Chicago Transit Authority and other agencies face $770 million annual funding gap
By ANDREW ADAMS
& BEN SZALINSKI
Capitol News Illinois
news@capitolnewsillinois.com
SPRINGFIELD — With two days left in the legislative session, lawmakers in Springfield announced a pair of plans for how to reform Chicagoland transit agencies after two years of debate, one of which would come with a spate of new taxes.
The proposals give new power to the agency that oversees the Chicago Transit Authority, Metra commuter rail and Pace Suburban Bus. The newly renamed Northern Illinois Transit Authority would have sweeping authority to set policies for the Chicagoland transit agencies, which together serve about two-thirds of the state’s residents.
Under House Bill 3438 originating in the Senate, NITA and the state would impose new taxes in northern Illinois, higher tolls on highways, fees on rideshare services and a new tax on electric vehicle charging. Senate Bill 2111 originating in the House does not address funding.
But the bills are not done. Lawmakers in both chambers say the proposals require additional work, which must happen quickly as lawmakers are scheduled to adjourn for the summer on Saturday, May 31.
“The goal is that we’re going to align both bills,” House bill sponsor Rep. Eva-Dina Delgado, D-Chicago, said.
Despite a long process of negotiation, several important groups still oppose the bills, including representatives of organized labor, the suburbs and lawmakers concerned the plan disproportionately benefits Chicago and its residents.
“This is a billion-dollar bailout for Mayor Brandon Johnson being paid for by suburban taxpayers without giving them a real voice,” Sen. Don DeWitte, R-St. Charles, said in a committee hearing on the Senate proposal. “It’s a simple math problem. Chicago and Cook County get the majority of the board votes. Suburbs are outvoted on just about everything — fares, service, cuts, tax increases; that’s not reform. That’s a takeover.”
Funding remains an open question
The legislature began working on transit reform more than two years ago facing post-pandemic ridership slumps. Transit officials from the Regional Transportation Authority and other agencies have calculated that they face a $771 million annual budget shortfall beginning in 2026.
Since then, the Regional Transportation Authority has said that without state help, transit agencies would have to make a 40% reduction in service when pandemic relief funds run dry.
The plan by Sen. Ram Villivalam, D-Chicago, in the Senate would raise at least enough money to plug the hole, although exactly how much remains unclear.
Suburban residents would see several new taxes to fund transit that Chicago residents already pay, among other proposals to raise revenue:
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Rep. Eva-Dina Delgado, D-Chicago, discusses a bill at a House Executive Committee hearing on May 29, 2025. (Capitol News Illinois photo by Andrew Adams)
A tax on real estate transfers in the city would be extended to the rest of Cook County and the collar counties, costing buyers and sellers of real estate $3 in taxes for every $1,000 of the transaction. Funds generated from the tax in the collar counties would go toward transit supportive developments while half the funds from suburban Cook County would go toward the CTA pensions.
- The suburbs also would be subjected to a 10% tax on rideshares.
- Counties would no longer get to keep a portion of the transit sales tax for their own infrastructure projects. Instead, it would be redirected to NITA.
- Anyone traveling on Illinois tollways, which are mostly located in the suburbs, would also have to pay an additional 50 cents per toll, with the money going toward funding public transportation.
- Electric vehicle drivers would also have to pay a tax to charge their vehicles. Drivers would be charged 6 cents per kilowatt hour at public charging stations in 2026, with the tax increasing based on inflation each year after that.
While supporting the bill, Illinois Environmental Council Legislative Director Dany Robles said he’s concerned the tax will discourage using EVs in low-income communities.
The taxes represent “shared sacrifices,” Villivalam said.
The bill introduced in the House has no new mechanism for funding but does lay out limited reforms to the agencies’ fiscal systems.
Both bills lower the “farebox recovery ratio,” the proportion of money that must come from fares. Until the pandemic, agencies in Chicagoland had to make 50% of their revenue from fares. This provision in the law has been suspended since the onset of the pandemic.
The House plan would lower that portion 25% until 2029, then further lowered to 20%. The Senate version would keep it set at 25%, Villivalam said.
