April 5, 2016

 Leanne photo CityClub

Good afternoon--Thank you for the warm introduction.   It’s truly a pleasure to be here today.  Thank you all for coming.

 Many of you have probably heard me say this before—at times I think I am a bit of broken record—but I truly believe that the collaboration and cooperation that now exists between the RTA, CTA, Metra and Pace is key to the success of public transportation in our region.  

Many of these key partners are here today.

Did you know---all of us went to D.C. last year.

CTA, Metra, Pace, RTA---all together.

We spoke to members of the Illinois Congressional delegation, pushing for a long-term surface transportation bill and stressing the importance of transit.

On one of those visits--we walked into the office of one our members of Congress. 

His immediate reaction was-- “You know, this is great.  All of the transit agencies in Washington at the same time, advocating jointly.” 

He then said, “I’m not sure I remember this ever happening before.” 

And that’s a credit to the leadership of these individuals here today and I think it’s why we’ve been successful in our work together. 

So thank you Don Orseno, TJ Ross, and Dorval Carter and the all the board chairs, especially Chairman Kwasnewski and Chairman Dillard who are here today.  

And, of course I’d also like to thank the RTA Board and staff as well, several of whom are here today.  

And, I’d like to recognize and thank my husband, Brian, who is here also. Thanks, Brian for all your support. 

Alright--before I really get going here--I would like to acknowledge something that is probably front and center on everyone’s mind.

The state budget impasse. 

I certainly don’t pretend to have a solution. But I want to acknowledge the very real political and fiscal crisis, because the gist of what I have to say today will seem as if I’m operating in some kind of alternate universe---detached from our reality.

Because today I’m going to tell you that we have an opportunity to make a large-scale, long-term investment in a world class transit system that will pay dividends for decades to come.

If we really want to move forward--compete with our economic rivals throughout this country-- and continue to attract businesses and young talent to our metro area—we as a region---as a state--are going to have to invest in this asset that has helped build this city into a global economic leader.

I am referring to it as an investment purposefully. Like I said before, it might seem like I am a bit unhinged from the economic and political reality we are living in. But, I’m not ignoring the state’s fiscal woes.

I truly believe that a long-term plan for investing in our transit capital infrastructure is part of the solution to some of our state’s overarching problems. It’s an expenditure with an incredibly good return on investment. A mechanism for driving the economy forward.  

We have a unique opportunity—AN OPPORTUNITY--to capitalize on-- and not squander-- this asset that has:

  • been built over the last century and a half  and has
  • endured the rise of the automobile and the expansion of our region’s geography.

Transit is more important today than it ever has been.

We need to change our focus—stop thinking about long-term transit investment as something that would be nice if we had some additional money lying around.  Instead we need to start thinking of transit investment as a fundamental component of our region and state’s success.

Because if we are serious about moving forward, transit cannot be an after-thought.  It must be at the forefront. Its fate inseparable from the fate of our regional and state economy.  But, it’s not my role to prioritize the state’s spending decisions.  Lawmakers must make these decisions and I do not envy them for that, especially in these difficult political times.

And so… while I think it is certainly lawmakers’ role to decide how to invest taxpayers money, I think it is the RTA’s role to at least present a case that an investment in the nation’s second largest transit system is worthy of that investment.

We need to tell a better story about what your money could buy-- why it is important-- and how it will impact you.

Now—some of you were here yesterday to hear Jim Reilly, former RTA and McPier chair, and now a senior fellow at the Metropolitan Planning Council speak. Jim delivered a blunt message regarding what needs to be invested in our transportation infrastructure. 

I’m here to continue the drumbeat.

The truth is, as Jim indicated yesterday, we as a state and as a region have been underinvesting in our transit system for a long time. Now don’t get me wrong, I am not saying that we don’t invest a lot of money on transit…

We do. 

But that’s the operating side of the ledger. Taxpayers and riders spend billions of dollars on transit operations every year.  But, I told you earlier that I was going to present a case for making a capital investment in our system.

So here it goes.

Our region’s 2016 capital program includes $871 million in capital funding. That $871 million includes “no state funds.” In fact, we have no state money included in our five year capital program.

This is problematic. Here’s why.

We need to invest more if we want to make a dent in our current state of good repair backlog which sits at $19.5 billion.    

Here is something else to think about.

