The governor's comments come after Mayor Daley said Blagojevich could be blamed if the CTA had to raise fares.
The mayor and agency officials say the governor's free rides for seniors program has forced the CTA to make another $40 million in cuts.
The governor says he wants to look into why the CTA is "wasting" taxpayer money.
It was a very angry Governor Blagojevich going off on mostly the CTA Wednesday. He says the CTA should stop lying to the people and stop breaking promises made in order to get a sales tax increase. Wednesday's heated words came one day after Mayor Daley pointed fingers at Blagojevich for offering free rides to senior citizens.
"Go back to the CTA and tell them to stop lying to the people. They already broke their promise because they laid off some workers. And now they're talking about a fare increase, which is yet another broken promise," Blagojevich said.
A heated Governor Blagojevich accused the CTA of lies, lies and more lies after CTA president Ron Huberman announced a $40 million budget shortfall Monday.
To close the gap, the CTA is laying off 80 administrative positions and reducing maintenance costs.
Huberman said fare increases are also a possibility in 2009. And he blamed much of this year's budget problems on Blagojevich's insistence on free rides for seniors.
"The question is, had the free rides program not occurred, right now we would be north of $30 million in additional revenue, and our picture would be very, very different," Huberman said.
But Blagojevich said that the sales tax increase brought in about $250 million in new revenue for the CTA.
"Free rides for seniors costs around $35-37 million. They are more than $215 million ahead of the game, and they get the benefit of giving our seniors the chance to take public transportation for free," said Blagojevich.
Blagojevich also made an indirect stab at Mayor Daley, saying the CTA board takes its marching orders from city hall and is designed on raising sales taxes and increasing fares.
On Tuesday, Daley took aim at Blagojevich for his free rides for seniors program.
"It's great to sit there and say, 'I want to mandate everybody,' and say, 'You can do this, I sound like a great politician. I gave everything away.' But it costs somebody else some money," Daley said.