Public transit in New York City, the most populated city in the United States, is probably everything you could imagine it to be. The New York City Transit Authority, branded as MTA New York City Transit, is by far the largest and busiest transit system in the United States and North America. The system comprises of a subway system, railway system, a bus system, and a bus rapid transit system. In first place ahead of Chicago, it has many similarities to the CTA.
How the NYCTA operates:
New York City Subway
Owned by the City of New York, is the subway rapid transit system operating in Manhattan, Bronx, Brooklyn, and Queens.
Staten Island Railway
Rapid transit line in Staten Island.
NYCT Department of Buses
A bus network serving all boroughs, operated under MTA Regional Bus Operations.
Dynamics of each:
New York City Subway
The New York City Subway system is the largest rapid transit subway system in North America, consiting of 468 stations across a 842 track-milage system. The system offers 24-hour service across all boroughs except for Staten Island. The general fare is the same as Chicago, $2.25.
The ‘L’ in Chicago has a long standing culture attached to it, but its depth compared to the New York City Subway can be debated. The MTA in New York sponsors a program called Music Under New York. More than 300 performers and music ensembles participate in over 7000 annual performances in about 25 stations across the system. There are also several retail outlets built by the MTA for businesses to sell newspapers and other products to transit users daily.
Like Chicago, the MTA experienced a budget crisis. Train fares increased 3 times from 2008 through 2010. Similar to Chicago, part-time train routes were cut and several bus lines were cut, shortened, or rerouted.
The subway system has its fair share of problems that Chicago most of the time does not have. Often times due to aging systems and poor construction, subways are heavily flooded during storms. This causes big delays and disruptions to service. Since 1992, over $300 million has been used to improve 269 pump rooms.
Terrorism is another big issue the MTA has to deal with on their subways. After the September 11 attacks, subways have been targeted or plotted on several times, even as recent as 2008 and 2009.
NYCT Department of Buses
The NYCT Department of Buses is the division of the MTA that serves as the bus system for New York City. It is operated by its parent company, the MTA Regional Bus Operations (founded in 2008) and has 12,499 stops, 181 local and limited-stop routes, 27 express bus routes, and 3 Select Bus Service routes.
Buses are labeled with a prefix (B for Brooklyn, Bx for the Bronx, M for Manhattan, Q for Queens, S for Staten Island, and X for Express) and a number.
A unique feature that the NYCT Department of Buses has is color coded bus stops. These codes not only have the bus number and prefix on it for the select route that stops there, but it tells the rider what type of route it is. Blue is for a local service route, purple is a limited stop route, green is for an express route, black is for late night routes only, turquoise is for the Select Bus Service, and yellow is for special school service buses. Chicago could greatly benefit from that if it decided to reform its bus system.
Fares are the same as CTA buses, $2.25 general fare for a one-way trip.
Staten Island Railway
The Staten Island Railway is one rapid transit train line running north-south through Staten Island (14 miles long). At its final north stop, it offers a ferry service to get to Manhattan (Staten Island Ferry).
Interview w/ Chicago resident and NYC MTA user:
By Calvin Nichols
Public transit in Chicago is much like other cities, all while being much different from other cities as well. You can already figure that Chicago being the 3rd largest metropolis in the country, the public transit system must be expansive. This is true, but do all large cities have a transit system similar to Chicago’s? Well let’s see…
How about Los Angeles? To much surprise, the second-largest metropolis in the United States does not have a system as large as Chicago’s public transit system, but it does have its own complexities. The Los Angeles County Metropolitan Transportation Authority (LACMTA or MTA), branded as Metro, is the public transit system serving the City of Los Angeles and some adjacent Los Angeles County communities. It ranks as the third-busiest transit system in the country behind New York City and Chicago. The system comprises of Metro Rail, Metro Liner, Metro Bus, and Transitway systems. The system can be better understood here:
- Blue Line
Opened in 1990, this is a light rail line that runs a length of 22 miles from Downtown LA, through South Central Los Angeles, Watts, Willowbrook, Compton to Long Beach. Its daily ridership is approximately 90,109 as of July 2011.
