In the face of a nearly $70 million budget shortfall, the Chicago Transit Authority is laying off 80 employees but not raising fares or reducing service, agency president Ron Huberman announced Monday.
"The CTA said fuel and energy costs alone will amount to $37 million more this year than last year," CBS 2's Joanie Lum reports.
Shades of last year's doomsday scenario? You bet:
It's the same story and a new year. Everything cost more, and the CTA is hit hard once again. But this year, the free rides cost the CTA the most. Last year, Gov. Rod Blagojevich demanded free rides for seniors as a condition of a state bailout for the CTA, and free rides were later granted for military personnel and the disabled.
Altogether, the free rides add up to $20 million in revenue that will not be collected. Add that to labor, fuel and lost taxes, and the CTA has a $66 million projected shortfall.
For now, though, the CTA is limiting cuts to its own administration.
"We are engaging in over $40 million worth of belt-tightening initiatives to close the belt for 2008, and position us, so to speak, with a tighter belt for 2009," Huberman said.
Planned measures include the recent elimination of 43 positions and cuts to 80 administrative positions before the end of the year. The move involves both layoffs and the elimination of vacant positions, the CTA said. The cuts will save $4.9 million, according to the CTA.
John Hilkevitch also points to Gov. Blagojevich's free rides for seniors program as a key contributor to the CTA's budget deficit, but the Tribune pegs the cost to the CTA at $30 million, 10 million more than CBS reported.
The budget crisis was exacerbated by Gov. Rod Blagojevich's decision to provide free rides for senior citizens and low-income disabled passengers. That will cost the agency at least $30 million this year.The governor also vetoed more than $16 million in reduced-fare subsidies this year for the CTA in the state budget.
However, fare increases and service cuts remain a possibility down the line.