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Metra CEO: Rail Agency May Hike Fares, Impose Service Cuts

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CHICAGO (WBBM) — Fuel prices are driving Metra to consider emergency fare hikes and service cuts, possibly as early as July. 

Metra budgeted for diesel fuel in 2011, expecting to pay $2.35 a gallon. The prices January first were $2.62 and they have done nothing but increase until the past few days.

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Agency CEO Alex Clifford says that downtick is the only reason he’s hesitating, and wants another month to assess the situation. 

“While 30 days is probably not enough to really know what a trend is, it will give us a little more information to make a really good business decision,” he said.

Metra last increased fares in February 2010, an increase averaging 10 percent.  It has never imposed a mid-year fare increase coupled with service cuts. 

But if fuel prices stay at today’s $3.24, Metra is staring at a projected deficit of $19.9 million. Higher-than-anticipated sales tax revenues could help, but Clifford says Metra cannot cut its way out, even if prices stay steady.

Complicating the budgeting issue is the Regional Transportation Authority’s mandate that Metra recover 55 percent of its costs through the farebox. Sales tax revenues do not count toward the 55 percent, and Clifford said Metra may ask the RTA for an exemption.      

He said if it were not for the unexpected rise in fuel prices, Metra would have a budget surplus of several million dollars. 

In order to meet its budget, diesel fuel prices would have to average $2.02 a gallon for the rest of 2011. Clifford called that “highly unlikely.”

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