Layoffs & Service Cuts: Are They REALLY Necessary?

[wordguy]

The title I've given this thread may sound a little flip, but I can't help wondering if everything humanly possible is being done to avoid the 2/7 "apocalypse".

I'm a firm believer in unions and am a one-time member of ATU Local 241 (1969-75). But still, I get the sense that representatives of both the ATU and the CTA are continuing to talk AT each other instead of TO each other. It's good to know that they're planning to meet this Wednesday, but I'm concerned about what seems to be a lack of flexibility from either side.

Anyway, for whatever it's worth, here's my $0.02:

For starters, I realize that it's asking a lot from the union to accept further concessions, especially in light of those already granted. But the alternative is the loss of livelihoods for nearly 1,100 union members, obviously a much greater hardship than deferred raises for those who keep their jobs. In the long run, losing so many rank-and-file members will also weaken the union.

The union leaders have stated that they believe that the CTA hasn't cut enough of its administrative flab. I'm not in a position to judge one way or another. But assuming that management is being truthful, they should be willing to document the cuts they've made, as well as allow union representatives access to their detailed budget.

Other possible talking points:

1) The CTA has a dedicated revenue stream, one that's been affected by the struggling economy. Hopefully, the economy will begin to recover sooner

rather than later. Why not consider incremental restoration of the scheduled wage increases, etc. as revenue improves?

2) Considering what's at stake, revisiting the unrestricted free-rides-for-seniors issue might be worthwhile. According to the CTA, $95 million would

be saved by implementing the service cuts. The $30 million in lost revenue from the free rides wouldn't cover the entire amount, but still, $30 mil ain't

chump change!

3) Robert Kelly, the head of Local 308, indicated that he'd be interested in hearing about long-term plans on the CTA's agenda. First of all, if another

federal stimulus package materializes, maybe the CTA should apply for funding. Ideally, the purpose of additional stimuli, as various spokespeople

for the Obama administration have stated, is to create or PRESERVE jobs.

4) Secondly, the CTA, in concert with transit agencies throughout the country, the American Public Transit Association (APTA), and possibly the National

Conference of Mayors should consider a campaign to restore federal operating subsidies for mass transit. It seems to me that a partial cause

of the present crisis was the gradual phase-out of such subsidies as a result of legislation enacted during the Reagan years.

Any thoughts?

[Busjack]

1. You have put it much more rationally that I have seen otherwise, including the CTA Tattler and one "contributor" here.*

2. With regard to the dedicated revenue stream being affected by the economy, the real problem is that if the economy improves, the RTA appears (from various reports pieced together) to have to pay back [a] the bonds issued to stave off the fare increase, less the two years of bond service the state says it will cover, and apparently other bonds the RTA says it now needs because the state isn't paying it (nor apparently anyone else at the moment). Hence, even if the economy recovers, the RTA will not at the same pace.

3. Free Rides for Seniors should still be repealed, even though the claimed loss of revenue isn't as high, because it can't be assumed that demand would be as high once the riders have to pay. But, the $30 million is supposedly the same as the $30 million that would be saved if the 3.5% pay increase doesn't go into effect.

4. One can't count on a new federal stimulus if this one is claimed to have been wasted, but since it is claimed that all big transit agencies are having the same problems, your APTA suggestion seems to make sense. Probably, though, some corresponding "kicker" would be needed for states not dependent on transit.**

____________

*I sort of have the feeling that those purporting to be mechanics are plastering the web with the Robert Kelly line more than the drivers. However, this may just be an impression.

**Transit lost its operating subsidies in the 80s, basically because a majority of the Senate said there was no point in subsidizing Boston's 25 cent fare if the locals weren't willing to do it. However, if a "gas shortage" was then and now a real problem, one would think that cutting off transit subsidies was the worst way of dealing with it. Now, they come up with stuff like congestion pricing and the aborted BRT scheme here, which was tied to the parking meter lease, as well as increasing parking taxes, when the carrot might have worked better than the stick.

Of course, I have always said that the feds can print money, while the state can't, and maybe the money supply needs inflating now.

[rotjohns]

1. You have put it much more rationally that I have seen otherwise, including the CTA Tattler and one "contributor" here.*

2. With regard to the dedicated revenue stream being affected by the economy, the real problem is that if the economy improves, the RTA appears (from various reports pieced together) to have to pay back [a] the bonds issued to stave off the fare increase, less the two years of bond service the state says it will cover, and apparently other bonds the RTA says it now needs because the state isn't paying it (nor apparently anyone else at the moment). Hence, even if the economy recovers, the RTA will not at the same pace.

