders, noting that transit officials have spent nearly a year and $3 million trying to get lawmakers to approve a funding plan.

"A woman could bring a baby in 9 months, but the legislature can't put together a transit package," she said to a chorus of laughs at the packed board meeting in Chicago's loop.

When told of Topinka's comments and vote, Blagojevich recited a mantra from his onslaught of negative campaign TV ads against her.

"The only thing I can say is: What's she thinking?" he said with a smirk outside a downtown CTA station.

Reilly said he was told by the governor's staff that Blagojevich would be coming out with his own counter plan to the sales tax hike proposal, but they didn't give him an indication of when or what it contained.

The sales tax hike would add 50 cents to every $100 bill on merchandise in the collar counties and 25 cents on the same tab in Cook County.

The plan also calls for a Chicago real estate sales tax that would help bail out the CTA.

Half of the money raised in the collar counties would go to officials in those counties to be spent on road upgrades.

The tax increase plan is supported by a broad coalition of business, union, academic and industry groups as well as several suburban and Chicago politicians.

The measure failed in the House last week, in part because of the governor's opposition.