Recession Effects on CTA

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

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2 Comments

Filed under Budget, Budget Problem, Finances

2 responses to “Recession Effects on CTA

  1. Maybe their new twitter accounts will help them communicate better with their customers.
    -Yaxal

  2. Priscilla

    Yes I believe that that was their plan!

    CTA is in the process of taking an ever bigger step towards listening to their customers. There are talks of them implementing a system that allows for credit or debit cards to pay for rides on trains and buses. If this works, Chicago transit systems may utilize this idea to have a universal ride card for CTA, Metra, and Pace! How cool would that be??

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