3. Free Rides for Seniors should still be repealed, even though the claimed loss of revenue isn't as high, because it can't be assumed that demand would be as high once the riders have to pay. But, the $30 million is supposedly the same as the $30 million that would be saved if the 3.5% pay increase doesn't go into effect.

4. One can't count on a new federal stimulus if this one is claimed to have been wasted, but since it is claimed that all big transit agencies are having the same problems, your APTA suggestion seems to make sense. Probably, though, some corresponding "kicker" would be needed for states not dependent on transit.**

____________

*I sort of have the feeling that those purporting to be mechanics are plastering the web with the Robert Kelly line more than the drivers. However, this may just be an impression.

**Transit lost its operating subsidies in the 80s, basically because a majority of the Senate said there was no point in subsidizing Boston's 25 cent fare if the locals weren't willing to do it. However, if a "gas shortage" was then and now a real problem, one would think that cutting off transit subsidies was the worst way of dealing with it. Now, they come up with stuff like congestion pricing and the aborted BRT scheme here, which was tied to the parking meter lease, as well as increasing parking taxes, when the carrot might have worked better than the stick.

Of course, I have always said that the feds can print money, while the state can't, and maybe the money supply needs inflating now.

In my opinion, neither of our last 2 governors have made the right decision. We all know about Rod's decision for free rides for seniors, but Quinn's decision to freeze fares for 2 years doesn't make sense to me either. So you'd rather cut service and make life harder for people to get somewhere and lose over 1000 workers? What I think they should do is raise individual one way fares and leave the passes alone (1-day, 3-day, etc) so you give people the opportunity to buy passes and save money. This is what Metra is doing and is what many other big city transit agencies are doing. Cutting service is more crippling than raising fares.

[sw4400]

[My 0.02 cents...(little rant here)

I've said it many times, and wordguy, Busjack, and rotjohns have all brung it up... free rides need to be eliminated!!! 30 mil can possibly, at the very least, keep the regular routes operating at their current start and end times(I'm not sure if it'll keep the "X" service). As far as Gov. Quinn... get used to that seat, pal. When the elections come around, I think we might be looking at a new Gov.(dare I even say a Republican?)

-Blagojevich lost his mind(nuts and bolts keep coming out every time he opens his mouth to the press)

-Quinn's* losing his credibility(Not eliminating Free Rides after saying he might, freezing rates for two years, not giving a *bleep* about the Transit System and it's urgent needs)

-Change might be needed in the Governor's Office yet again.

*BTW: Anyone remember the time Quinn rode the Green Line to work to show how safe Public Transit is?(I believe he replaced Gov. Rocks-In-His-Head by this point). How many think he had a Free Ride pass when he rode in?

[geneking7320]

In my opinion, neither of our last 2 governors have made the right decision. We all know about Rod's decision for free rides for seniors, but Quinn's decision to freeze fares for 2 years doesn't make sense to me either. So you'd rather cut service and make life harder for people to get somewhere and lose over 1000 workers? What I think they should do is raise individual one way fares and leave the passes alone (1-day, 3-day, etc) so you give people the opportunity to buy passes and save money. This is what Metra is doing and is what many other big city transit agencies are doing. Cutting service is more crippling than raising fares.

I hate paying taxes and also hate fare increases. I also know TANSTAAFL.

I prefer a fare increase to service cuts any day of the week.

[Busjack]

I was wondering why the cutback was being repeated on the TV and radio news this afternoon, but, as expected, the CTA put out a press release on this subject.

Perhaps foreshadowed by my comment about maybe they are taking artics off the LSD routes is the following:

Under current operation there are already numerous rail and bus routes that are at capacity during rush periods. When service is reduced on February 7, crowding on these routes will increase so, in addition to longer wait times, riders who travel on the agency's highest volume routes may have to wait for multiple buses or trains before boarding. The CTA is advising riders to allow for additional travel time.

It also has Rodriguez's take on the lack of give backs, FWIW.

I also know TANSTAAFL.

Of course I personally know that the guy who invented that phrase ate free dinners.

Also, as sw continually points out, TISTAAFR (there is such thing as a free ride), although apparently someone has to pay for it.