- Red Line
Opened in 1993, this is a heavy rail subway line that runs a length of 16.4 miles from Downtown LA to North Hollywood. Its daily ridership combined with the Purple Line is approximately 179,000 as of July 2011.
- Purple Line
Opened in 1993, this serves as a sub-line of the Red Line and runs from Downtown LA to the Mid-Wilshire district of Los Angeles.
- Green Line
Opened in 1995, this is a light rail line from Redondo Beach to Norwalk, CA. The line indirectly serves LAX via a shuttle bus. Its daily ridership is 45,259 as of July 2011.
- Gold Line
Open in 2003, this is a light rail line from East Los Angeles to Pasadena by way of Downtown LA. Its daily ridership is 42,900 as of July 2011.
The Metro Liner is the MTA bus rapid transit system. A bus rapid transit system (BRT) is a system used to provide faster more efficient transit than a normal bus line, similar to a rail system. The speeds of the bus systems typically match the speeds of a light rail line. In Los Angeles, the Metro Liner is used as a combination to the city’s rail lines and stop only at designated stations. This is a public transit feature that Chicago does not have. The CTA utilizes only high-capacity heavy rail lines for ‘L’ trains and the trains cover almost all areas of the city.
The MTA utilizes three types of bus systems, unlike the CTA. The buses are color coded and breakdown like so:
- Metro Local
The Metro Local buses are the closest thing to Chicago’s CTA buses. They are Orange colored and numbered and make frequent stops on major streets just like CTA routes do. There is a total of 189 bus lines and 18,500 stops in the City of Los Angeles.
- Metro Rapid
The Metro Rapid buses are buses that are numbered and painted Red. This is something the CTA does not have. These buses have no schedule and only stop at the busiest intersections and on the busiest thoroughfares.
- Metro Express
The Metro Express buses are composed of 2 lines, with buses painted dark blue. This is a premium service that makes stops along Los Angeles County’s freeway network.
Transitways in Los Angeles County are shared-use bus corridors and high-occupancy vehicle roadways that run down the medians of highways. Currently there are 2 Transitway bus routes for travel throughout Los Angeles County, the El Monte Busway (opened in 1974), and the Harbor Transitway (opened 1998). Transitways are used for long-distance travel across the county, as opposed to travel within the city.
The entire system can be seen here:
Metro Rail Map:
Metro Rapid System:
|Base Fare (Silver Line)||$2.45||$1.15|
|Metro Day Pass**||$5.00||$1.80|
|Student Fare Card (with monthly stamp)||$24.00|
|College/Vocational (with monthly stamp)||$36.00|
|Zone charge (per zone, maximum two zones)||$0.70||$0.30|
|Monthly zone stamp (per zone, maximum two zones)||$22.00||^|
After much research and comparisons, my preconceived notions about public transit have changed. I thought that travel in Los Angeles was centered around driving, which still remains true as told by ridership totals. But their mass transit system is highly developed. The MTA differs from the CTA by one obvious factor, the CTA serves the City of Chicago and its immediate suburbs; the MTA serves the entire County of Los Angeles, which is substatially larger than Cook County. The other differentiating factor is the method of transportation each system is centered on. In Chicago, it is our ‘L’ system comprising of 8 heavy rail lines. The CTA has twice as many rail lines as Los Angeles, and none of them are light rail, giving the ‘L’ the advantage in capacity. The ‘L’ also offers 24-hour service on its 2 longest lines, and near round the clock service on all others. In Los Angeles, the transit system is centered on buses. The MTA has 7 different unique bus services that span the entire county. The MTA also utilizes the freeway system of the county, something that the CTA only does with two ‘L’ lines and not their buses. Chicago’s bus system is comprised of CTA buses and the immediate suburbs have their own bus services like Pace.
What I have determined from my research is that each system is unique to its own landscape and resident habits. Even though the MTA serves a much larger area, it is still far smaller than the CTA and used far less than the CTA. The MTA has 79.1 route miles of rail and 1,433 route miles of bus. Daily ridership of the MTA totals around 1.4 million weekly. The CTA has around 222 route miles of rail and around 2,230 route miles of bus, even though the CTA bus system is more simplistic than the MTA’s bus system. Daily ridership of the CTA is around 1.6 million weekly, even with Chicago having around 1 million less citizens. Both cities can utilize techniques from each other to better the experiences of their customers because both work well in certain respective areas.
