Chicago regional transit agency wants more funding, wider authority

With Chicago-area transit services facing a fiscal cliff and state lawmakers in Springfield advocating major governance reforms, the region’s Regional Transportation Authority released a plan last week calling for $1.5 billion in operating funding from state and local sources and more RTA control over regional fare policy, capital spending and partnerships with the private sector. 

The authority oversees the Chicago Transit Authority’s bus and rail transit in the city, Metra commuter trains to the suburbs and Pace suburban buses, but does not have the authority to make changes to fares, capital projects and service quality throughout the year. 

The RTA said its plan would decrease wait times for transit by as much as 50%. And it promised that for every $1 invested, the region would see a $4 return in economic benefits.

The plan does not include the consolidation of the various Chicago-area transit providers under one new Metropolitan Mobility Authority, as proposed by state Sen. Ram Villivalam, D-Chicago, who chairs the Senate Transportation Committee and who last year led a series of hearings on the challenges facing Chicago-area public transit.

Villivalam was unavailable for comment by press time.

“While the RTA is opposed to full consolidation, we have long agreed that funding must come with governance reforms,” RTA Director of Communications Tina Fassett Smith told The Bond Buyer. She said the reforms proposed in the RTA’s new plan amount to “a historic restructuring” that would make the RTA more responsive to riders and legislators.

“Years of underfunding have left Chicago’s transit system operating in survival mode, with just enough to get by,” the new RTA plan said. “While the transit system’s budget gap is just over $750 million, independent agencies and advocates agree that we need $1.5 billion annually to achieve the system we need.”

The RTA said in an October blog post that it cannot borrow its way back from the fiscal cliff. The legislation that created the RTA limits its authority to $100 million in short-term borrowing for operations and $800 million in long-term borrowing for capital projects. 

Much of the $800 million is currently outstanding, the RTA said, and because its current funding levels do not match its budgetary needs, lenders would view it as a poor candidate.

Chicago-area public transit gets funding mainly from fares and sales tax revenues.

Ridership lags pre-pandemic numbers, according to the RTA’s public dashboard; CTA rail ridership is only 58% of pre-pandemic numbers, while city buses are at 77%.

The CTA bus and rail ridership totaled 279.1 million in 2023, the last full year for which nunbers have been published.

The share of transit riders with incomes under $50,000 grew from 39% pre-pandemic to 50% by 2021, according to a strategic plan released by the RTA in 2023.

The sales tax revenue is allocated three months after taxes are collected. The state chips in a match to the sales tax via its public transportation fund. But that 30% match of sales tax revenue given to the RTA can be delayed depending on the state’s financial straits, according to the RTA. 

The RTA noted in its new plan that the state’s matching contribution “is among the lowest in the nation among peer states with similar large transit networks,” and Illinois spends four times more annually on roads and highways than public transit.

“While we are advocating for the state to increase direct funding, sustainably funding the system will require a mix of revenue streams,” the RTA’s Smith said. “Most of our funding comes from locally collected sales tax and rider fares, so we are also asking the state to allow us to collect an increased amount of funding locally.”

According to U.S. Census data, Chicago is second only to New York in the number of total public transportation commuters by metro area.

Yet as the Funders Network — a philanthropic group dedicated to sustainability and social justice based in Coral Gables, Florida — noted in a fall 2023 Midwest transportation landscape assessment, Chicago-area transit’s funding shortfall is due to hit in 2026 and has not been addressed even with Democratic control of the state legislature.

“Despite a blue supermajority at the state level, the Illinois Department of Transportation lags on incorporating climate and equity into its planning and projects,” the network said. 

The network further noted that “the advocacy landscape in the Midwest is sparse and under-resourced… [with] 121 nonprofit organizations that engage in transportation advocacy on some level.” 

Within that group, public transit advocacy is short on funds compared to electric vehicle advocacy.

“While groups devoted to EV issues represent only a sliver of transportation advocacy work in the Midwest, they nonetheless have a combined budget nearly four times that of those organizations focused solely on mobility, reflecting significant investment from climate foundations in advancing EV work,” the report said.

At the national level, 4% of philanthropy dollars spent on climate change go toward transportation solutions, and most of that is spent on electrification, according to the network. 

In Chicago, transit agency leaders have remained steadfastly opposed to the consolidation plans put forth by key leaders in Springfield. 

One of them was CTA President Dorval Carter, Jr., who announced earlier this month that he will be stepping down from his post at the end of January.

His replacement, current CTA Chief of Staff Nora Leerhsen, did not respond to requests for comment by press time, nor did spokespeople for Pace.

Metra spokesman Michael Gillis said Metra has not advocated a specific course of action or funding source to address the fiscal cliff.

“In general, Metra has favored strengthening the RTA as an alternative to full consolidation,” Metra said in a statement. “While we have not studied the RTA’s proposal in detail, and while there may be areas in which we disagree, the proposal appears to be a solid basis for discussion, and we look forward to working with the RTA, our fellow service boards, Springfield, and all stakeholders on a solution.”

The RTA plan also calls for efficiencies and cost savings in the budgets of the three transit agencies it oversees.

“We estimate that placing key systemwide responsibilities at the RTA along with common sense areas such as joint purchasing, building maintenance and leasing, and reevaluating vacancies, will save $50 million annually,” the RTA’s Smith said. 

Some suburban transit advocates have raised concerns that the consolidation bill would result in a loss of representation for the suburbs. 

“We understand and share concerns about representation and its potential impact on suburban transit services,” Pace spokesperson Maggie Daly Skogsbakken “The current governance structure ensures that suburban communities have direct representation in decisions affecting transit in their areas. Changes that reduce suburban input would undermine Pace’s innovative and responsive approach to prioritizing services and investments that align with the distinct needs of our communities.”