[wordguy]

The consequences of the service cuts could be severe on many levels (stating the obvious, I realize): Declining ridership, especially among riders who have other choices, increasing traffic congestion, unpleasant commutes, and more challenging working conditions for CTA employees who survive the layoffs --- especially bus operators. Over the long-term, Chicago could well become a less-livable city.

I'm wondering if anyone has thought about sounding out the rank-and-file union members on this issue. Would they agree to defer scheduled wage increases, etc., in order to save their coworkers' jobs and keep their own working conditions from deteriorating?* As I said in a previous post, I realize that it's asking a lot. But there's too much at stake to let these cuts go forward without making every humanly possible attempt to stop them.

*Assuming that CTA management has really done everything possible to cut administrative excesses.

[rotjohns]

The consequences of the service cuts could be severe on many levels (stating the obvious, I realize): Declining ridership, especially among riders who have other choices, increasing traffic congestion, unpleasant commutes, and more challenging working conditions for CTA employees who survive the layoffs --- especially bus operators. Over the long-term, Chicago could well become a less-livable city.

I'm wondering if anyone has thought about sounding out the rank-and-file union members on this issue. Would they agree to defer scheduled wage increases, etc., in order to save their coworkers' jobs and keep their own working conditions from deteriorating?* As I said in a previous post, I realize that it's asking a lot. But there's too much at stake to let these cuts go forward without making every humanly possible attempt to stop them.

*Assuming that CTA management has really done everything possible to cut administrative excesses.

It's unfortunate. Really really unfortunate. At this rate, I wouldn't be the least bit surprised that within the next 2-3 years, the CTA files for bankruptcy, something no one in this lifetime would've expected. The economy is not gonna get much better anytime soon so if year after year the CTA is having to cut service, raise fares, and do other things to stay afloat, it'll come to a point that riders will simply not ride at all. That may be good for car dealers as they'll see an increase in people buying cars, new or used, but as wordguy indicated, that'll increase congestion on roads that are not currently ready to handle the increase in car travel. I still believe there's too much fat up top and if the mayor was really on his toes, he'd be looking into that a lot more seriously than he is.

[New Flyer]

Whatever your opinion on the subject I suggest you turn out to the next union meeting on Monday Feb 1 at 8:00 pm at plumbers hall with your supporters and the press.

[jacksone44]

It's unfortunate. Really really unfortunate. At this rate, I wouldn't be the least bit surprised that within the next 2-3 years, the CTA files for bankruptcy, something no one in this lifetime would've expected. The economy is not gonna get much better anytime soon so if year after year the CTA is having to cut service, raise fares, and do other things to stay afloat, it'll come to a point that riders will simply not ride at all. That may be good for car dealers as they'll see an increase in people buying cars, new or used, but as wordguy indicated, that'll increase congestion on roads that are not currently ready to handle the increase in car travel. I still believe there's too much fat up top and if the mayor was really on his toes, he'd be looking into that a lot more seriously than he is.

I dont think the CTA can file for bankruptcy, but I understand your point your trying to make. Im curious to see what will happen next year when the situation will likely be the same or worse.

Looking at the big picture, the CTA needs to change the way it does business. Its constantly one thing after another between bloated management, funding, etc.

[Busjack]

At this rate, I wouldn't be the least bit surprised that within the next 2-3 years, the CTA files for bankruptcy, something no one in this lifetime would've expected.

I'm only slighly disagreeing with jacksone44. There is a bankruptcy chapter for municipal corporations. However, filing for bankruptcy wouldn't accomplish anything. The vested pensions are protected by the Illinois Constitution, so (despite what one very confused poster posted) the taxpayers would be stuck, anyway. Theoretically, a bankruptcy court could wipe out the bonds, but, then again, with regard to the pension bonds, the taxpayers would still be stuck. With regard to other bonds, that would be the last time the CTA borrowed or leased anything, and hence it gets no new equipment (5307 federal funds are already pledged to pay off 1630-2029).

The essence of bankruptcy is that there is something that could make money if the debts are restructured. That is why the automaker bankruptcies were conditioned on such things as getting rid of dealers who did not meet their quota. The Skyway was once in similar trouble, but based on quadrupling the tolls ordered in a federal court case brought by the bondholders and all the traffic to the Hammond Casino, made enough to get into a position to be leased to private investors.