The legislation would also formalize free and reduced fare programs, many of which are already in place. These include free fare programs for military personnel, seniors, people with disabilities, and some low-income people.
Organized labor, municipal opposition
The bills drew immediate opposition from several important groups in Springfield, including leaders of organized labor. In a House committee Thursday morning, AFL-CIO President Tim Drea said the House version’s lack of a funding mechanism was a concern.
“We want reforms and funding to go hand in hand,” Drea said, noting that his organization is also opposed to the Senate’s specific funding proposals.
Many representatives of organized labor were also unhappy with the revenue-raising mechanisms proposed in the Senate.
Tim Drea, head of the Illinois AFL-CIO, discusses his opposition to a plan overhauling transit in northern Illinois on May 29, 2025. (Capitol News Illinois photo by Andrew Adams)
Marc Poulos, executive director of Local 150, said many of the tax increases were unacceptable. He argued tollway revenue is supposed to be dedicated to road improvements and deviating from that could violate the tollway’s bond agreements.
“This proposal is inequitable, as urban drivers would effectively subsidize urban transit systems such as the CTA,” Poulos told a Senate committee.
Cities and towns in northern Illinois also opposed the legislation.
The city of Chicago opposes a provision limiting the ability for the Chicago Transit Authority to take on debt at a time they’re working on several major infrastructure projects, according to Illinois Municipal Leage President Brad Cole, who represents Chicago and other Illinois municipalities at the Statehouse. Cole said suburban cities and towns also had “significant concerns” about the board of the new authority. Will County Executive Jennifer Bertino-Tarrant said redirecting a portion of the existing transit sales tax away from counties would create a $38 million budget hole in Will County.
“This bill, the form before us today, doesn’t fix transit,” Bertino-Tarrant said. “Instead, it takes away the ability for county and local government to provide services. We agree that we need public safety reform. We agree that we need more accountability, but stripping counties – and I’m here speaking for all the counties today – (of) the dedicated sales tax as part of the last RTA agreement will cripple government.”
Sweeping oversight power
Under both plans, the empowered oversight agency, NITA, also has broad new powers to control transit planning and policy in Chicagoland.
NITA would have “sole authority” to set fares and to “establish the nature and standards of public transit” in the region. This is a break from the current system, which grants more power to individual transit agencies.
The bill also requires NITA to implement an “integrated fare” system so transit riders can use one payment system for all Chicagoland transit systems and transfer more easily between systems.
Kirk Dillard, chair of the Regional Transportation Authority board, watches the crowd at a May 29 committee hearing discussing a bill that would rename – and fundamentally change – the organization he runs. (Capitol News Illinois photo by Andrew Adams)
NITA would also be empowered to set “service standards,” meaning NITA would be responsible for frequency, wait times, vehicle types, stop spacing along transit routes, amenities at stops and on vehicles, some route planning and the coverage area for transit services.
On top of that, the bill opens the door for NITA to add new transit services, such as streetcars, light rail and bus rapid transit.
Governance, a recurring issue over the years this bill has been negotiated, would also be upended. While the RTA board had 16 members, the new NITA board would have 20 members. The new board would have five members appointed by the governor, the mayor of Chicago and the president of Cook County Board of Commissioners. The five remaining members will come from the five “collar counties” surrounding Cook County.
The expanded board also has firing power for the heads of Pace, Metra and the CTA. This follows years of criticism of former CTA President Dorval Carter, who stepped down in January.
NITA would also have new authority to take on real estate development projects near train stations and bus stops.
Expanding police on transit
One of the top priorities for Chicagoland transit in Springfield has been to increase “safety” on trains and buses. During the pandemic, the crime rate on CTA trains and buses spiked. While it remains slightly above pre-pandemic averages, that has fallen as more people return to taking public transit.
Under the new bill, several councils, task forces and other bodies would be created to try and identify ways to make transit safer.
NITA would have one year to approve a “sworn law enforcement officer crime prevention program,” which would outline how the agency will use police officers to prevent and address crime on transit.
It would follow months of work with Chicago police, county sheriffs, the state police and other law enforcement agencies looking into the subject and making recommendations.
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