It would require an annual level of investment of $2.62 billion to bring our system into a State of Good Repair over twenty years.

As of right now—we are only investing a third of that amount on an annual basis. We didn’t get here overnight.  The state of good repair backlog has grown over the course of many years…

The product of chronic under-investment.  But everyday this issue is not adequately addressed, our problems compound.  Aging assets increase maintenance costs.  More and more of our capital expenditures are spent patching old assets so that they continue to perform as our riders expect.

Slow zones--crowded cars--buses and trains that can feel like the SAME ones RTA Chairman Dillard talks about having taken with his grandparents to the pediatrician. Don Orseno said recently that some of his Metra cars could sign up for Medicare soon, as they’re about to see their 65th birthday!

I should say--despite our significant capital deficit—CTA, Metra and Pace have been creatively investing the capital funds we do have to improve your commute and travel throughout the region:

  • Metra has built 11 new bridges on the UP North line and is in the process of building more.
  • Over the past five years, nearly one-third of all CTA rail stations received significant improvement or full reconstruction.   
  • Pace’s Bus on Shoulder ridership is more than six times higher than it was in 2010. 

We know we have to continue to invest in the new trains, buses and stations, but just as importantly, we need to invest in the “invisible stuff” that really makes it work…signals, switches, communication systems and technology that will deliver shorter travel times and more capacity. 

The things that really drive the economy. Now--we are not facing this problem alone.  This is an issuing plaguing many of the country’s old and large transit systems.  The collective state of good repair backlog of the 10 largest transit agencies in the United States is just over a $100 billion. However, other major U.S. cities have begun to look to the future, make plans and prioritize mass transit investment. If we don’t follow their lead--we risk falling further behind. 

So to put this in context…

We spend less than half of what New York spends per resident for capital projects.  Recently, New York City and State agreed to a new transit funding package. The result: a five-year $29 billion capital plan — the MTA’s largest ever. 

After New York, Los Angeles spends the most on capital per resident.  L.A. recently extended its Gold Line light rail service.  That project added 11.5 miles of rail, six new stations and park n ride lots. Additionally, California has recently passed legislation that authorizes L.A. Metro to place a sales tax measure on the ballot for voter consideration.  The ballot measure is one part of a long term expenditure plan which anticipates $120 billion of transportation investment over a forty year period (the bulk of which would go to transit). 

And it’s not just our most obvious competitors who are investing. Cities that several years ago had very little mass transit are raising revenue--building lines and trying to catch up with us.

Seattle is in the process of expanding its light rail system through increased sales tax and license plate registration fees.  And just 10 days ago, announced an ambitious $50 billion, 25 year light-rail expansion ballot initiative.

 This year alone, Denver is opening five new transit lines--funded through an increased sales tax. And in the past 30 years, Dallas has gone from having no light rail system, to having the most extensive system in the country—running 90 miles.  Adding to its bus and commuter networks.

So why are these other cities choosing to invest in transit?  Why should we?

Well—let’s start with this. 

Every billion invested in public transportation supports and creates more than 50,000 jobs. These 50,000 new jobs generate billions of dollars in additional sales—an increase in GDP—and increased worker income.

After the Morgan street station on the Green and Pink Lines opened in the West Loop, the number of business licenses issued within a ½ mile of the station jumped 13 percent.

What else?

Well—transit increases home values.

  • When the New Jersey Transit rail system reduced travel times to Midtown Manhattan, home values in New Jersey grew by $11 billion in the first 10 years.
  • That generated $250 million in new property tax revenue. 
  • During the recession, homes located near Metra stations were more likely to retain their value as compared to home values in the rest of the region. 
  • Making them more resilient and performing 23% better.

 The economic benefits of transit investment are real and significant.

See this isn’t just a system that costs taxpayers and riders billions of dollars a year—

It’s a system that generates billions of dollars a year for this city, this region and this state.

It’s not just a system that is funded with the sales tax you pay on your daily purchases—

This is a system that generates sales and drives our economy.

The question shouldn’t be how can we afford to make this investment?

The question should be HOW CAN WE AFFORD NOT TO?

You may be wondering to yourselves, “why now?”

Certainly we have delayed major capital investments in the past.

But--I would argue that by not acting now, we are truly missing an opportunity.

The economy is changing and now—more than ever—employers want to be based in high-density, urban locations. This clustering of businesses, people and ideas is the type of marketplace that transit promotes.