Due to the major CTA budget deficits in the past three years, the transit agency planned to layoff more than 1,100 employees in 2010. Chicago Breaking News Center says The labor union layoffs along with 18 percent reduction in bus service and 9 percent in train service were implemented in hopes of reducing the budget deficit for the following year. CTA management introduced more than $200 million in internal cuts as well as other cost savings and wanted unions to agree to salary and concessions however, unions representing CTA bus and rail workers refused since they agreed to concessions in the past.
The unions also felt that the “agency violated contract provisions pertaining to the seniority of full-time and part-time employees”. The unions argued that the CTA laid off too many full-time employees while retaining part-time employees. Arbitrator, Edwin Benn does want CTA to follow proper procedures in laying off workers based on seniority within their job classifications. 241 Local and 308 of the Amalgamated Transit leaders of the unions agreed to meet with the CTA management after Benn’s decision. CTA President Richard Rodriguez wanted to try and prevent the service cuts and wants to restore jobs. The union leaders were disappointed in the Arbitrator’s decision and requested to postpone the cuts for at least 30 days for seeking additional funding from the State or other options in general.
In September 2010, Rodriguez stated that the CTA was supposed to receive 83 million in bond proceeds and made an agreement to hold fares for both 2010 and 2011, but would have the freedom to raise fares if the state failed to pay public subsidies and capital funds. The CTA budget for 2011 was 5 percent higher than 2010’s budget, which was partly caused by a 3.5 percent increase in wages for union bus and rail employees. Labor costs make up 70 percent of the CTA’s budget.
Non-union CTA employees last received salary increases in 2006, however their wages were frozen this year and they had to take up to 18 unpaid furlough days and holidays to help manage the budget deficit. 100 non-unions jobs were cut this year, and an estimate of 70 jobs plan to be cut next year. Chicago Breaking News Center also says Rodriguez has tried to convince union workers to accept concessions to also help ease the annual budget and prevent future service cuts. Union leaders however stood strong on their decision since they had done it in the past and decided to allow more than 1,000 union members to be laid off.
In October of this year, According to Chicago Tribune the CTA laid of three media relations employees as part of an “agency-wide reorganization” to reduce the budget plan for 2012. It laid off the general manager of public affairs, manager of media relations as well as a spokeswoman leaving only four employees working on media relations under Sullivan. The $277 million budget deficit is projected to be cut down. $177 million would be from the senior-level position layoffs. The CTA is also hoping for 80 million worth of partly from agreements of concessions of union workers while also planning to use 80 million from its reserve fund.
By Amber Smith
Public transit has come a long way since its earliest days in Chicago. Original horse drawn service began in 1859. By 1947, the Chicago Transit Authority is granted the exclusive right to own and operate a unified, local transportation service and became the sole operator of Chicago transit. According to the Chicago Transit website, today, the CTA operates the nation’s second largest public transportation system. To some, it is an everyday means of travel, to work, school, friends, and/or all sorts of attractions. It opens up the city to everyday consumers, rain or shine, night or day, and aims for affordable access for everyone.
There are over 1.6 million people who depend on the Chicago Transit Authority (CTA) as a means of transportation on an average weekday. The 2011 budget estimated systemwide ridership to be 521.8 million, with a projected ridership that will end the year at 524.4 million, meaning there is a slight increase in ridership this year than estimated. The CTA has been able to provide a public option of transportation for the city of Chicago. Whether it is using this form of transportation around downtown, or to the 40 suburban communities that are also accessible, the CTA attempts to offer a quality and affordable transit service to serve the people. However, just as most businesses have been hit hard with the recession, the CTA is no exception. The CTA faces monumental financial complications.
