CTA Management Scams Public With "Cost Cutting" Claims, While Hidden Employee Benefits Go Out Of Control

CHICAGO-CTA management is scamming the public and the media by claiming that it has slashed personnel costs, charged the president of Illinois’ largest taxpayer organization, who added that the CTA’s employee pension benefits are out of control. He charged that these hidden employee benefits are fueling the cries for a proposed $435 million tax increase.

“CTA President Ron Huberman complains about the ‘myth’ of a bloated bureaucracy and implies he has cut expenses to the bone by eliminating 75 administrative positions and cutting overtime 30%,” said Jim Tobin, President of National Taxpayers United of Illinois (NTUI). “He stated that the CTA doesn’t have trains and that the buses are being run into the ground, neglecting to mention that 80% of total operating costs go to salaries.”

“Even that doesn’t tell the whole story,” said Tobin. “Hidden employee benefits are the real cause of the CTA’s being in the red, and they are totally out of control. In 2000, the CTA pension plan was 80% funded. In January 2006, the plan was only 34% funded because the money was shifted to wages and salaries.”

“The net pension benefit obligations rose from $602 million in December 2004 to $918 million in December 2006. That’s an astounding 51% increase in just two years!”

“In 1999, the ratio of CTA’s fringe benefit cost to labor was 57%. By 2004, the percentage had increased to 86% of labor costs. Pension obligations account for much of the fringe benefits costs. It is conceivable that soon these hidden fringe benefits will be greater than total salaries.”

“The CTA is sick-terminally sick. Rather than continue to raise taxes to fund this money-eating monster, such as the recent proposed tax increase in Springfield that would increase the CTA/RTA sales tax in Chicago’s collar counties by 200%, the CTA/RTA sales tax of Cook County by 25%, and Chicago’s real estate transfer tax by 40%, it’s time to consider radical measures, which could include breaking up the CTA and privatizing some of its parts.”

Click here for the news release.

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