 More than 62% of workers coming to the Loop take buses and trains, the arteries of Chicago. Those buses and trains keep the blood flowing to the heart of our regional and state economy. 

The number of rides on CTA last year was 515 million—and that was the eighth straight year in are row that they provided more than 500 million rides.

As more and more companies and jobs gravitate towards Chicago’s central business district, we must continue to assure that the system is healthy enough to meet the ever increasing demand.  This increased urbanization is a nationwide trend.  And our competitors have not been afraid to capitalize on this trend—knowing that there is broad public support for transit investment.

People are willing to pay for safe, reliable transit that gets them where they need to go.

  • Last November, 79% of the transit initiatives on ballots passed.  That’s 11 of 14 across the nation.
  • Since 2012, 21 states have approved plans to raise additional revenues to pay for transportation.
  • Since last year, nine states have chosen to raise their gas tax to fund infrastructure investment.

A recent study shows two-thirds of Americans support using the gas tax to fund transit.  Other areas of the country are recognizing the public acknowledgment that we must pay to maintain our reliable transportation networks.

And I’m going to go a step further and say, not only should we take the opportunity to invest now, that investment should be a long-term commitment.  A dedicated, stable long-term revenue source will provide certainty and allow for the planning and execution of large capital projects.

But even if we aren’t guaranteed long-term funding, we still need to plan for the future.

I believe we should plot our long term needs and create partnerships and creative solutions to get there.  What I fear is that the day to day or year to year crisis stymies our long term growth.

I think what we too often do is plan and program around the political climate of the present day. We need to start thinking beyond our five year capital programs. Beyond five year federal funding authorizations. Beyond intermittent and unpredictable five year state plans.  We too often react to what is politically feasible and—in doing so—we leave out a large part of the narrative.

You know what?  I think those visits we did to D.C. last year really did make a difference. We were a unified voice that helped persuade Congress to pass the FAST Act—a bill that includes billions of dollars in federal funding for our region over the next five years. Nonetheless, we still have to contribute.  I certainly don’t want to downplay the importance of federal dollars but it cannot alone provide the level of funding we need.

We are not asking for a state subsidy.   We are talking about an investment. We have a real opportunity to accentuate our assets, create jobs and have the region profit from the success.  But, with that being said---we could delay our investment in our transit capital infrastructure.

We have certainly delayed this investment in the past.  There is no red siren going off. No alarm threatening a shutdown of our system or massive fare hikes and service cuts. The decline will be, as it has been, gradual.

Over time, as more and more of our transit assets fall out of a state of good repair, service will likely become more sporadic, stations will fall into a state of DISREPAIR and on time performance will lag. If the result is a decrease in ridership, this will only accentuate the problem, leading to less operating revenue and eventually those service cuts and fare hikes.  

A vicious downward spiral.

With no investment in our capital, we will certainly be outpaced by our national competitors who--in appealing to changing demographics and a demand for an increase in flexible mobility—are choosing to invest in their own transit assets.

We have already seen this increase in investment begin around the country.

Without the proper capital investment our system will be:

  • alive but not vibrant
  • operating but not growing
  • rolling along but not truly moving forward

The bottom line is, as Jim pointed out yesterday, the underinvestment in our transportation system is really a state crisis.  A crisis that can be partially addressed by the lawmakers in Springfield and one that affects everyone in the state. We simply can’t afford to fall further behind. Yet, unlike some of the other major issues facing our state, this particular crisis presents a unique and significant opportunity.

Investing in our transit system is not just another problem that we have to deal with in this unprecedented state fiscal crisis. 

Wouldn’t it be ironic if we took the system we’ve had more than a century for granted—while other U.S. cities pour money into theirs—and we actually fell behind them.

Please join me in making sure that doesn’t happen.

In closing, I want us all to start thinking differently when it comes to funding our transit system.

  • A long-term funding source dedicated to our system’s capital assets is an investment.
  • A necessary investment.
  • An investment that generates jobs—construction-- economic activity and sales.
  • An investment in a young and mobile workforce who rely on and demand reliable transit service.
  • An investment that retains an aging baby boomer population who seek additional transit options in their retirement years.

In short---this is an investment should be seen as part of the solution.

  • Let’s change our mindset.
  • Let’s work together.

Thank you.