According to a press release from the CTA, “Throughout the budget process, our goal has been to manage responsibly and make strategic budget decisions so that we can weather this recession and still provide the critical, affordable services that so many working men and women rely on,” said Chicago Transit Authority President Richard L. Rodriguez. Rodriguez supported the 2010 budget cuts made in order to not increase the current fare price for consumers. The Regional Transportation Authority (RTA) was created by state legislation and is the CTA’s fiscal oversight agency. Between the RTA and the State of Illinois, the RTA agreed to issue debt to provide an additional $83 million to the CTA in 2010 and 2011. This debt allowed to hold the same fare prices over those years, however, it is not predicted to reoccur in 2012. This could prove problematic and lead to fare increases in the near future for CTA riders.
The overall approval of the past budget meant service reductions, furlough days for workers, elimination of 1,100 jobs, bus service reduction by 18%, and rail service by 9%. There are currently 41 bus routes with later start times and/or earlier end times. Besides the routes cut altogether, these reduced routes (as featured on the chart) support increased planning of travel by tracking the arrival times of buses and trains. This timing was made possible with the advancements in technology. CTA Bus Tracker and CTA Train Tracker offer a way to plan your transportation online, so riders can plan accordingly to avoid to extended wait.
As previously mentioned, the Chicago Transit Authority has undergone several budget cuts in the past years. The CTA president also proposed a 1.24 billion 2012 budget recommendation plan to address the financial struggles they continue to face today. This year, escalated fuel prices and increased electric power, used for extreme weather conditions, went over budget in those allotted areas. The CTA has recovered from small setbacks due to adjustments in their budget. However, the 2012 operating budget faces bigger issues. It lacks $131.2 million that was available the previous year. As featured in the CTA’s budget breakdown, the debt is projected to exist until 2033.
The outcome for the Chicago Transit Authority might seem problematic, but, in the past, they have made it through other financial hardships. They are currently in the process of trying to avoid further service cuts and fare increases through different measures, most articles suggest union work rule changes.
The Chicago Transit Authority offers full opportunity for consumer feedback on their website. Next year seems in need for further budget cuts. It will be interesting to see if fares end up increasing and/or the union will reach some sort of agreement with the CTA. Comparing the entrance fee to get into a cab in Chicago is about the same price as an entire trip on the CTA, I would still consider a quarter-more hypothetical price increase to be a bargain.
By Ashley Prete
Ashley*, a UIC student who was robbed on the CTA, shares with us her experience through an online Q&A.
*Name has been changed
Q1: What happened when you were robbed on the CTA?
A: I was walking up the stairs to get to the train station when two men approached me from behind and told me to sit on the steps. One of them sat next to me while the other one stood in front of us. They told me to open my purse. The one sitting next to me went through my things and grabbed my wallet and cell phone. He took the money and my ATM card out of the wallet and gave it back to me. After that they ran away with the money, card, and the phone. During the whole time they kept saying that they would hit me if I did not do what they were telling me.
Q2: Where were you when this happened?
A: This happened at the Ashland green line stop.
Q3: What did you do afterward? (contact CTA staff, police, etc)
A: After they ran away I went upstairs to the station and told the security person. She then called the police and a “CTA security supervisor.” Both the police and the security supervisor asked me to recount what had happened. The police offered me to drive me home but at that point I had already called my husband to pick me up.
Q4: What could the CTA have done to prevent this sort of situation or help make it safer?
A: The police asked me a few times to describe the men. It happened in the winter so it was dark at 4pm. In addition I was so scared that I could not really look at them. I wish CTA had cameras at the stations. Maybe the police would have caught these men if they were able to identify them from a video.
Q5: Was there security involved? (camera footage, CTA staff to help, emergency buttons, etc)
A: There was a security person inside the station but she did not see anything. I think that at the time when it happened, they did not have cameras at that station. Later, I found out that they were installing security cameras.
Q6: How has this affected the way you view the CTA or the way you travel on it now?
A: The first months after the incident I was scared to take the train. Now I am a lot more cautious and I pay more attention to my surroundings and people on the CTA.
Q7: What do you use the CTA for? (shopping, school, work, etc)
A: I use CTA a lot, actually. I [ride the CTA for] school, shopping, work, and entertainment. I would say I am on the CTA at least 4 to 5 days a week.
