Metra has an unsustainable economic model and faces the worst financial crisis in its 33-year history. In addition to a chronic lack of adequate funding for capital assets, such as rolling stock and infrastructure, Metra is now faced with decreased funding for operations.
Why is Metra’s current situation so critical for the people of northeast Illinois? Metra, together with the Chicago Transit Authority and Pace Suburban Bus, are the threads that hold the economic fabric of northeast Illinois together. The region is highly dependent on public transportation.
Metra’s importance to the Chicago region cannot be understated. Metra provides about 300,000 passenger trips in northeast Illinois each weekday — safely, reliably and comfortably. Metra saves its riders time and money, enhances the environmental health of the region and fuels its economic engine. Metra benefits even those who do not ride its trains. If Metra did not exist, 27 more expressway lanes would be needed during rush hours to accommodate the extra vehicles and arterial roads would be clogged with traffic trying to reach those expressway lanes.
Contrary to public perception that fares cover most of our costs, the facts are just the opposite. Metra’s mandate, under the RTA Act, requires it charge fares that cover approximately half of its operating costs. Metra is dependent on government funding, primarily a sales tax levied in the six-county region, for the remainder of its operating costs and on federal and state funding for virtually all of its capital needs. Combining the annual capital and operating budgets, fares presently cover about one-third of Metra’s yearly costs. In fact, if adequate operating and capital funding were provided, fares would cover only one-fifth of Metra’s yearly costs.
Over the last several years, public funding has not kept up with needs. Metra has been and is now receiving about a quarter of the capital funding needed annually to achieve and maintain a state of good repair on its existing system — never mind expanding or enhancing its system to address regional changes and growth. As a result, Metra has fallen behind on its maintenance investments and will continue to fall even further behind.
Railroads are very capital-intensive, requiring substantial annual investment to maintain rolling stock and infrastructure. Railroads own and maintain their own rights-of-way and track structure, unlike bus operations, which use streets that are owned and maintained by the public. Metra’s capital assets are diverse and extensive: locomotives, passenger cars, track signal and communications equipment, yard and maintenance facilities, station buildings, platforms, parking lots and headquarters. Each day, the delivery of safe, reliable, efficient train service depends on these assets; though many are never seen by riders. Constant maintenance, rehabilitation and replacement, and significant funding, are required to keep Metra’s facilities and equipment in working order.
Metra must make significant investment in its people in addition to its capital assets. Long-tenured, well-trained employees assure the safe transport of Metra’s most precious asset: its riders. Metra must invest in people and compensate them on a level that will attract and retain them. Metra competes for talent among railroads, not government agencies.
Because capital funding has been inadequate, Metra now has the oldest commuter fleet in the nation. Approximately 40 percent of Metra’s assets are classified as in marginal or worn condition. Half of the 800 bridges in Metra’s system are 100 years old or older. These assets, while safe, have exceeded their useful lives. Metra will always run a safe railroad, but continued use will result in higher operating costs and degraded on-time performance.
Public funding for operating costs, provided through a regional transportation sales tax and a partial state match, is falling short. Sales tax collections have fluctuated with economic conditions and have not met projections, even after the tax was increased in 2008. In recent years the shift from purchasing at brick-and-mortar stores to internet purchases has also hurt tax collections. The public transportation fund, a match to sales tax which came from general appropriations from the state budget, has been cut 10 percent in the most recent state budget. Collections from the RTA sales tax have had a 2 percent surcharge imposed by the state. The ADA program is increasing in cost, causing less and less money from sales taxes to be made available to Metra, CTA and Pace.
Public funding for capital is also falling short. In past decades, the state recognized the need to fund capital improvements for public transportation and did so regularly. In recent years, the lack of a state bond program for capital investment has had impacts on funding for public transportation. Metra understands it cannot continue to ask its customers to pay higher fares in the absence of adequate public funding.
The current situation is unsustainable, and threatens the future viability of the important service Metra provides. Funding levels will need to change to ensure Metra can continue to provide the service its riders depend upon, or else that service will have to be cut.
After reading this budget and program document, we hope that you clearly understand our overriding message: we cannot continue as we are. We either need to fund our public transportation properly or be willing to watch it continue to degrade, including reductions in service. With the proper amount of sustained public investment, we can create a system with a long and bright future. It is clearly in the interest of the citizens of northeast Illinois for Metra to do so.
JAMES M. DERWINSKI - CEO/Executive Director
NORMAN CARLSON - Chairman of the Board