By DIANE ROSS

ONCE upon a time, there was a spoiled brat who came from poor parents in Chicago but who had rich grandparents in Springfield — and cousins in the suburbs who rarely invited him to dinner. The brat used to get an allowance from his grandparents, but that stopped when he was five, because his Aunt Jane, who was running the family business then, said he could get along without it. About every other year after that, the brat threw a temper tantrum, holding his breath so his face turned red, until his grandparents mailed him a check. When he was 10, his grandparents had had enough tantrums. They said he could have his allowance back — but only if he left home in the city and went to school in the suburbs. About the same time, his was feuding over the family business: Uncle Harold won out over Aunt Jane, but Uncle Eddie still wants control the business. When it came to where the brat was going to school, Uncle Harold sided with the grandparents after they said Harold could help pick out the school. So the brat went to his Uncle Eddie, who was his favorite anyway, for help. Uncle Eddie tried to get some of the city cousins to save him, but most of them ganged up with the suburban and downstate cousins against him. Off went the spoiled brat from the city to the suburbs. So ends the plot summary for that blockbuster series: "RTA."

But truth can be more dramatic than fiction, as the Regional Transportation Authority (RTA) learned during the fall legislative session.

The General Assembly gave the RTA a new, permanent state subsidy of about $75 million a year, but lawmakers took away the RTA's old, city-controlled board, replacing it with a new, suburban-controlled fiscal regulatory board with veto power over the budgets of three separate operations boards for city buses and trains, suburban buses and commuter trains.

The most significant RTA reform yet, this combination of a state subsidy and a local fiscal regulatory board was designed to put the RTA on solid financial ground — once and for all — by October 1, 1984, when fiscal 1985 starts for the RTA. At the same time, the reform was intended to prevent any more deficits, to drop the hated surcharge on commuter train fares (the surcharge doubled the fares in 1981) and to prevent any shutdowns.

The new, permanent state subsidy came with strings attached, strings designed to break the RTA's bad habit of delaying any action until only a handout from Springfield would stave off a shutdown. Under the formula spelled out in the reform bill, the maximum state subsidy will be equal to 25 percent of the RTA's local sales tax revenue (1 percent in Cook County and .25 percent in the collar counties of DuPage, Kane, Lake, McHenry and Will). To collect the maximum subsidy, however, the RTA must recover 50 percent of what it spends on operations from its own fareboxes. Thus, if the RTA fails to cut costs when the fares no longer generate half of what is spent, the RTA will fail to capture the maximum state subsidy.

The state subsidy will be $75 million in state fiscal 1984, which ends June 30; payment in eight monthly installments of $9.4 million each began in November. Since the RTA's local sales tax revenue is expected to rise with the recovery of the economy, the maximum state subsidy is expected to reach $80 million during state fiscal 1985.

When the state paid the first installment, it also officially forgave some $35 million due as the balance on an old loan to the RTA. The state made a $50 million loan as an advance when the RTA was created in 1974; the RTA managed to repay only some $15 million, mostly in 1975.

With one-half of its operating revenue to come from the farebox, the other half will primarily come from federal subsidies, the new state subsidy and the RTA's local sales tax.

To put the RTA on solid financial ground, the 1983 reform went far beyond earlier attempts by providing for the separation of fiscal policy and operations. The responsibility for regulating the system's finances was delegated to the new regulatory board, while the responsibility for operating the system's buses and trains was delegated to the three subsidiary boards.

As soon as the reform legislation was signed into law, the old 13-member RTA board was immediately replaced with a temporary nine-member board headed by Illinois Secy. of Transportation John Kramer (see Names, p. 42), which will oversee finances until October 1, 1984, when the permanent 13-member regulatory board will take over. Meanwhile two new subsidiary boards are being created to operate suburban buses and commuter trains as counterparts to the existing Chicago Transit Authority (CTA), which operates the city's buses and elevated and subway trains.

The new 13-member board will be weaker than the old, politically, since it will not be involved, directly, with hiring and firing. Thus no potential for patronage. But the new regulatory board will be stronger, fiscally, because it will have veto power over the budgets of the three operations boards — including the power to reopen negotiations if it determines that labor contracts are too costly. The three operating boards will be required to show the cost of labor contracts within their budgets.

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The budgetary veto power is designed to break another one of the RTA's bad habits: subsidizing the CTA by rubberstamping its labor contracts with the Amalgamated Transit Workers Union (ATWU). The temporary nine-member RTA board is charged with making sure the CTA immediately solves its fiscal problems, most of which are due to high labor costs. Under the RTA reform legislation, the CTA was ordered to cut $36 million in spending from its current budget and thus avoid a deficit by December 31, 1983, the end of its fiscal year. To accomplish this, the lawmakers clearly intended that the CTA renege on a "loan" from its unions. The CTA had deferred about $70 million in employer contributions to its employee pension funds since 1981, and was scheduled to begin to repay the money in 1984. In November, the ATWU insisted the unions would sue if the CTA failed to make the first payment on schedule.

