DETAILS MATTER by Bob Ginsburg August 31, 2020
What the Budget Crisis Should Mean for Public Transit Beyond Cleaner/Sanitized Buses and Trains. Also First Look at Chicago Budget
Welcome to Details Matter a Newsletter about urban development, public finance, Transportation, and politics in Chicago and Illinois. You can subscribe/unsubscribe at (https://robertginsburg.substack.com/welcome). Get previous issues which mostly focus on dealing with the fiscal crisis at (https://robertginsburg.substack.com/archive). PLEASE FORWARD if interested.
What the Budget Crisis Should Mean for Public Transit Beyond Cleaner/Sanitized Buses and Trains. Also First Look at Chicago Budget.
The Transit funding issue is a more complicated question than it appears. We have recently begun to see a flurry of advertising and Public Announcements about how clean CTA, Metra and Pace buses and trains will be and how much effort transit agencies are putting into cleaning trains and buses to make them low risk travel options. This is absolutely necessary given the continuing out-of-control pandemic. However, it is not sufficient if the goal is to create a viable post-pandemic regional transit system. Cleaning needs to be done but is is mostly an attraction for discretionary wealthier, mostly white riders that travel downtown and that also have had the option of working from home during the pandemic. Many of their workplaces are closed. They were discretionary riders before and they are even more discretionary now. There are many more factors than cleaner trains that will get those riders back on public transit.
The future of public transit depends on getting dramatically more riders on public transit, bicycles, scooters and out of cars. Analyses from Crain’s and CMAP and Active Transportation Alliance show that low income riders and people of color have continued to use public transit during the pandemic at much higher rates than discretionary riders (e.g. wealthier, white, professional, office workers.) This “other” class of riders will still risk their lives and health riding public transit because they have to. They will also abandon public transit when they can because public transit does not really meet their needs, is not marketed to them and is too infrequent, too unreliable and too sparse to rely on continually. A recent study by the Metropolitan Planning Council and UIC talked to riders from low income communities and communities of color and documented those complaints especially about unreliable and infrequent service (MPC Challenges report). Their studies also supported concerns about “transit deserts” (deserts) on the south, southwest and west sides.
The Transportation Research Board studies have also documented the problems. People of Color and immigrants account for 60% of transit ridership nationwide. Hispanics are the fastest growing group of transit ridership. CTA and Pace need more ridership. We forget that CTA’s peak ridership was in 1980 before deindustrialization really took a bite out of City of Chicago workplaces. The CTA, Pace and Metra need to articulate a strategy and plan for growing ridership to spur economic growth not in response to gentrification.
CTA needs to develop a real strategy to attract both discretionary riders AND riders that need to use public transit. Nobody will strongly support new revenues and new initiatives unless they understand how it will help them. They need to see proposals and plans that reflect either a strategy or a fundamental change in their communities. They also need to see clear, measurable goals and not just trophy projects. Trophy projects are useful but not a promise of future changes. They are just the illusion of future changes they hope will come.
Last month I proposed performance measures for transit and housing for Invest South/West which would represent real and specific changes and improvements in public transit to go along with cleaning and sanitizing. It would represent a measurable commitment to those communities. These cannot be delivered immediately but they represent a yardstick for any temporary or interim proposals to address the budget crises we find ourselves in now.
1. Public Transit: reducing commute times, addressing transit deserts, and increasing frequency and reliability of buses and trains should be a priority.
a. Change in number of jobs available within 45 minute commute on public transit
b. Decrease in travel times to jobs
c. Increase in frequency/reliability of bus and train service to job centers
2. Affordable Housing: Investment in affordable housing would keep people in neighborhoods and attract new residents.
a. Projects announced/# of Affordable units proposed
b. Projects funded and/or approved
c. Projects linked to transit stations or locations where 3 bus routes intersect
d. Funding approved (total amount and # of houses) for mortgages, energy efficiency/repairs
First Look at FY2021 Chicago Budget
On Monday evening we got a first official discussion of the FY20 and FY21 post-pandemic Chicago Budgets. The starting point is an $800Million deficit for the current budget (up from $700M) and $1.2Billion for the FY21 budget that must be passed by December. The $2Billion total is a big number. There are also many more questions about the budget including how they arrived at the deficits and how that affects options for closing the gap. After the first Live Stream Town Hall, several immediate question areas come to mind:
1. What was the 2020 revenue shortfall and in which taxes and fees? For example how did general sales taxes fare compared to restaurants, hotels and transportation? How did the increase in internet sales affect the totals? What was the deficit for O’Hare and Midway? What does the rating caution on McCormick Place bonds mean for the City and State?
2. What were the increased costs for the Pandemic, as well as additional Police and other City costs from protests and storms that were covered directly by the CARES Act?
3. The City stated that they lowered the FY2020 deficit by “leveraging” $350Million in CARES Act relief funds but gave no details of what extra expenses were covered and what regular service costs were covered by “leveraging” the CARES Act relief funds.
4. $200Million from refinancing City debt was supposedly applied to the new deficit. It is not clear if this was additional funds from refinancing or just a restatement of the refinancing funds included in the original budget.
5. The City also stated that there will be a substantial TIF surplus needed but no idea of their estimate of how much is or could be available and what projects would have to be postponed. What review process is going on? What projects could be postponed and what is the public process for evaluating?
6. There were no specifics on changes in FY2020 staffing levels though actual 2020 t staffing levels appear to be 10% below budgeted. The questions at the Budget hearings this week should be on what are essential programs and services that need to be maintained in order to prioritize any potential staff reductions?
7. The City also talked about increasing the tax on computer leases but no other business taxes or fees. Increased fees and funds from the Electric and Cable franchise agreements should still be on the table as are increased fees in the downtown Special Service Area. Some of those options were briefly discussed in my August 3 newsletter. (robertginsburg.substack.com/archives.)
8. There was no discussion of what expenses and revenues were projected for FY21. Previous models projected revenue levels would not return to 2019 actual receipts (as opposed to Fy2020 estimates) until late 2020 which means that we will not reach 2020 budget totals until 2022 without new revenues.
There will be no easy answers for these budgets and any answer depends on whose ox you want to gore. Direct revenue options for the City and County are limited and any Federal and State help is uncertain.