Suburban bus fare hikes might be on the horizon

It was a bit of a financial roller-coaster at the Regional Transportation Authority Monday as officials shook their heads at multimillion-dollar revenue challenges, took heart from the fact transit agencies are getting a windfall from a sales tax boost, and speculated that future fare hikes could be inevitable.

The Illinois legislature approved the sales tax increase in January to avoid a mass transit doomsday scenario of service cuts, fare hikes and layoffs. But as a condition of getting Gov. Rod Blagojevich's approval, a program offering seniors free rides was included.

Now although they're getting extra money from the sales tax increase, the Chicago Transit Authority, Pace and Metra are also experiencing skyrocketing fuel costs and lost revenues from the free rides initiative.

RTA budget experts said the slumping economy has caused receipts from the sales tax to be sluggish and 3 percent lower than estimates, according to the most recent figures. As a result, the RTA will borrow about $21 million to be distributed to the three agencies so they can finish 2008 in the red. The money is considered a loan.

In addition, RTA staff projected that a combination of high gas costs, giving free rides to seniors and disabled individuals (another new program set to start in October), cuts to state funding, and higher maintenance costs because of no capital funding will mean about $190 million in extra budget pressures.

Still RTA Chairman James Reilly noted that the sales tax increase of one-quarter of 1 percent across the area should provide for a healthy 2009.

"It's a fairly normal budget year," Reilly said. "It's not easy but it's doable."

But he cautioned that higher fares could be on the horizon for the CTA and Pace. Metra boosted ticket prices by 10 percent in February.

"It depends on how much efficiencies they can find," Reilly said.

Modest fare increases on a regular basis can be palatable, he noted, compared to big hikes during budget crises.

"There's no doubt mass transit is even more of a bargain than ever," Reilly added.

Also Monday, the RTA announced how much funding it will allocate to the three agencies and set percentages for fare box recovery ratios, which means how of their revenues should come from tickets and passes. The ratios are 50 percent for the CTA, 55 percent for Metra and 36 percent for Pace.

The agencies have until Nov. 15 to submit their budgets to the RTA.