Chicago's Metra to raise fares for fourth year in a row

RELATED TOPICS: MIDWEST | CHICAGO | OPERATIONS | FINANCING
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CHICAGO — Locked into what officials call an “unsustainable” economic model, officials at Chicago’s commuter railroad approved a 2018 budget that includes service cuts and a fare increase — the fourth in four years — to close a $45-million funding gap.

Metra’s board of directors Friday approved a $797 million operating budget for 2018, along with a capital budget totaling $197 million, a figure which falls far short of the agency’s needs, officials said.

State sales taxes and state funding that pay about half of Metra’s operating budget, and local state and federal grants that provide nearly all of the agency’s capital budget are failing to keep pace with rising costs and the system’s aging equipment, officials said.

The fare increases, due next February, range from 2.3 to 12.6 percent, depending on the type of ticket and distance traveled, costing a typical suburban rider an additional $12.50 a month, or $150 a year.

Also in February 2018, Metra will cut 11 trains, mainly on low-performing lines and will consolidate some of the more than 700 trains it runs daily. Metra said it was the first time in the agency’s history that service is being cut to close a funding deficit.

The fare increases and cuts will make up only $20 million of the budget shortfall that Metra faces, the agency said.

Metra Board Chairman Norman Carlson defended the agency against criticism over pay increases granted to outgoing CEO/Executive Director Don Orseno, and to non-union employees

“We’ve been criticized by some who say we are not controlling costs. I beg to differ,” Carlson said. “We are doing a tremendous job.”

Recent cost reductions have been in excess of $20 million, he said.

Metra’s economic model is based on a structure that was created 40 years ago, with strong reliance on a sales tax base from brick-and-mortar retail stores and a manufacturing base. The Chicago-area economy has shifted toward a service base and growing on-line purchases, Carlson said.

According to Metra, normal growth in expenses accounts for about $30 million of the agency’s $45 million operating fund deficit. About $23 million of that growth is for labor and fringe benefits. Spare parts and materials for Metra’s fleet and other needs accounts for $5 million. Lastly, the cost of the federally mandated positive train control system, which will come on line in 2018, adds $2 million, Metra said.

The remaining $15 million is due to a shortfall in funding Metra receives from public sources, officials said. Fares cover about half of Metra operating costs, with the rest from a regional sales tax and a partial state match.

Metra said it originally anticipated receiving an additional $10 million from those sources in 2018, but the agency now expects a $15 million decrease, due to the decline in sales tax collections and cut in state matching funds and imposition of a surcharge on collection of those sales taxes.

The Regional Transportation Authority, which oversees Metra, the CTA and the suburban bus agency Pace, said Metra should be spending $1.2 billion annually to achieve and maintain a “state of good repair.” However, that figure is six times more than the $197 million that Metra has available next year, Metra officials say.

According to Metra, more than half of that capital funding will be spent on major projects, including locomotive rehabilitation ($20.5 million), railcar rehabilitation ($18.5 million), PTC installation ($30 million), and bridge replacement ($9 million.)

Metra also set aside $23.7 million for new passenger cars.

Board members say if Metra doesn’t get more funding from the state, fares will likely need to be raised again.

“Folks say this is too much,” board member Ken Koehler said. “But if they want safe and dependable trains, this is part of it.”

NEWSWIRETrains News Wire

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