Lawmakers ‘ready to move’ on transit reform, but funding agreement remains elusive

A Chicago Transit Authority bus leaves a stop on the city’s North Side. (Capitol News Illinois photo by Andrew Adams)

SPRINGFIELD — Illinois lawmakers will return to Springfield next week hoping to resolve a major unchecked box from the spring: Keep the trains in Chicago running.

As the spring legislative session concluded, lawmakers were anticipating a $771 million shortfall for Chicagoland transit agencies beginning next calendar year. But just last week, as lawmakers readied to return to the Capitol for a two-week fall session beginning Tuesday, Oct. 14, the Regional Transportation Authority released a report saying they now anticipate the 2026 deficit to be just $202 million.

While that estimate theoretically gives lawmakers more breathing room, many say they’re ready to put the issue to rest and provide transit agencies and riders certainty that service won’t be slashed next year.

“The cliff is coming,” Rep. Eva-Dina Delgado, D-Chicago, the House Democrat leading transit reform, told Capitol News Illinois. “It’s coming either in July or maybe it’s coming in October for Metra, and maybe it’s coming in (20)27 for Pace. But it’s coming. And I just think that we’re at a point right now where we’re ready to move.”

Stakeholders still have to agree on two major facets: a funding source and governance changes. While there is more agreement among stakeholders on reforms than funding, it’s unlikely lawmakers will move one without the other.

“The reforms are easy to vote for,” Illinois AFL-CIO President Tim Drea told Capitol News Illinois. “The funding is not. So, if people are going to stand up and say, ‘I support public transit,’ they have to support it 100%, not just a little bit.”

The General Assembly failed to advance a reform and funding plan before they adjourned at the end of May. While the Senate approved a plan that included a controversial per-package delivery fee, the House didn’t consider it before adjourning the summer.

Read more: Legislative leaders discuss next steps for failed transit reform push

Stakeholders noted urgency is heightened by other upcoming potential funding issues, such as the federal government’s dialing back of Supplemental Nutrition Assistance Program and Medicaid funding.

“With those discussions going on, if we could get transportation solved in the veto session, we think that the state would be much better off,” Drea said.

Latest shortfall estimate

The impending deficits are driven by the fact that COVID-19 pandemic-era aid programs will be fully depleted by 2027.

“We have stretched our federal COVID relief dollars to last longer than almost any system in the nation,” RTA Chair Kirk Dillard said in a statement. “Independent agencies rank the RTA system as the most efficient in the country. The responsibility now lies with Springfield.”

RTA’s latest estimate projects that the deficit will reach $789 million in 2027 and $888 million in 2028.

RTA claimed during a meeting last week that the new estimate was driven by better-than-expected sales tax revenue. That was the result of a new law taxing online purchases shipped to Illinois from other states and a $74 million fund transfer from Metra and Pace to the Chicago Transit Authority. The CTA now anticipates that it won’t reach a funding shortfall until the middle of next year, meaning lawmakers don’t have to pass new reform this month.

Some have criticized the timing of RTA’s latest estimate, arguing it downplays the urgency to pass reform.

“I’m glad cost controls and stronger receipts helped — but a shift that big, that fast, is exactly why we need guardrails, transparency, and real reform,” Rep. Kam Buckner, D-Chicago, said in a statement.

Still, the latest estimates theoretically buy lawmakers time. According to the RTA, the CTA would run out of funding in the middle of 2026, followed by Metra near the end of the year and Pace in 2027.

But the RTA is slated to adopt its 2026 budget in December, meaning it will have to include contingency plans such as fare hikes if the state doesn’t provide more funding. The CTA would also institute a hiring freeze in the first quarter of 2026 and layoffs would begin in the third quarter.

Read more: Public transit agencies begin planning for ‘doomsday’ funding scenario

Pennsylvania is offering Illinois lawmakers a preview of what would happen if they don’t address the cliff. Pennsylvania’s legislature has been locked in a budget impasse for months and hasn’t been able to agree to transit reform, leading Philadelphia’s transit agency to make major service cuts. Delgado said Pennsylvania’s situation “is giving a lot of clarity” to Illinois lawmakers “about what we don’t want to do.”

Read more: States scramble to plug transportation funding holes

How to close the funding gap

Delgado said lawmakers are on the “2-yard line,” but she declined to rule out any specific taxes from the final product.

“When I think about revenue for transit, I want it to be sustainable,” she said. “I want it to be something that’s related to transportation, and I want it to be something that grows over time.”

