Labor Reforms and Work Rule Changes Key to Preventing Increased Fares and Service Cuts
Chicago Transit Authority President Forrest Claypool today proposed a $1.24 billion budget for 2012 that holds the line on fares and maintains current service levels, relying on deep management cuts and work rule changes from labor unions.
The proposed budget is $66.2 million -- or 5.1 percent -- less than the 2011 budget.
Management initiatives will help shave $117 million from the $277 million deficit, and the proposed budget will close the remaining gap with anticipated work rule reforms, health care benefit changes and restraint in wage growth consistent with other metropolitan transit agencies.
“Since May, the CTA has launched a series of service improvements while cutting hundreds of positions and implementing management efficiencies that are saving tens of millions of dollars. The result is a lean management structure and the smallest number of employees in the CTA’s history,” Claypool said.
The new service improvements are meant to improve the rider experience and encourage new riders and revenue. To improve security, more police have been added and thousands of new surveillance cameras. To improve the convenience of customers, Bus Tracker technology has been rolled out at bus shelters to let passengers know exactly when their bus is coming. To improve the cleanliness and aesthetics of rail stations, the CTA created “Renew Crews”—SWAT teams of tradespeople to deep clean, repair, and improve more than 100 stations and subways. And hundreds of new rail cars with modern technology and passenger amenities will be arriving shortly.
“But even the most innovative service and the leanest management cannot make up for a cost structure that far exceeds the national norm—mostly driven by antiquated work rules that benefit a small number of individuals at the expense of everyone else,” Claypool said.
The CTA’s union collective bargaining agreements expire on December 31 but Claypool has already initiated the negotiation process.
Claypool warned that without labor and work rule reforms, the CTA would be forced to lay off up to 1,000 employees, reduce bus and rail service, and perhaps hike fares.
The CTA’s current financial crisis dates back nearly 30 years.
The regional sales tax distribution formula that determines how the CTA is funded, for example, was established by the State Legislature in 1983 and completely ignores both the number of rides and ridership capacity -- CTA provides 82 percent and 58%, respectively, in exchange for just 49 percent of state funding.
As part of state and federal mandates, the CTA also provides more than $100 million each year in free and heavily discounted rides. The state provides $28 million each year to help offset the cost of its mandates but this does not come close to covering the actual cost.
And perhaps most significant of all, the General Assembly in 2008 – as the recession was grinding our economy to a halt -- required immediate and fully-funded pension and health care trusts.
Unfortunately, the new pension requirements of the law, and the required attendant changes to collective bargaining agreements with labor, dramatically hiked CTA expenses while failing to produce the projected revenue that was intended to help pay for these mandates.
The CTA is confronted with a record deficit despite more than $500 million in borrowing since the start of the recession in 2008, a 2009 fare hike and deep 2010 service cuts.
During the same period of time, while labor costs were flat or down at other transit agencies, they were accelerating at the CTA. In addition, antiquated work rules cost the agency tens upon tens of millions of dollars, encouraging absenteeism, unnecessary overtime, and layers of redundant costs required to manage around the cumbersome and inflexible mandates.
Among the examples:
- Bus and rail operators who lose their licenses to drunken driving convictions can’t drive, but they remain on the payroll for six months while they try to get their licenses back.
- Employees are paid for birthdays and anniversaries of employment, and earn two and one-half times pay if they choose to work on those days.
- Tasks performed by one tradesperson in the private sector, such as a brake check or AC change out, require three at the CTA.
- Crafts employees must be chauffeured to the start of their shift.
- A rail operator can drive a train from 95th Street on the South Side to the Skokie Yards on the North Side, but must stop a few hundred feet from the maintenance barn to allow a switchman to drive the remaining distance.
- A trackman or carpenter using a chain saw cannot replace a blade without summoning a tradesman from another union.
- A series of complex work rules and mandates guarantee tens of millions of dollars in payments annually for time in which no work is actually performed.
- Collective bargaining agreements effectively prevent dismissal of chronically absent employees, forcing $40 million in annual overtime and "extra board" costs.
“Absent fundamental reform, including an end to cumbersome union work rules, the CTA’s longstanding financial problems will remain. But with leaner and better management, labor reform, and aggressive service improvements, we can permanently fix CTA’s finances, preserve good jobs, increase ridership, and invest in our future,” Claypool said.
Approximately 70 percent of the CTA’s budget is spent on labor costs, and 91 percent of the labor force is unionized.
Labor expenses make up approximately two-thirds of the CTA budget. In 2012, labor costs are estimated to be $963.1 million, $61.7 million or 6.8 percent more than the 2011 budget.
“Our challenge is to work with our employees, and their respective unions, to move the CTA’s methods of operation from mid-century to the 21st Century. Together, we can reform and renew an agency central to regional economic growth and the quality of life in our neighborhoods,” Claypool said.
CTA customers and the general public will have the opportunity to provide comments to the Chicago Transit Board on the President’s 2012 Budget Recommendations at three budget meetings. All are scheduled for 6:00 p.m. These facilities are accessible to people with disabilities.
Wednesday, November 2, 2011
Westinghouse High School
3223 W. Franklin Blvd.
567 W. Lake Street
740 W. 63rd Street
Copies of the budget proposal will also be available at the reference desks of the following libraries:
400 S. State Street, 10th Floor
4455 N. Lincoln Avenue
9525 S. Halsted Street
9400 S. Troy Avenue    
208 W. 144th Street
5215 W. Oakton Street