November 17, 2014
The Civic Federation supports the Chicago Transit Authority’s (CTA) proposed FY2015 budget of nearly $1.4 billion. The budget represents an improved level of fiscal stability made possible by the CTA’s efforts in past years to secure its pension fund and modernize its labor practices. The agency is working under a more sustainable labor agreement, no longer relies heavily on one-time revenue sources and has balanced its budget for the past three years without increasing base fare rates.
While acknowledging the progress the CTA’s pension fund has made since it was close to insolvency in 2006, the Civic Federation retains some concerns about the fund’s overly optimistic expected investment rate of return of 8.25% and its 50-year plan to get to 90% funded, which is less than ideal from an actuarial perspective. The Civic Federation also warns that the CTA may be relying too heavily on funding from the State of Illinois in FY2015 without fully accounting for the State’s continued fiscal deterioration.
The CTA’s fiscal year begins January 1, 2015 and ends December 31, 2015.