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Chicago Tribune
01-04-2025
- Business
- Chicago Tribune
South Shore fare hikes coming; state aid sought to continue operations
A previously announced 10% fare increase for South Shore Line passengers is expected this year, to be followed by future price hikes to keep up with inflation. The 10% increase could be approved as soon as the Northern Indiana Commuter Transportation District board's May meeting. General Manager and President Michael Noland briefed the board Monday on the need to avoid a fiscal cliff after the COVID-19 pandemic decimated the railroad's coffers along with ridership. 'Because of the loss of ridership, there also was a corresponding loss in revenue,' he said. The railroad is also seeking state assistance as the Indiana General Assembly drafts its biennial budget this month. 'We will get some kind of funding this year' from the state, Noland said, but just how much remains to be seen. The Legislature has an April 29 deadline to complete its work, including passing the 2026-2027 budget. The 10% fare increase, now going through the approval process, is intended as a way to not just increase revenue but also to show state officials that the railroad is doing its share to improve its bottom line. Railroad officials have had 'great meetings' with legislative leaders and the governor's office, Noland said. 'I'm cautiously optimistic.' 'We have burned through our rainy day fund,' he said, so a cash infusion is needed to keep operating and begin to rebuild reserves. Before the pandemic, the railroad had enough cash reserves to cover eight to nine months of operating costs, Noland said. During the pandemic, ridership plummeted during the stay-at-home order. While it's growing again, it hasn't reached pre-pandemic levels. More than 200,000 riders used the train in January 2019, with about 125,000 riding it in January 2025, according to a chart shared with the board Monday. That's a significant boost over January 2024, when the double-track project still required busing passengers to Gary's Metro Center station. March data was of course not available Monday, but ridership numbers for the St. Patrick's Day parade and dyeing the Chicago River will show March to be a good month for riders, Director of Capital Investment and Implementation Nicole Barker said. In 2023, the events drew 4,680 riders, growing to 4,930 in 2024 and 11,109 this year. Barker also serves as the railroad's marketing director. As the railroad improves its on-time performance, Noland looks forward to the railroad being able to boast about its on-time performance. When the double-track project was completed enough to start putting more trains in service last May, on-time performance was dismal, Noland acknowledged, at around 25% to 30%. 'There was not a single moment of recovery time in the schedule,' he said. The railroad tweaked the schedule and saw on-time performance improve to 55% to 60%. Since the newest schedule took effect on Feb. 18, performance is even better, often at 100% for rush hour trains, he said. 'We really have come a long way. We're not done,' he said. 'The low-hanging fruit is all gone.' 'Our goal is to be consistently at 90%. We're very close to that,' Noland said. 'It's going to bleed right into increased ridership,' he said. As the double-track service became operational, Noland communicated often with riders to update them on the railroad's progress and seek public input.
Chicago Tribune
27-01-2025
- Business
- Chicago Tribune
South Shore fare hikes coming this year; budget cushion has worn thin since pandemic
Fares for riding the South Shore Line are expected to increase an average of 10% later this year to make up for the financial hit the railroad has taken since the pandemic began. In addition, state legislators will be asked to kick in an additional $26 million, President and General Manager Michael Noland said Monday. 'That would get us to a healthy point,' he said, for the next 10 years. The railroad hasn't increased fares since 2018, he said. Were it not for the pandemic and the big hit on ridership public transportation has taken since the work-from-home movement began, the South Shore Line would have been in good financial shape with existing fares, Noland said. The railroad had cash reserves of six to eight months of operating expenses prior to the pandemic, he said. 'We have used that cushion to maintain ourselves,' so those reserves need to be built back up, Noland said. The Northern Indiana Commuter Transportation District board, which oversees the railroad, approved a 2025 business plan Monday that factors in both the fare increase and the requested cash injection from the state. The Indiana General Assembly is drafting its two-year budget now. Before the fare increases are implemented, the railroad will hold public hearings in the four counties it serves – Lake, Porter, LaPorte and St. Joseph. The actual fare increases will vary as the railroad factors in the impact on disadvantaged populations, Noland said. Currently, senior citizens, children and individuals with disabilities are offered half-price fares. 'We had planned regular fare increases prior to COVID, and then the floor was ripped out from under us,' he said. 'No one around the country has put in fare increases in the face of the drastically declined ridership, but given the fact that things have been pretty much stable, the stabilization of the ridership experience, and we put in the new service, we think it's time that we start some series of fare increases.' Inflationary pressures far exceeding the ticket price have hit the railroad, too. 'We, like almost every other commuter property in the country and many other transits, are at the point where we're at a fiscal cliff,' Noland said. 'This is not new because our revenues have been so depleted because of lower ridership.' 'We have spent down our cash reserves to the point where without some kind of structural change in revenue from the state we will be at a point where our ongoing operations are threatened,' he said. Noland's team began talking with leadership in the Indiana General Assembly in 2023 to discuss the situation. Legislators want riders to bear at least some of the burden of refilling the railroad's coffers. Noland isn't certain he'll get the $26 million he's seeking from the state, but he hopes to get a big cash infusion. Meanwhile, the railroad is watching expenses. Labor contracts have been settled for the next several years, so the railroad has a much better idea what operating costs will be over that period. Noland hopes the launch of the new West Lake Corridor service later this year, along with expanded operations resulting from the double track project along the lakeshore route, will also boost revenues. He's carefully watching news about workers being ordered back to the office to see how that will affect demand for commuter rail service. Off-peak and weekend ridership is strong, so Noland is planning an additional weekend train to accommodate it.