Which gets us to the CTA. The only way to get the Rapid Transit and Surface Lines companies out of bankruptcy was for the government (i.e. the CTA) to buy them out. While the Rapid Transit probably was way under water, my research into the underlying companies of the Surface Lines was that they had 20 year franchises and 20 year bonds, and when the 1907 series came due around 1927, they defaulted and went into receivership. However, even through the Depression and WWII, they paid all salaries (although Lind indicated that there was some job sharing, something the union refuses to do today), had a retirement plan, had an equipment reserve, and paid property taxes. CTA certainly does not have the last two.

[Busjack]

Clout Street essentially says Mayor Daley says "yes."

[rotjohns]

Clout Street essentially says Mayor Daley says "yes."

So Daley would rather cut service than raise fares? People can't afford an additional 25-50 cents more. Whoever runs with him in 2011 better use this as motivation.

***UPDATE**** Obviously I meant whoever runs against him.

[wordguy]

Clout Street essentially says Mayor Daley says "yes."

What is the mayor thinking? Didn't the majority of unionized city workers agree to concessions in order to avert layoffs?

The reason that public outcry has been muted is that no routes are being eliminated. If the service cuts occur, I wouldn't be surprised if there IS a massive public outcry in reaction to a few days of harrowing commutes.

Yes, I'm sure most everyone realizes that Illinois is in dire financial straits, as are many other states as well as transit systems. This is exactly why we need restoration of federal operating subsidies for mass transit.

[New Flyer]

Why should the mayor care he rides around in a Limo all day

[jajuan]

So Daley would rather cut service than raise fares? People can't afford an additional 25-50 cents more. Whoever runs with him in 2011 better use this as motivation.

The fare increase route was a bit more complicated than some are portraying here. That's not the only part of the fare structure that was increasing so let's not sit here and oversimplify it. Not everyone pays a cash fare because it's not monetarily efficient for them to do so. 7 day passes were in the works to approach $30, monthly passes were to hit $110, along with the other passes increasing on top of the extra 25-50 that's being belly ached should be affordable. Just on the extra 25-50 cents alone, say your commute only involves one fare round trip in a workweek. It still adds up and it comes to an extra $130-$260 for a year. That's not small change to those working minimum wage or part time while trying to support a family because the jobs that give a bit more financial stability are not there anymore and they have to take what they can get. And let's not conveniently forget that these fare increases were IN ADDITION to the cuts that are still set to happen. That's not something you want to ask people to do in a recession when people are already nervous about their wallets and pocketbooks because their worried about holding on to their jobs to even make that extra 25-50 cents. Think about it, folks already see the government hitting them on numerous fronts with the RTA increase in the sales tax, in Cook County Todd Stroger's arrogant gall of a sales tax increase with no reform in county waste right after that earmarked for transit, the Chicago real estate tax increase that's directed at transit, and Gov. Quinn's proposed income tax increase without getting into pros and cons in his unenviable task of trying to dive into the state's financial mess. All this with the economy tanking, so how well do you think a fare increase goes with people no matter how small you think it is. Add that to the proposed cuts that's still on the table along with the fact that CTA raised fares not too long ago already, and I think the politicians calculated that they'd rather face a crowd that get the cuts such as they are, than go into an election season telling that same crowd they were giving them another more obvious hit in the pocket, real or just proposed, in a recession.

[Busjack]

What is the mayor thinking? Didn't the majority of unionized city workers agree to concessions in order to avert layoffs?

Yep, but the CTA union workers didn't and he can't make them.

Basically in response to jajuan: I understand how people won't like paying higher fares, but to accomplish that, the state engaged in a shell game, and basically didn't say how the RTA was going to be paying it back. If nothing else, the service cuts last a long time, because the RTA will have to pay off the bonds if and when the economy improves.

I'm still convinced that while it is confirmed that the current service cuts are not going to be averted, they will be fodder for increasing the taxes jajuan mentioned.

[jajuan]

Yep, but the CTA union workers didn't and he can't make them.

Basically in response to jajuan: I understand how people won't like paying higher fares, but to accomplish that, the state engaged in a shell game, and basically didn't say how the RTA was going to be paying it back. If nothing else, the service cuts last a long time, because the RTA will have to pay off the bonds if and when the economy improves.

I'm still convinced that while it is confirmed that the current service cuts are not going to be averted, they will be fodder for increasing the taxes jajuan mentioned.

Which is why I said obvious hit in the pocket because of course there are hidden costs that the average person doesn't immediately see especially when his eye is on the costs he can see upfront that are already on his plate.

[cta_44499_FG]

Clout Street essentially says Mayor Daley says "yes."

