Tudor Van Hampton/ENR CTA threatened twice this year to cut jobs and service routes.

The transit woes in Chicago illustrate the bigger epidemic of stingy mass-transit spending nationwide, experts say. “It just happens to be more severe in Chicago because it’s an older, more mature system,” says Peter Gertler, vice president of Kansas City, Mo.-based HNTB Corp.’s transit consulting group. More transit agencies are looking for sources of dedicated, local funding as infrastructure needs increase under tightening state and federal budgets, he says.

Construction experts say that Chicago Transit Authority, which handles about 500,000 daily riders, has made strides inimproving efficiency, streamlining procurement, restructuring staff and prioritizing spending. But it still needs stronger support from lawmakers downstate in Springfield, Ill., to get the funds it needs to put its 244-mile local city train and bus transportation system back into good repair over the next five years. CTA officials peg the total cost of these improvements at $8.7 billion, but they can only scrounge up $2.4 billion today.

What has ensued is a tense game of tug-o’-war between the big-city interests in Chicago and the largely rural downstate constituency. All along, public-interest groups and transit supporters are arguing that the economic benefits of the region’s transit cannot be undervalued any longer.

The situation is dire. Elevated platforms look like rusty Erector Sets, and rail components are so corroded that trains on them have to run six miles per hour to avoid derailing as workers scramble to make fixes. “They’ve been putting it together with glue and paperclips for a long time,” says William G. Grams, head of Itasca, Ill.-based Illinois Road and Transportation Builders Association. “It’s now at a breaking point.”

Tudor Van Hampton/ENR Capital improvements could get hammered if fresh funds are lacking.

Transit officials who are sounding the alarm use the words “crisis,” “critical” and “doomsday” to describe the financial outlook. This year, CTA has threatened twice to cut routes and jobs to balance its budget. Both times, the state shook loose emergency stopgap funds. But the clock is now ticking again down to more severe cuts in January if legislators cannot agree on a funding scheme, which was last revised in 1983. Meanwhile, future construction projects remain in limbo.

Chicago’s transit routes “are sort of hit by a double whammy,” says Gertler. State funding for the CTA hasn’t been keeping up with inflation over the past two decades, and at the same time, state lawmakers are “saddled with a balanced-budget issue,” he explains.

That same dilemma has forced transit agencies nationwide to look for more dedicated, local funds, rather than relying on state and federal dollars. The Regional Transpor-tation Authority, which oversees CTA and two other transit agencies, has since 2003 diverted $419 million from capital improvements to fund local operations crunched under rising pension contributions, security requirements, disability needs, inflation and construction costs. Simply put, RTA’s tax base and fare schedule are no longer paying the bills.

While state lawmakers see the need for Chicago to have a world-class transit system—it is bidding for the 2016 Olympics—some believe that transit managers will waste money on glam projects that are less crucial to the region’s growth and more important for Mayor Richard M. Daley’s electability. Transit officials have reshuffled staff and started upgrades to prove their reform. One visible step came in May, when CTA’s board of directors installed Ron Huberman, a hard-line mayoral aide and former beat cop with a reputation for cleaning up corruption, to its top management.

Playing Chicken

Now, transit officials are calling on lawmakers to meet in the middle. But few are playing nice. “You have to be willing to play chicken,” says Robert E. Paaswell, head of the University Transportation Research Center at City College of New York and former CTA chief. “Usually, the legislature always blinks first,” he adds.

Lately, it has been more stalemate than checkmate. Transit officials say they have done all they can to shave fat off the bottom line, while a state auditor’s report in March pointed to inefficiencies still left unresolved. It concedes, though, that the agencies “are facing a serious financial shortfall,” adding that the problem is exacerbated by low fares and taxes.

“Where there are some areas where we can save money…it’s nowhere enough to fill the hole,” adds Stephen E. Schlickman, RTA’s executive director. The auditor concluded that “our financial problem in the operations side could not be addressed through means we control.” One proposal lawmakers are discussing is using revenue from new casinos in town to fund transit, road and school improvements. Currently, Illinois only allows gaming boats, located on the city’s edge.

Some critics believe the answer is not in gaming but in higher fares and taxes in exchange for better service. “Chicago needs to review what’s in the textbook,” Paaswell says. “Casinos are really like the government throws up its hands and says, ‘We just don’t know what to do about economic development.’”

The money crisis turned into a safety crisis this summer, when the National Transportation Safety Board released a 64-page report on a CTA subway derailment last year that injured 152 of 1,000 train passengers. An outer rail in a curve shifted laterally under corroded, bent and broken fasteners during rush hour.

No one was killed, but federal investigators identified problems with “ineffective management” and budget pressures that “caused track inspectors to be used to perform maintenance instead of inspecting track.” It also found that inspectors had the lowest training requirements in the country and were falsifying track reports. CTA’s Huberman says he has since beefed up the inspection program and is making capital improvements that are “a worthwhile investment of the limited funds available.”