Pace, Metra hope to weather revenue free fall

Borrowing could be a short-term solution to budget woes facing the CTA, transportation leaders said Wednesday.

Lackluster consumer spending and the tanking housing market have led to a projected revenue shortfall of between $54 million and $87 million in 2008 and a $155 million loss in 2009 for the Chicago Transit Authority.

The CTA was supposed to have profited from a sales tax increase and a supplemental real estate transfer tax approved by the General Assembly last year to avert a doomsday budget, but the troubled economy has scuttled that plan, with money from both sources falling far below estimates.

"The question is how and in what direction do we approach 2008, since 2008 is over," CTA Board Chairman Carole Brown asked. "We can't say to the riders, 'You owe us money.'"

Regional Transportation Authority officials promised that they would work with the CTA to resolve budget gaps and were considering taking out short-term loans.

The problem affects Pace and Metra but to a lesser extent, since their revenue increases were limited to the sales tax boost.

Metra is expected to receive $27 million less for 2008 and $45 million less in 2009. Metra Executive Director Phil Pagano said Friday the agency was working with the RTA and considering several scenarios. On the plus side, fuel prices have dropped substantially below anticipated amounts, he explained.

Pace revenues could be down by $9 million in 2008 and $16 million in 2009. Officials don't anticipate looming fare hikes or service cuts, but the shortfall could affect some service expansions. "We're going to weather this as best we can without asking riders to shoulder the burden," spokesman Patrick Wilmot said.

Revenues for paratransit, which Pace operates, are expected to dip $5 million in 2009, which is "more of a short-term problem," Wilmot added.

Metra raised rates one year ago. CTA and Pace followed suit in January.

Mass transit agencies are also expected to get a windfall from the federal economic stimulus package. Although the dollars are restricted to capital spending, not operating costs, buying energy-efficient buses - for example - will save money on maintenance, RTA board Chairman Jim Reilly suggested.

He also predicted the General Assembly will approve a gas tax increase to help fund roads and public transit.

"There are options to get through 2009, hopefully without service cuts and fare increases," Reilly said. "

Anticipating a sales tax dip in September 2008, the RTA board agreed to borrow $21 million to make 2008 payments to the transit agencies.

While CTA budget planners suggested the shortfall might be $87 million, the RTA is predicting $54 million. Sales tax figures are not final yet.