Q8: What are safety tips that you would give someone taking the CTA trains or buses?
A: Definitively be aware of your surroundings. Always look back before going up or down the stairs at certain train stations.
[Image credit: http://www.chicagobreakingnews.com]
According to a recent Chicago Tribune article, there were 581 reported CTA robberies in 2010 and 294 robberies from the time period of January through May of this year, resulting in a 23 percent increase. This information was received from the Chicago Police Department and includes reported crimes located in CTA parking garages and lots, trains, buses, and platforms. Many people attribute these rising crime rates to the popularity and demand of smartphones. According to officials, the act of stealing smartphones from people waiting for trains and buses is typically referred to as “Apple-picking.”
When asked about the increase in robberies on CTA premises, CTA president Forrest Claypool responded, “This is the reason the Chicago Police Department is deploying more undercover officers, a visible wolfpack deterrent that can move between trains, and why the CTA is speeding up the installation of security cameras. We are trying to be agile and effective in responding to criminal activity and hooliganism, and making sure our riders can feel safe and secure on our system.”
One of the CTA concerns that has improved tremendously throughout the years has been safety and security, and although crime is still high, the city and CTA officials are actively working to provide safer transit. Securing the safety of passengers is a goal that the CTA has tried to accomplish through various means, such as installing security cameras in buses and train platforms, assigning more policemen to patrol platforms and transportation. Some other attempts at covering safety issues are posting a security tips brochure on their website and placing emergency instructions in each train car.
The Chicago Transit Authority’s YouTube Channel continues to update their channel with video postings on current efforts to build a safer travel environment, such as this video on safety tips and evacuation procedures. But how effective can a security tips brochure, emergency instructions and safety buttons be in ensuring a safe, hassle-free ride for CTA customers?
Our guess is not so much. But there is hope.
The following YouTube video explains how the Chicago mayor and CTA officials plan to improve safety conditions on CTA property through various means such as an increase in high-tech security cameras as well as more patrol by police officers:
Mayor Rahm Emmanuel and CTA President Forrest Claypool have looked into the CTA safety problems and implemented a new plan to install double the amount of current cameras on CTA premises by the end of 2011. The new cameras that have been installed since June of this year have aided in capturing 13 criminals thus far.
According to an article from ABC’s local news website, the city is spending a reported $15 million to install an additional 1,500 cameras, totaling 3,000 cameras across Chicago. One controversy that has sparked out of CTA’s technology budget has been the implications on CTA customers in regard to increasing fare hikes and cuts in bus and train services. Mayor Emmanuel responded to the controversy by replying, “We have some choices to make. And they’ll lay out their budget, but it’s clear that we’re investing and making sure that the dollars do not sit in the bureaucracy — they go right to the platform, right to the bus shelter.”
Although the security of passengers remains a significant concern regarding the CTA, improvements and future goals are actively being pursued within the realm of CTA safety. Until then, it is up to Claypool and other CTA officials to decide how to pursue these goals within the company’s budget.
We’d like to ask our readers: What do you think about the new spending plans on high-tech security cameras on CTA premises? Will this benefit consumers in the end, or will there be larger implications?
By Diana Park
By Gia Donofrio
Even CTA consumers that are uninterested, unhappy, or just plain unaware of the CTA’s recent management fiasco and budget crisis have found it difficult to ignore the inconveniences created by route cuts. Since of February 6 2010, the bus service has been reduced to 1/5 of its original size. In addition, train operations have also been reduced 9% since the CTA made its route cuts to reduce the budget deficit. Consequently, these decisions have left about 1100 CTA employees out of work and many more CTA consumers unhappy about their longer commutes. Many public transportation commuting Chicagoans are still expressing their discontent through blogs, YouTube Videos, and some opinions have even made it to the pages of many newspaper articles of papers like the Chicago Tribune. In consequence, I will share with you a few details about the infamous CTA route cuts that I have come across.
