Metra has proposed a 2018 operating budget of $797.2 million that includes fare increases and, for the first time, cuts in service in order to close a $45 million budget deficit caused by rising expenses, a reduction in state aid and disappointing sales tax revenues. Metra also proposed a 2018 capital budget that totals $196.8 million from its available funding sources – only one-sixth of its estimated annual need.
The operating budget deficit in 2018 and the continuing, severe shortfall in funding for Metra’s capital reinvestment needs point to a growing problem with local, state and federal subsidies for public transportation in the Chicago area. The sales taxes and state aid that fund about half of Metra’s operating budget and the local, state and federal grants that pay for nearly all of its capital budget are not keeping up with rising costs and our aging system’s replacement and renovation needs.
“The current situation is unsustainable, and threatens the future viability of the important service Metra provides,” said Metra Chairman Norman Carlson. “With the proper amount of sustained public investment, we can create a system with a long and bright future. It is clearly in the interest of the citizens of northeast Illinois for Metra to do so.”
Metra is proposing a combination of fare increases and cuts in expenses, including cutting a small number of trains, to close the budget gap. Under the budget proposal:
- The price of One-Way Tickets would increase by 25 cents in all zones (a 2.3 percent to 6.7 percent increase). Customers who ride Metra 30 times a year would pay an additional $7.50.
- The price of 10-Ride Tickets would increase $4.25 to $7.75 (8 percent to 12.6 percent) depending on the zone.
- The price of Monthly Passes would increase $9 to $12.50 (4.1 percent to 8.4 percent) depending on the zone. That would be an annual increase of $108 to $150.
- The price of Weekend Passes would increase to $10 from $8 but they would now be valid on Friday evenings (trains arriving or leaving downtown after 7 p.m.) in addition to all day Saturday and Sunday.
- Reduced fare ticket prices also will increase, but an earlier proposal to eliminate the reduced fare Monthly Pass has been scrapped.
- The proposed new fare table is here.
In addition, a small number of weekday trains would be curtailed or eliminated on the North Central Service, SouthWest Service and Rock Island Line, and weekend trains would be cut on the Milwaukee District North Line. (Full details are here.)
Normal growth in expenses account for about $30 million of the $45 million deficit for next year. About $23 million of that growth is for labor and fringe benefits. The cost of spare parts and other materials to keep our aging fleet of equipment operating will add $2 million and growth in other materials and services will add $3 million. Finally, the cost of operating the new Positive Train Control (PTC) safety system, which is partially coming on line in 2018, will add $2 million.
The remaining $15 million is due to a shortfall in the amount of funding Metra expects from public sources. Fares typically pay for about half of Metra’s operating costs, with the rest paid by Metra’s share of proceeds from a regional transportation sales tax and a partial state match. The RTA initially projected Metra would receive an increase of $10 million from those sources, but has now told Metra it will see a $15 million decrease – a $25 million swing. A decline in sales tax collections accounts for $2 million of that decrease, while a cut to the state match and the state’s imposition of a surcharge on the collection of those sales taxes account for the remaining $13 million.
The proposed fare increase will generate about $17 million to help close that $45 million deficit, which would be an increase in fare revenue of 4.8 percent over 2017. In addition, instead of using about $32 million in fares for its capital program, as it did it 2017, Metra will only use about $20 million, keeping $12 million in the operating budget to help cover the deficit. It expects to gain an additional $2 million from other revenue and funding sources.
The proposed service cuts will save about $3 million. Personnel actions, including not filling some positions, will save $5 million. Metra will cut $1 million from its advertising budget and will save $1 million in electricity costs and $3 million in IT and telecomm costs, largely from switching to a new phone system. A variety of smaller efficiencies will save about $1 million. These efficiencies are in addition to nearly $25 million in efficiencies achieved over the past seven years.
Metra’s $196.8 million capital budget will be funded with $171.6 million from federal sources, $4.9 million in RTA Innovation, Coordination and Enhancement grants and $20.3 million in fare revenue. Metra is anticipating no new capital money from the state of Illinois. The RTA estimates Metra needs to spend $1.2 billion annually to achieve and maintain a state of good repair on its system – six times as much money as available next year.
More than half of those limited capital funds will be spent on major capital projects, including locomotive rehabilitation ($20.5 million), car rehabilitation ($18.5 million), the installation of the federally required PTC system ($30 million) and bridge replacement ($9 million). Metra earlier this year issued a request for proposals for new railcars, and is setting aside $23.7 million in next year’s capital budget for that purchase.
The rest of the capital budget will be spent on routine needs such as rail and tie replacement, road crossing replacement, engineering and sprucing up a limited number of stations through our in-house station beautification program.
The proposed 2018 budget will be the subject of a series of eight public hearings throughout the Chicago area. (schedule here). Metra customers and members of the public are encouraged to attend and provide comments on the proposed budget.
Comments on the proposed budget can also be emailed to 2018budgetcomments@ metrarr.com, faxed to 312-322-7094, shared via facebook.com/MetraRail and mailed to the Assistant Secretary to the Metra Board, Room 1300, 547 W. Jackson Blvd., Chicago, IL, 60661.
Metra will also include a budget comment form in a special budget issue of the “On The Bi-Level” commuter newsletter. Completed newsletter forms may be mailed to the above address or dropped in one of Metra’s Ticket-by-Mail receptacles at Chicago Union Station, LaSalle Street Station, Ogilvie Transportation Center, Van Buren Street Station or Millennium Station. All comments received will be presented to Metra’s Board of Directors prior to voting on the final budget in November 2018.
For more information about Metra’s proposed 2018 budget, including a Q&A and board presentations, please click here.