A boost in the six-county sales tax receipts is more than compensating for the operating hit January’s bitter cold caused the region’s transit agencies and should fuel fatter 2015 transit budgets, officials said Wednesday.
Regional Transportation Authority officials said they expected regional sales tax revenues to grow 4 percent next year as they proposed doling out a 5.2 percent increase in 2015 operating funds to the CTA, Metra and Pace.
With former State Sen. Kirk Dillard presiding over his first meeting as RTA chair, Wednesday’s session showed few signs of the behind-the-scenes bickering by transit agencies over their proposed RTA funding, or “marks,’’ that have become typical this time of year.
CTA, Metra and Pace are chewing over their “marks,’’ but seem “very close” to agreeing on them, RTA Chief Financial Officer Bea Reyna-Hickey told board members.
Average year-to-date ridership for CTA, Metra and Pace is 3.2 percent below original estimates, thanks in part to January’s brutal cold, RTA officials said. In addition, the operating cost per passenger trip is, on average, 1 percent higher than last year, RTA documents indicated.
But strong regional sales tax results have ridden to the rescue. The sales tax boost was tied to less unemployment and sales growth within several sectors through April over the previous year. The RTA sales tax, ranging from 0.25 to 1 percent, is the primary source of revenue for the RTA system.
“Public funding has gotten itself out of a hole,’’ Reyna-Hickey said after briefing board members on the sales tax improvement.
Regional sales growth leaders were agriculture and manufacturing, up 9.1 percent; auto and filling stations, up 6.1 percent; and restaurants and bars, up 3.5 percent. General merchandise was up 2.1 percent, although apparel was still down 2.4 percent through April, RTA figures released Wednesday indicated.
RTA officials also linked the revenue growth to numerous companies that have ended the use of sham offices used to avoid RTA sales taxes. Following legal action by the RTA, nearly 100 such companies have decreased to less than a dozen, RTA spokeswoman Susan Massel said.
As a result, on Wednesday the RTA proposed increasing public funding to the CTA’s 2015 operating budget by 5.6 percent, to $739.8 million. Metra would see a 4.5 percent increase, to $381 million, and Pace would see a 3.3 percent increase, to $155.8 million. That adds up to an average increase of 5.2 percent.
Those operating amounts include the biggest issue of annual dissent: discretionary funds. The 2015 pot of $200 million in discretionary funds would be split 96 percent to CTA, 2 percent to Metra and 2 percent to Pace.
Last year, the CTA got 98 percent of about $178 million in discretionary money; Pace got 2 percent; and Metra got money from another pot for capital projects, Reyna-Hickey said.
But to get its new discretionary money, Metra has been asked to put the funds toward its growing capital needs in a way that would involve “debt service,’’ Reyna-Hickey said. In the past, Metra has refused to issue bonds unless its debt service was tied to a guaranteed revenue stream. Reyna-Hickey conceded the infusion would not be guaranteed beyond 2015.
Metra spokesman Mike Gillis called it “encouraging” that the RTA proposal includes discretionary money for Metra, but cautioned that “we are very early in the process of meeting with the RTA and our sister agencies to reach agreement on a final budget.’ ”
Of the additional capital dollars it doles out, the RTA is proposing giving $322 million to the CTA; $205.6 million to Metra, and $68.7 million to Pace.
Metra CEO Don Orseno last week refused to rule out a 2015 fare increase after staff unveiled back-to-back presentations indicating that Metra’s capital needs are far outstripping revenues.
Reyna-Hickey also revealed that the RTA would like to boost its reserve fund from half a percent of the operating budget to 3 percent by 2018. As a result, it is proposing to add $8.6 million in discretionary funds to the reserve next year.
The reserve could be used in an emergency, such as if there was a “major sales tax shortage,’’ Reyna-Hickey said. But the transit agencies have said they prefer to hold their own reserves, Reyna-Hickey said.
Also Monday, Reyna-Hickey said RTA officials have decided they prefer to refer to discretionary funds as “non-statutory” funds.