First, one of the biggest hits to the bus route system was the closing of the 103-year-old Archer Garage located at 2600 W Pershing Rd, which once operated 22 bus routes on its own. On the upside, all of its bus routes did not just cease to exist, but have been distributed among the other seven remaining garages within Chicago. Also, bus operators and maintenance personnel who had worked at the Archer Garage still hold jobs within the CTA in its other garages. The only Archer Garage bus route that was eliminated as a whole was the X49 Western Express. However, as a whole there were nine express bus routes cut from the system. As a sad reminder for many commuters, the Archer Garage now sits as a storing space for old out –of- service bus batteries and their drained fluids.
Furthermore, the closing of the Archer Garage has brought other conversations such as environmental concerns and local economy to the table. Folks residing within the garage’s neighboring area feared that the garage would have environmental effects on the community. This is a reasonable fear since the garage currently has six tanks filled with either diesel fuel or lube oil underground and has already had an oil spill incident that left oil residue stuck in the soil. However, the Illinois Environmental Protections Agency (IEPA) has been working with the garage to monitor leaks and contaminations.
According to a project manager working with IEPA, soil contaminated with oil should not affect the community’s drinking supply because they should be receiving their water from the public water supply that is not affected by the local soil. In addition, local businesses are not particularly happy either since the Archer Garage bus routes brought much revenue, but will now reduce local business costumers considerably.
Additionally, train lines have faced cuts as well. In fact, all the train lines except for the yellow line have been reduced. Consequently, waiting for train rides has increased significantly and have made the commute much more crowded than before. Many CTA riders are avidly complaining that their commutes have increased up to a half an hour or more. Other riders are completely annoyed by the crowdedness of their train rides, in which they not only have to stand, but must also get out of the train to let fellow passengers out. However, there are other CTA riders who do not feel that it has been as significant of a problem that some are making it out to be. The more optimistic passengers are simply relying on bus tracking systems to make their commutes a little more reliable.
CTA route cut problems do not end with long, crowded, and nonexistent routes, but have also brought about discussion on the inequality of such cuts. The YouTube video above entitled “Rev. Jesse Jackson calls for end to inequality in CTA bus routes” illustrates some of the issues that have risen out of the CTA bus route cuts. CTA riders are speaking up against CTA decisions to cut routes important to certain communities and are claiming that it is due to the favoring of certain neighborhoods over others. Evidence that the south side of Chicago is being left out in the cold comes from buses like the Dan Ryan terminal from the south side, which makes about two or three roundtrips and for the rest of the day turns into and stays as a 151-bus route for the north side.
Rev. Jesse Jackson along with the Rainbow coalition is backing union leaders in asking that the CTA redistribute bus routes equally. With all the arising bus route issues, CTA President Richard Rodriguez has much to consider.
By Yaxal Sobrevilla
The recession that hit the U.S. nationwide had a large effect on the Chicago Transit Authority as well as their ridership. Due to loss of revenue and ridership, the CTA was forced to drastically change their budget and make major budget cuts. Most of this transit system’s revenue comes from sales taxes, which has been much lower than usual since the recession began.
The CTA is trying to do whatever they can do to protect their revenue sources, but unfortunately, this affects their operating costs. Just as everyone else must do in an economic downturn, spending must be carefully watched and saving becomes highly important. With high unemployment percentages, ridership also decreased during rush hours since not as many people are using the CTA to commute to work. Currently, they are trying to figure out how to increase their ridership. They would like to not rely on mainly people commuting to their job. Any type of rider would be accepted.
In 2010, the CTA budget deficit hit $300 million. The following year, in 2011, the budget deficit came down to $95.6 million. This year, the budget deficit is estimated to be somewhere in between the past couple of years’ deficits at $277 million. In essence, the deficit will stop being such a big issue once ridership increases along with all stakeholder issues. Hopefully, one day the CTA will achieve this.
Since 90% of the CTA’s workforce is unionized, coming to an agreement between everyone becomes difficult. Being highly unionized also costs the CTA a lot. This causes them to be careful in talks with the union about the budget. The union always wants more money, while the CTA is trying to cover costs wherever they can. Again, they have to find a way to compromise with their union and make everybody happy.
