Interesting...the CTA's proposed 2006 budget has a higher price for rail than for bus.
Check out page 48 of the CTA's budget here.
The fare for rail will be $2.00 and the fare for bus will be $1.75.
And yet....electricity which powers the rail is generated in Illinois while oil which powers the buses is generated in Saudi Arabia.
I'm sure it's more expensive to run the El than a bus, since the City pays to maintain the streets while the CTA pays for to maintain the rail and the stations and the station attendants. But it would be smart if public policy can reward power that generates wealth in the U.S. instead of power that generates wealth (and power) in other countries -- especially those that have been tight with our enemies.
9 comments:
Also, aren't they proposing the fare raise due to high fuel costs?
You know, part of the fight over the power auction is that ComEd and the other companies that own generators in Illinois want to be able to sell that power anywhere to anybody, even though the generators are here. And since others will pay more for it, our power bills are going up. The dereg now means that there's no reason to put up with generators in your back yard; your rates are still set by what people hundreds and thousands of miles away will pay for it. That's the free market.
And you thought Sox Park was offensive?
It would be nice to consider more advertising or sponsorship revenue-
Didn't it used to be $1.50 back in 1997-1998? $2.00 in 2005 would be a compound annual increase of over 4%? (assuming 7 years of growth from $1.50 to $2.00)
Is seems a little higher than inflation. Little bits more than inflation add up over long periods of time. The CTA should benchmakr fares to the CPI and ifnlation.
One other thing: did you see they said the CTA has more interest income this year due to higher interest rates? This means people in your district that have debt may have higher interest expense in addition to high home heating and auto gasoline bills.
The CPI ex-certain items (including energy) was only 0.1% in the recent month (or around 1.3% annual). So I do not think a $.25 rate increase (on $1.75 base) should be based on an increase in the CPI. The fed govt already gave lots to the energy industry. IL is working on stuff as well-
The CTA should give out slightly smaller raises on average this year. Look to shave 0.1% to 0.25% from payroll and hold off on the fare increase until 2007-
http://www.econbrowser.com/archives/2005/10/inflations_back.html
This is an interesting discussion of inflation.
Historical inflation in the late 1990s and 200s was under 4%. How does this compare to CTA fare increases?
Regarding recent increase in inflation: it is pretty much all energy. If the fed (Greenspan) keeps raising interest rates to "squash" inflation, they will have to raise rates to the point of lowering prices on non-energy to counter higher energy prices. This would surely mean some pain somewhere in Chicago and possible a nationwide recession/slowdown.
How much of the CTA's budget is energy? Doesn't the CTA have other offsets it could make? (slightly lower wage and payroll expense, etc)?
I don't like CTA increases if they average out to more than 4% per year. This hurts lower income people more than higher income people.
Here is my proposal:
The fare increase is projected to provide an extra $17 million (p7 in the link you provided).
I propose avoiding the fare increase and finding the $17 million elsewhere (proposal follows)
1. Payroll - Payroll is the biggest expense at around $700 million per year (See page 43 in your link. This dwarfs the expense for fuel (around $30 to $40 million per year) (granted, energy may figure into power expenses). A 1.0% savings on payroll would get you $7.0 million. I do not know how this would go over with unions...
2. Increased advertising and concession revenue (find around $5 million)
3. Higher volume (more passengers) - use a viral technology marketing campaign that encrouages people in Chicago to use the CTA more. "Viral" means email and internet message sthat can be forwarded around the city to friends and workers that encourage people to use the CTA more and drive less. This viral marketing campaign could be very cheap to put together and could result in a big boost in CTA volume.
The messaage is compelling: take the CTA at $1.75 and save on gas and parking (and avoid risk of accident!). Make Chicago a better place (more sound economy, safer, energy independent)
No one has ever encouraged me to use the CTA. No one has explained to me the benefits of more passengers on the CTA (eg, more revenue for CTA and less of a need to raise fares).
Hey guess what, Conservatives really are just fear mongering bigots:
http://www.berkeley.edu/news/media/
releases/2003/07/22_politics.shtml
CTA fares go up faster than inflation because its public funding does not KEEP UP with inflation. By state law, 50% of the costs of the RTA come from customer fares (which, incidentally, is a WAY higher customer burden than in Red state places like Atlanta, Phoenix, and Houston). So if public funding doesn't keep up with inflation, CTA fares go up faster than inflation just to keep up with costs.
Since 1983, the last time the State changed transit funding, if you include $2 proposal, CTA fares will go up 122%. Over the same period Pace fares have gone up something like 65%, and Metra fares 25% after the proposed 5% increase this year. Inflation since 1983 is in the 60-70% range.
We've got to ask ourselves the purpose of public transportation -- if we want people to pay their own way, just raise fares to $5 and see ridership drop dramatically (lotsa folks in my neighborhood would just drive at that price). OR, we can recognize that the people who benefit most from transit are the drivers who benefit from fewer cars on the road and faster travel -- and so we should provide the funding $$ necessary to cut fares more to encourage ridership.
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