CHICAGO (CBS) — The Chicago Transit Authority is beginning to plan its budget for next year, and it won’t be easy to accomplish.

As WBBM Newsradio 780’s Bernie Tafoya reports, fare increases were taken off the table the past two years because of an agreement the agency made with Gov. Pat Quinn in late 2009. Instead, CTA resorted to a 19 percent service cut in February 2010, but has not made significant changes since then.

But the two-years moratorium on fare increases is up Dec. 31. When asked if a fare increase is in the offing, new CTA President Forrest Claypool hedged, but did not rule anything out.

LISTEN: Newsradio 780’s Bob Roberts reports

“It’s too early to speculate, but it’s just obvious to me that you’ve got a perfect storm of financial problems,” he said. “Declining state and federal funding, declining sales tax and other sources of funding because of the economy, which is not going to come back anytime soon even if the economy recovers. It’s going to be a long time before it’s back where it was.”

The CTA and its parent agency, the Regional Transportation Authority, have relied the past few years on borrowing — from banks and from its capital accounts, even though repair and reconstruction programs remain seriously underfunded.

Claypool said CTA cannot continue to borrow money to pay its bills if it wants to remain solvent and in safe repair.

The 2012 budget should be ready in about three months. Riders will have a chance to comment after the budget is released.

Watch & Listen LIVE