In effect, customers of the CTA have become angry with how the CTA is handling their economical issues. Layoffs, route cuts, and fare hikes affected ridership. Chicago transit users have complained about route cuts and fare hikes the most. In order to cope with this, the CTA is trying to communicate better, in general, with their users. They want riders to be the most aware of what will be going on as soon as something goes into effect. Their customers are on the forefront and necessary for the survival of this transit system.
By Priscilla Martinez
CTA financial crisis arises due to the open promises made in their pension plan
Ameya Pawar argues that elected officials have not done their job in funding the CTA pension plan throughout time. These promised benefits were brought out by the government; therefore it would be unreasonable to blame the retirees and union members for the evolving Chicago Public Transit problems.
The first problem stems on what actions the city of Chicago should take in order to regain ground. Pawar explains how money is being distributed ineffectively, while half of the property tax payer’s money goes toward service debt and service pensions. Obviously, the money is scarce and Pawar argues that in order to free up some money, the service must be sustainable and efficient. By improving the system, it will allow money to go toward the pension. It is unethical to increase fares on a system that clearly doesn’t work anymore. The main priority should be getting labor and union workers on board through an improved system, while avoiding the taking away of benefits from individuals who have bought into the plan. This is a government problem, so therefore why are the residents of Chicago being penalized with increased fares and union workers with cut benefits?
According to the CTA Retiree Health Care Trust (RCHT), as of 2006, the CTA Retirement Plan was only 30% funded at this time. This suggests that retirees were only receiving 30% of coverage on expenses toward health care and pension payments. Through time, the CTA retiree health care plan was seen as extremely generous when compared to other public or private employers. Holding many uncommon characteristics of formerly known pensions, the CTA offered plans that were free for retirees that included a fixed premium rate for dependent coverage regardless of the number of dependents being covered in the first place. Increased health care costs caused the retirement plan to plummet, providing an even larger portion of funding for future health care costs. Changes were needed to make the design more practical.
The Illinois legislative approached the problem by passing two laws in 2006 and 2008. The first public act called for the CTA to separate the funding for retiree health care benefits from the funding for pension payments. The second public act passed in 2008 modified section 22-1018 of the Illinois Pension Code, as well as section 3-2.3 of the Illinois State Auditing Act. Some of the changes are as follows:
- The CTA Retiree Health Care Trust (RHCT) must be independent in providing health care benefits to retirees, their dependents and survivors. Also, the Trust must be run by a board including three union representatives picked by the CTA. The RHCT is expected to assume responsibility after January of 2009.
- To be eligible for a retiree health care coverage, the CTA employee must be 55 years of age and have at least ten years of service before that individual can decide to retire.
- Once the RHCT declares financial responsibility for retiree health care after July of 2009, then the program can not offer any plan that includes co-insurance levels higher than 90% coverage for in-network services and 70% for out-of-network services.
- The retiree health care benefit program must be reviewed annually to determine if there are sufficient funds to cover future responsibilities. If the current funds happen to be insufficient, then contribution increases (increased premiums) and benefits decrease (reduced coverage) to help balance the shortage within a ten year span.
- The total contributions received from participants, including all retirees, dependents and survivors, cannot exceed 45% of RHCT expenses in the prior plan year.
- Active employees will be required to contribute at least 3% of their salary to the RHCT after January of 2008.
The CTA retiree health care trust plan was established in May of 2008 and was first funded with about $529 million dollars from CTA’s pension obligation bonds. It also receives money from the following:
1. Retiree/ dependent/ survivor premium contributions: As of July 2009, the RHCT began collecting premium contributions from retirees for their coverage, while before the retirees’ only use to pay the premiums for their dependents.
2. Payroll deductions from active CTA employees: By January of 2008, all active CTA employees had a 3% cut to their gross salary.
3. Investment Returns. The trust fund balance will be invested and the income from those investments, including all of the net losses and expenses, will be returned to the fund.
The CTA RHCT was said to take full responsibility for the funding, payment and administration of health care benefits for the CTA retirees, dependents and survivors as of July 2009. While they say they are committed to offering their expertise for the best benefits for their employees, CTA still suffers problems in the present year of 2011.
By: Gia Donofrio