Read more: Senate’s transit funding, delivery tax proposal stalls in House

The plan passed by the Senate in May but not the House included a $1.50 fee on online home delivery orders across the state, a tax on real estate transfers in Cook County and the surrounding counties, a tax on taxi and rideshare services, and a statewide 3 cents-per-kilowatt hour charge for charging electric vehicles. It added up to $1.5 billion of new revenue that advocates say is necessary to not just fix the funding problem but improve the system.

Delgado didn’t give specifics, but she said lawmakers are looking at “all the different ways that you can slice and dice those revenues” to fund the system.

Labor unions are adamantly opposed to using money from the state’s road fund that pays for transportation capital projects or raising tolls to pay for public transit. Other than that, they are generally open to most other ideas.

“We know that (funding transit) would be very, very difficult to do with any one source, so we’re very supportive of a lot of the sources out there on the table,” Drea said.

Delgado said preserving free, reduced-fare and paratransit rides is also a major priority and added it is a key sticking point in negotiations over funding.

Rep. Brad Stephens, R-Rosemont, told Capitol News Illinois lawmakers need to first address the initial cliff before imagining ways to use new funding.

Another cause for urgency is the time it takes for the state to implement and collect a new tax. If lawmakers wait too long, new taxation measures might not be up and running by the time the cliff arrives.

Bipartisan talks

Stephens is the only Republican who participates in the House Democrats’ working group on public transportation reform.

“I’m just trying to be open-minded while being Republican and not necessarily being in favor of tax increases,” Stephens said. “But without the transit mechanisms to get people to work, those businesses are going to have troubles as well.”

Chicago’s transit agencies aren’t the only ones in Illinois facing financial troubles. Downstate agencies are also running short on money as their sales tax-based funding formula becomes less lucrative.

Read more: It’s not just Chicago. Downstate public transit agencies face funding challenges

The state covers up to 65% of operating expenses for all downstate transit agencies. But because of rising costs and lackluster economic growth in downstate communities that hinder sales tax revenue, funding shortfalls are growing. Combined with slower property tax growth outside the Chicago area, those economic factors make it hard for local governments to cover 35% of public transportation costs.

“I think that that’s important in crafting the piece of legislation to make sure that all of those transit agencies are involved in the process and that there’s something in it for everybody,” Stephens said. “Again, maybe not everybody is going to get 100% of what they’re looking for.”

Delgado said she hopes to get bipartisan support on the final bill, which she said will include reforms for downstate agencies, many of which are in Republican districts.

“Transit is not a partisan issue,” she said. “It affects people regardless of what ballot you pull.”

Stephens said more suburban representation on a new governing board and guardrails on how revenue will be used will be necessary to get GOP support for the bill.

Changing to the governing system  

Democrats are largely in agreement about how to reform the governing structure of the systems. While it’s not finalized, sources said the plan would be similar to what the Senate passed in May.

The bill would rename the RTA the Northern Illinois Transit Authority, which would have total control over fares. The board would include five members appointed by the governor, five by the president of the Cook County Board, five by the mayor of Chicago and one person each from Lake, McHenry, Kane, DuPage and Will counties.

Many suburban leaders and legislators say they are worried the plan dilutes suburban representation in favor of Chicago.

“We don’t want to make this a Chicago versus the suburbs issue, but we’ve also got to make sure that there’s safeguard to make sure that Chicago doesn’t control all of the revenue, the new revenue,” said Stephens, who is also the mayor of Rosemont and the only Republican lawmaker whose district includes part of Chicago. “We’ve got issues in the suburbs as well, so we need to make sure we address that.”

But Democrats argue the governor’s appointees won’t necessarily come from the city and the board’s voting thresholds will ensure a block of Chicago- and Cook County-appointed board members can’t unilaterally make decisions.

“I think that the leaders who are making these appointments are going to have a very regional perspective,” Delgado said. “They’re going to want to have people that take all of the interests of the region into account before making any decisions.”

There is also broad agreement about addressing public safety problems. Delgado said lawmakers are looking at creating a law enforcement task force and the future NITA board will be able to decide the best approach to public safety. Some groups have proposed creating a new police force that would focus on public transportation.

“That’s one of the reasons why we need additional funding more than what the fiscal cliff stands for,” Drea said. “But if we get that, people will return” to riding the system.

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation. 

Lawmakers ‘ready to move’ on transit reform, but funding agreement remains elusive by Ben Szalinski