Seventh of a Series: Chicagoland’s Choice – Funding or Politics?

This summer, I have been examining the effects on transit and its riders that we can expect when the federal funding for operations that was enacted as part of the COVID-19 relief effort runs out. That is about to happen to some transit agencies, and it will come relatively soon everywhere.

We have looked at the major providers in the Northeast, except for the MBTA in Boston, and I will report on that agency later in the series. Now, on our way to examining California’s major transit hubs, I will look at the largest concentration of transit in the Midwest: in Chicagoland. The service area at issue includes not only the City of Chicago, which is served by the Chicago Transit Authority (CTA), but also the suburbs on the Illinois side, where Metra trains run. There is other transit: PACE buses in the suburbs and the South Shore Line in northwestern Indiana, but I will concentrate on the CTA and Metra.

In a recent article here in Railway Age, I described Amtrak’s Midwest offerings as “A Network of Unfulfilled Hopes” but noted that corridor trains have done better in Illinois, with its Chicago hub, than elsewhere in the region. The physical hub, Union Station, is not served directly by rail transit; the nearest station on the CTA’s elevated Loop is about three blocks away, on Wells Street. Still, Chicago is a major transit city with eight rail transit lines and eleven Metra lines extending into the Chicagoland suburbs with full service on most of them, although it can be limited outside of peak-commuting times.

RTA Warnings

The Regional Transportation Authority (RTA) is an umbrella agency founded under state auspices in 1974, for the purpose of implementing policies with a more holistic view of region’s transit (CTA, Metra, and PACE) than each component agency could reasonably be expected to take on its own. The RTA issued its first warning about the coming fiscal cliff on Dec. 15, 2022: “Stakeholders and the public have been clear that transit is a valuable asset that needs to be preserved, improved, and expanded. However, the reality of transit systems nationwide is that they have been undervalued and underinvested as public funds have been channeled to roads, parking, and other infrastructure that supports autos more than transit. The transit system now faces the additional instability of a looming operating funding crisis as federal COVID-19 relief dollars are set to run out near the end of 2025. Investment must continue at even greater levels far into the future to make transit more modern, competitive, and reliable.”

The document explained the predicament faced by Chicago’s transit this way: “The federal government, over two administrations of differing political parties, responded and recognized the need for and importance of continued transit operations relief funding in 2020 and 2021. In total, RTA received an allocation of $3.5 billion in federal relief funding to help offset fare revenue losses from declining ridership due to the pandemic. This relief funding combined with RTA sales tax and state funding buoyed the transit system through the darkest early months of the pandemic and continues to support it today. However, we estimate we will hit our fiscal cliff near the end of the 2025, when this federal relief funding is expected to run out.”

The document also warned about conditions that the region’s transit faced, as seen at that time: “Beginning in 2026, the system could face a $730 million annual budget gap assuming current service levels are maintained regionwide. At nearly 20% of the annual expense budget, this gap, if unaddressed, would drastically impact current service and prohibit any additional improvements to the regional system.”

Like other agencies and many advocates, the RTA warned: “Inaction, Service Cuts and Fare Increases are Not Acceptable—Sustainable.” It also contained a feature not found in similar documents from that time: citations to articles in other publications that compared the situations that other transit providers were facing, especially one in Governing Magazine the previous summer. The release also announced a report titled Transit is the Answer, which included a plan for 2023 (found at https://www.rtachicago.org/region/transit-is-the-answer) and also a link to a separate website, www.transitistheanswer.org. The document began with the statement: “The plan vision is safe, reliable, accessible public transportation that connects people to opportunity, advances equity, and combats climate change.” There was an emphasis on funding, including from the Illinois Legislature. The plan was based on three principles: improved accessibility, a climate action plan, and “a transit-friendly communities policy” not that different from what other agencies are doing (or at least proposing), but strong evidence that local officials were concerned about the fiscal cliff as early as the end of 2022.

Slightly less than one year later, on Nov. 27, 2023, RTA released its legislative agenda for 2024: “Historic underfunding of the system has been exacerbated in recent years because of pandemic-induced changes in travel patterns that have resulted in drops in ridership and fare revenues. Beginning in 2026, the RTA system is facing a projected $730 million annual budget gap:” That shortfall would equal roughly 20% of transit’s operating budget. The November report cited an August 24 report that praised California, New York, and Minnesota for steps those states were taking to improve accountability and keep transit going after the COVID relief grants run out. The November 27 release began by reporting: “Since the adoption of Transit is the Answer, the strategic plan for the region’s transit system, the State of Illinois has taken important legislative action to improve transit in the six-county RTA region. A transit package passed last spring included extended relief from the state’s 50 percent farebox recovery ratio requirement for the system, a critical step in making the system less reliant upon fares.”