So let us all guess....whatever happened to Daley's Olympics pot o' gold. He won't be joining the people waiting 20-30 minutes in the cold, so there's "nothing he can do".

[jacksone44]

What is the mayor thinking? Didn't the majority of unionized city workers agree to concessions in order to avert layoffs?

The reason that public outcry has been muted is that no routes are being eliminated. If the service cuts occur, I wouldn't be surprised if there IS a massive public outcry in reaction to a few days of harrowing commutes.

Yes, I'm sure most everyone realizes that Illinois is in dire financial straits, as are many other states as well as transit systems. This is exactly why we need restoration of federal operating subsidies for mass transit.

Given the recent announcement that Obama is freezing federal budgets starting next year, federal subsidies seem pretty bleak.

Out of curiousity, how did the distribution of the federal operating subsidies work in the past?

[Busjack]

Out of curiousity, how did the distribution of the federal operating subsidies work in the past?

Originally, there was a half local match. Thus, one assumed that after the RTA taxes were imposed about 1974, the feds would match them. However, at least as far as CTA was concerned, there must have been a ceiling on the subsidy, as there were still fare hikes in that era, i.e. I remember the base fare went pretty quickly from 25 cents to 45 cents. According to Krambles, it stayed at 45 cents until 1976, jumped to 60 cents in 1976, and skyrocketed when the RTA crisis hit. Also, before this period, transfer charges were instituted, starting at a nickle, but were a dime by the 70s. This was, of course, a time of rampant inflation.

In that most places were organizing RTAs at the time, there must have been that stick to the carrot, but I cannot vouch for that.

[RailBus63]

In response to the thread title – yes, unfortunately, the cuts really are necessary. Governments at all levels are in serious financial trouble and the situation is not likely to improve any time soon. I believe it is preferable for transit agencies such as the CTA to bite the bullet now and start living within their means than to resort to financial gimmicks to delay the cuts until a later date. The sooner that all parties come to grips with the economic realities and start working together, the better off we’ll all be.

[Busjack]

...I believe it is preferable for transit agencies such as the CTA to bite the bullet now and start living within their means than to resort to financial gimmicks to delay the cuts until a later date. The sooner that all parties come to grips with the economic realities and start working together, the better off we'll all be.

Well, except that is only happening in part. The borrowing for the fare freeze is a financial gimmick. As far as all parties coming to grips and working together, well the news of the past few days indicates that none of them is.

I took the title of the thread in the spirit that wordguy indicated in his first post--if both sides negotiated in good faith, there could be some job sharing or other means of averting the degree of service cuts. However, given the statement in the State of the Union that federal discretionary expenses will be frozen starting in FY2011, I now modify my position, in that I don't see new federal operating subsidies as now being viable, that not being mentioned as part of the "jobs bill."

Given that, I do think that these cuts are inevitable, and not the political stunt the threatened 2007 ones were, but don't get to that conclusion from the same direction you do.

[New Flyer]

According to newsradio 78 this morning 241 agreed to 91 million dollars in give backs to the CTA and they were turned down. President Jefferson is now asking the Mayor to get involved. Mr Rodrigues says on the news even with the givebacks they would still have to go through with the cuts for a t least 2 weeks which is garbage. You just cancel the pick and reschedule it and keep working the schedule you're working.

CTA claimed that no matter what happened Archer garage would close so whats the problem.

[Busjack]

According to newsradio 78 this morning 241 agreed to 91 million dollars in give backs to the CTA and they were turned down. President Jefferson is now asking the Mayor to get involved. ...

However, this is like the head of AFSCME saying that he consented to "the exact amount of economies the Mayor wanted," but when asked what they were, he said "I do not negotiate in public." Some 140 of his members were laid off, and while there were news stories the next couple of weeks containing interviews with librarians, to the effect of "I personally voted for the givebacks, but they were voted down, but I'm not reshelving someone else's books" having died down, I don't expect much different with the ATU.

So, Jefferson has to say what the "exactly" $91 million "need to avert the service cuts" he offered is. If it is the old story about CTA having exceeded 3% exempts, or the 20 new supervisors in each garage, that is not going to add up to $91 million.

Since the Mayor now has made his position clear in the face of Jefferson's prior position that he was giving back nothing, maybe Jefferson is acting too late, or, as in the case about complaining that experienced management was being let go, two faced.

Also, any statement that the Mayor should get involved is hokum, because Jefferson can't be too dumb to believe that Rodriguez and Peterson are independent agents and are not carrying out the orders the Mayor publicly gave them.