The Metra Board today approved a $797.2 million operating budget for 2018 that includes fare increases and trims in service in order to close a $45 million funding gap. The Board also approved a 2018 capital budget totaling $196.8 million – only one-sixth of Metra’s estimated annual need.
As they voted to approve the agency’s 2018 budget and capital program, Board members noted that the shortfalls in funding for both operating and capital needs point to a growing problem with local, state and federal subsidies for public transportation. 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’s 2018 budget includes a combination of fare increases and expense cuts:
- The price of One-Way Tickets will increase by 25 cents in all zones (a 2.3 percent to 6.7 percent increase).
- The price of 10-Ride Tickets will increase from $4.25 to $7.75 (8 percent to 12.6 percent) depending on the zone.
- The price of Monthly Passes will increase from $9 to $12.50 (4.1 percent to 8.4 percent) depending on the zone.
- The price of Weekend Passes will increase to $10 from $8.
- The price of Reduced Fare tickets and passes will also increase. All fare increases will take effect on Feb. 1, 2018. Full details can be found here.
In addition, a small number of weekday trains will be curtailed or eliminated on the North Central Service, SouthWest Service and Rock Island Line, and some weekend trains will be cut on the Milwaukee District North Line. This marks the first time in the agency’s history that service has been cut to close a funding deficit.
For 2018, normal growth in expenses accounts for about $30 million of Metra’s $45 million operating funding deficit. About $23 million of that growth is for labor and fringe benefits. The cost of spare parts and other materials to maintain Metra’s aging fleet of equipment adds $2 million and growth in other materials and services adds $3 million. Finally, the cost of operating the new Positive Train Control (PTC) safety system, which will begin to come on line in 2018, adds $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. Original projections were that Metra would receive an increase of $10 million from those sources in 2018, but we are now expecting a $15 million decrease – a $25 million negative swing. Declining sales tax collections account for $2 million of that decrease and a cut to the state’s matching funds as well as the state’s imposition of a surcharge on the collection of those sales taxes account for the remaining $13 million.
Metra’s 2018 budget closes this $45 million shortfall through a fare increase ($17 million), a reduction in the amount of fare income diverted to its capital program ($12 million), other revenue and funding sources ($2 million), service cuts ($3 million), personnel actions ($5 million) cuts to its advertising budget ($1 million), reduced electricity costs ($1 million), reduced IT and telecomm costs ($3 million) and other efficiencies ($1 million).
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 more money than actually available next year.
More than half of those limited capital funds will be spent on major capital projects, including locomotive rehabilitation ($20.5 million), railcar rehabilitation ($18.5 million), installation of the federally required PTC system ($30 million) and bridge replacement ($9 million). Earlier this year, Metra issued a request for proposals for new railcars, and is setting aside $23.7 million in 2018 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.
Find a complete copy of Metra’s 2018 budget here.