RTA to borrow $166 million to freeze CTA fares for two years

Transit officials and Gov. Quinn announced a plan today that will freeze CTA fares for two years by having the RTA borrow $166 million.

Under the agreement,  the RTA will issues bonds for capital projects in 2010 and 2011, allowing money to be shifted to CTA’s operational budget to help fill a $300 million shortfall.

“Access to affordable and reliable public transportation is imperative for Chicago-area transit riders,” Quinn said.

The plan, which would also freeze Pace paratransit fares for two years, would have the state pay debt service of $15 million over the first two years. After that, the CTA could pay debt service of $10 million a year if it could, or the state would continue to pay.

Quinn denied that he was postponing addressing CTA’s fiscal problems by borrowing more money. “This is exactly what we have to do in an emergency,” Quinn said.

The CTA had threatened to increase fares to as much as $3 for an L ride. Proposed service cuts remain on the table, but CTA Chairman Terry Peterson said the agency continues to talk with the state and with its unions to find ways to avoid service cuts.

The CTA attributes its budget shortfall to the slumping economy, which has cut into sales tax and property transfer tax revenues.