The Corn Latitudes

How Mass Transit

Can Serve the Masses

Chicago thinks new thoughts about the CTA

Chicago Enterprise

January 1992

Chicago relies utterly on its public transit system, about which Chicagoans talk the way Illinoisans outside the city talk about the weather. I used public transit and liked to write about it. Ideas to make it better were not wanting, as I report here, even if money and political support was. By the way, the system suffers today from being too popular.

 

Another of my contributions to CE’s Politics & Policy page, which was one of the best places to be seen in Chicago. One of my colleagues at CE told the Reader that it was nice to know that whatever he might say in Chicago Enterprise would cross the mayor's desk.

 

The CTA—so often vilified, crucified, and even criticized (to borrow from the first Mayor Daley)—will soon be accused of wanting to take everyone in Illinois for a ride. CTA Board Chairman Clark Burrus plans to go to the General Assembly come spring to revamp the agency's state subsidy formula in a way that would more than triple the potential operating subsidy the CTA could get from the RTA.

 

Alas, the CTA is not admired in Springfield. Earlier this year, Gov. Jim Edgar, in a fit of pique over CTA executive pay raises he regarded as larcenous, vetoed $6.5 million worth of subsidies for reduced fares for old people, students and disabled riders. Presumably, the CTA learned its lesson; from now on the agency will know better than to raise anybody's pay until after the governor signs the budget.

 

Edgar is hardly alone in his complaint that the agency faces not a revenue problem but a cost problem. RTA Chairman Gayle Franzen insists that the CTA needs to lay off more employees and cut more services as well as raise more revenue from fares and subsidies. Franzen's diagnosis is accurate enough—a recent independent study concluded that the system spends 41 percent more real dollars now than it did in 1965 while carrying 16 percent fewer riders—but his prescribed cure would kill the patient.

 

Before we can ask fruitful questions about how best to pay for the CTA, we need to ask what kind of system we want. Is public transit a service of general community benefit, like police or sewers, or a business that should (in terms of operating costs at least) be self-supporting?

 

During an October public meeting at Northeastern Illinois University, Chicago Aid. Bernard Stone (50th) opted for the former when he proposed making CTA rides free. This is not a loony idea even if it did come from an alderman. A no-fare system would mean sizable operating economies for the CTA, eliminate the need to subsidize poor riders and expand the CTA's appeal to a dwindling off-peak ridership. Ridership could easily double.

 

Lower costs wouldn't compensate for all the lost farebox revenues, so Stone suggested what he called a "small, insignificant" local income tax to fill the revenue gap. Another possibility is a "congestion fee" charged expressway motorists to discourage unnecessary car commuting; expressways account for only five percent of the area's road capacity but generate an estimated 90 percent of the congestion. And property levies (perhaps administered through special service districts) could capture some of the value that rail transit access adds to real estate at both ends of the tracks.

 

Unfortunately, eliminating fares also eliminates any need for the agency to earn them by providing fast, clean, safe service; recent experience suggests that if the CTA ran a free service, it would be worth what the riders paid for it. At the same time, it is hard to imagine the present system ever being self-supporting. If current operating subsidies are removed, fares would have to be doubled at least, or costs cut a like amount.

 

Such a change would make the system either unaffordable or (in the latter case) useless—if one assumes, as everyone seems to, that the only way to cut costs is to cut service. Another way to cut costs is to improve efficiency. For critics who think anything the CTA does reeks of waste, the only alternative is to require that the system contract out certain of its operations to someone else, presumably lower-cost private firms.

 

True, Chicago's electricity is supplied by a private-sector company under a franchise agreement. And true, the city used to have a private transit system that was such a disaster that its replacement by even a CTA was considered an improvement. But the old system didn't prove that private transit can't work, only that private transit can't work by itself, or when it's hamstrung by franchise agreements whose premise is that the way to make a system affordable is to let everyone ride for less than it costs to provide the service.