In addition to cutting spending, the CTA was ordered to control costs in the future, chiefly by refusing to give the unions automatic cost-of-living increases and by agreeing to include part-time drivers in contracts.

Finally, the reform legislation included one other provision that had nothing to do with the subsidy or the regulatory board, but that represented the one RTA reform the suburbs had always wanted more than all the others — the ability for a county to "opt out" of the six-county regional mass transit system. Within days after the bill passed in November, Will County became the first to announce plans to put such a referendum on the ballot in the March primary. (If a collar county votes to secede from the RTA, its sales tax earmarked for mass transit will still be in force, but the revenue would go to locally operated systems instead of the RTA.)

The political moral of the 1983 RTA reform story — as erstwhile RTA board chairman Lewis W. Hill learned — is an old one: Never play your Democratic uncles against each other; your Republican cousins will win every time. And Republicans weren't the only ones who won. A complete list included: suburban Republicans over city Democrats, Chicago Mayor Harold Washington over Alderman Edward Vrdolyak, state transportation secretary Kramer over RTA chairman Hill, the RTA over the CTA, and the CTA over the ATWU.

In the final analysis Chicago got one last bail out, but the suburbs took over the shop. The Chicago Democrats had wanted a new subsidy since 1979, when then Mayor Jane Byrne swapped a standard state subsidy for special local sales tax power.

The suburban Republicans had wanted to seize control of the RTA ever since it was created in 1974 when many felt it was thrust upon them. Backed by Gov. James R. Thompson, they had insisted the RTA would never get another subsidy unless it submitted to reform. The suburban Republicans had despaired of ever getting the chance to change the city-dominated RTA, until last spring, when Washington was elected and the bitter feud with Vrdolyak began, creating a schism in the solid bloc of Chicago Democrats in the Statehouse as well as the city.

During the spring session, the issues of funding for downstate roads and funding for Chicago area mass transit were separated for the first time: Downstate got its piece of the transportation pie when the General Assembly approved a gas tax increase to finance road repairs; the RTA reform bill (H.B. 1805) passed the House but stalled in the Senate in the last days of June when Washington made his own demands. He insisted on a larger subsidy and some of the seats on the then five-member temporary regulatory board. The reform bill was stuck as time ran out. The lawmakers had already earmarked $75 million for the RTA subsidy for state fiscal 1984, but it was only to go to the "reformed" RTA. In other words: no reform, no money.

When the legislature reconvened for its fall session in mid-October, Thompson and Washington reached a compromise on RTA reform — their first deal since Washington was elected — after summit meetings with the four legislative leaders. It was a significant victory for Washington, who snagged two seats on the board (Thompson also got two more seats, expanding the board to nine members) — and salvaged the $75 million subsidy. (By then Washington had given up hope for a larger subsidy, and many lawmakers were suggesting it should be much smaller, since nearly four months of the state fiscal year had elapsed.)

Downstaters with their own mass transit systems wanted more out of the deal. Subsequently the legislature adjusted the separate formula used to figure subsidies to downstate mass transit, increasing the state reimbursement rate from 33 to 40 percent (H.B. 645). That meant $1.6 million more was added to the $7.6 million the 13 downstate mass transit districts (including the St. Louis area's bi-state system) were already scheduled to receive for state fiscal 1984.

The pressure was great to avoid any spending that might lead to even greater pressure this spring to extend the increase in the state income tax. That pressure, perhaps more than anything else, convinced Washington and his bloc of Chicago Democrats to take the $75 million earmarked in June. For the subsidy, it was now or never.

With Thompson, Washington and the four legislative leaders firmly behind them, the suburban Republicans thought they had finally put together the winning coalition: Washington Democrats, suburban Republicans and some downstate Democrats and Republicans. When the legislature was midway through its fall session in early November, however, a head count in the Senate showed the vote on H.B. 1805 was too close to call.

In an eleventh-hour, grandstand play, Hill made a desperate appeal fpr help from Vrdolyak since the RTA reform would strip Hill of his job. On top of that, the predominantly black ATWU realized it stood to lose millions in pension benefits. Swearing that Washington, whom they had helped elect, had sold them out, the transit workers came to Springfield and packed the Senate galleries. The arm twisting went right to the wire: Vrdolyak and Washington with the Democrats and Thompson with the Republicans. As the Senate debated the bill November 2, the six black senators rose one by one, admitting labor had been sold out, but insisting neither they nor Washington had had any choice. When the scoreboard locked on H.B. 1805, the vote was 37-19: Five of the six blacks had voted "yes," pushing RTA reform one vote beyond the three-fifths required for the bill to become effective immediately.

38/January 1984/Illinois Issues