 

The CTA board to this day sees the agency not as a business but as an entitlement program. It will never cut costs willingly or well because it has no motive to do so as long as the system is structured as it is; the subsidies that keep fares low also keep costs high, to the extent that they spare the agency the improving discipline of Price.

 

The larger problem is that mass transit is a monopoly and public monopolies are no more naturally efficient than private ones, except when it comes to extracting subsidies from lawmakers. The results have not gone unnoticed. The first decision made by boosters of the proposed downtown circulator was not where it would run but who would run it. (Or rather, who wouldn't run it.) A Special Service Area ordinance passed in February gave the authority over design, construction and operation of the project to a new governance board of four public-sector members appointed by the mayor (probably the heads of relevant City Hall agencies) and four private-sector members, with representatives of the CTA and RTA sitting as non-voting members.

 

Such a board could hire a contractor to build the circulator under terms of a turnkey contract, or set up a public-private entity to oversee construction. Both have been used locally, with reasonable success, to build the Southwest Line and the people-mover at O'Hare. What is true of the construction phase also could be true for day-to-day operations; the CTA already jobs out its handicapped ride services and some PACE routes are served by private contractors.

 

Privatization of the larger system needn't mean abandonment of public interest policies. For example, transit could be kept affordable for poor people in the face of market-level fares by-changing the form of public subsidy. Peter Gordon, an urban planning professor at the University of Southern California, would convert mass transit operating subsidies to vouchers to be given to low-income riders; one; likely result would be the creation of demand-driven transit systems in the form of small van and jitney systems.

 

Such miracles will require new ideas even more than new money. At this point in the discussion, every Chicagoan who's been here long enough to learn how to mispronounce "Goethe Street" shrugs his or her shoulders and says, "It'll never happen." The CTA can too easily be manipulated for political gain. The unions won't stand for reform, reason our cynics, and any peace-loving mayor would rather see mass transit fall apart than shut down. For its part, the CTA board will simply ignore mandates from the state, using a threat of a transit shutdown to blackmail any governor or legislative coalition intent on reform.

 

Of course, fundamental reform is impossible if tire mayor, the RTA board, the governor and state lawmakers shrink from demanding it. They do so partly from lack of imagination and partly out of fear that they will be accused of pleading for a special interest. Public transit no longer has much of a public. Today, Chicago's system carries only about 3 percent of the trips made in the city each day. Its share of the commuting market is higher but that only reflects the CTA's loss of the discretionary rider. Many CTA users are poor, which is why Chicago mass transit has come to be lumped with welfare and public housing and public schools by the larger population.

 

In fact, mass transit's constituency is quite broad, although most of its members need to be educated as to the benefits it provides. Grain's Chicago Business, for instance, recently felt obliged to remind its readers that the Chicago business community "depends on mass transit to deliver a substantial segment of its workforce."

 

The Delaware Valley Regional Planning Commission asked the Urban Land Institute (ULI) to study the economic impact of further deterioration of Philadelphia's mass transit system. Predictably, ULI's wizards found that the net effect of service cutbacks would be to make that city less competitive as a place to do business.

 

Concluded the ULI: "The cost of shutting down or reducing [mass transit] services would far outweigh any savings for state residents that might accrue from their being spared the initial increase in fares and/or taxes required to repair the services." As noted, many property-owners are among the non-riders who benefit from mass transit. So are people and firms that use motor vehicles. In Philly, for instance, the ULI concluded that half the excess costs of service cutbacks would be paid by truck and car users in the form of more accidents and time-wasting congestion.

 

The problem is how to improve the CTA—not, as some officials seem to think—how to destroy it most efficiently. The city ought to be expanding rather than scaling back mass transit, especially toward the suburbs. New clean air rules and the mounting costs of auto congestion are only two reasons for this kind of renewed commitment to public rather than private transit. Philadelphians are now spending upwards of $100 million a year for rehab of their aging system, but the ULI concludes they could spend up to $450 million and still make money on the deal. To achieve such results in Illinois will require that someone risk the investment of badly needed capital—political capital. ●

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