The RTA’s 2024 legislative agenda (https://transitistheanswer.org/progress/2024-legislative-agenda) called for a $1.5 billion increase in funding for operations, increasing capital funding with an emphasis on PAYGO (Pay as you Go) funding, eliminating the state requirement of a 50% farebox recovery, and expanding free-fare and reduced-fare programs. A means-tested program that allows low-income seniors to ride for free (local seniors could for a while, but not anymore). The proposal also called for governance reforms that would “improve rider experience and regional mobility” (Author’s note: Chicagoans, like everyone else, are allowed to dare to dream). One proposal would implement a regionwide day pass. Day passes are now available on Metra and the CTA, but they are separate.

Some of the proposed changes went beyond the ordinary, such as flexing highway funds toward transit and expanding tolling on highways, for the sake of both transit and the environment. The report stated: “Transit is one of the most sustainable modes of travel, and the system is one of the strongest tools our region has in the fight against climate change. Transit accounts for just 2% of the region’s transportation emissions, while cars and trucks account for 59%. Statewide, Illinois spends more than $4.6 billion annually on highway and road investments compared to $1.3 billion on transit. This disparity continues to increase emissions and further entrenches a car-centric mobility network. Lawmakers should enact policies that continue to drive ridership growth and reduce single-occupancy vehicles on the road, which will reduce regional emissions and congestion.” To gain support among other concerned organizations for its priorities, RTA established the Transit is the Answer Coalition.

To Reform or Not to Reform? That is the Question

While RTA’s proposals sound like a progressive call for reform and funding together, there is some question about whether incumbent transit management would get on board with the plan. On July 12, 2024, Chicago’s Sun-Times ran a commentary by Rich Miller, who also publishes a political newsletter called Capitol Fax. Miller quoted CTA Board Chair Dorval Carter saying to a Senate committee: “The governance model is not the problem here.” Miller used the word “defiantly” in describing Carter’s statement that funding is the problem; apparently meaning that he considered funding to be the only problem. He started by reporting: “A little-noticed bill passed both the Illinois House and Senate that will generate $300 million to $400 million a year for local governments, including $95 million to $127 million for the Regional Transportation Authority.” Senate Bill 3362 would capture more sales tax revenue from retailers who operate out-of-state or ship purchases into Illinois.

Miller noted: “The new money is not quite one-fifth of the $730 million ‘fiscal cliff’ that northeastern Illinois’ mass transit agencies are facing starting next fiscal year, but it’s a decent start. A down payment, so to speak. But remember, the $730 million deficit is only for fiscal year 2026. It will rise to $1.2 billion by fiscal year 2031, according to the Chicago Metropolitan Agency for Planning.” However, he also noted: “Even so, not one Chicago-area transit official mentioned that new money in their testimony to the Senate Transportation Committee last week. Instead, most of them simply demanded lots more money and refused to consider any sort of structural management reforms.”

Miller is far from alone in expressing concern about transit’s future in and around Chicago if reforms are not implemented. Local rider-advocates have been expressing concern for years; perhaps for decades, about the lack of transparency at the transit agencies and the lack of consideration of input from riders when making decisions. Metra seems to be improving in that department, but not the CTA.

Elected Officials, Rider-Advocates Sound Warnings

One of the advocates who is concerned about the fiscal cliff is Steven P. Hastalis, a CTA retiree. He noted that the RTA is removed from the daily operations of CTA and Metra, and that Metra officials have not stressed the coming threat as much as RTA officials. Hastalis advocates for riders with disabilities, including his past efforts on the ADA (Americans with Disabilities Act) Advisory Committees at CTA and Metra. He told Railway Age that blind people and other non-motorists do their best to move to neighborhoods where transit is strong, and that they will suffer when the federal funds that can be used for operations runs out, causing an operating shortfall sufficient to require severe service cuts.

Railway Age contributor and longtime Chicago advocate F.K. Plous sees the November election as the event that will determine whether there will be more federal funding to keep transit going when the COVID-19 relief money runs out. He expects that, if the Harris-Walz ticket wins and Democrats control at least one house of Congress, transit will be spared. If the Trump-Vance ticket wins and Republicans do sufficiently well in Congress, the outcome for transit will be dire. He also said that elected officials should require reform and improved accountability from transit agency officials, both to improve service for riders and to improve operations.

Plous gave an example: “They’re trying to reach a population in a housing project called Altgeld Gardens near 130^th Street. You can reach that same population on the South Shore Railroad, south of 115^th Street, with Metra trains. If they were to build a station there, they could serve most of the population they are attempting to reach with a $2 billion CTA extension, which would not be needed. That sort of accountability and cooperation would be very helpful.” He added that a more-intensive project review should have been conducted.

It is not only riders and their advocates who are concerned as the fiscal cliff approaches. So are elected officials. On Dec. 26, 2022, the Sun-Times ran an op-ed by U.S. Rep. Raja Krishnamoorthi and State Sen. Ram Villivalam that bore the headline Public Transit will fall off a fiscal cliff without a plan for 2025. They noted that ridership at the time was only 53% of pre-pandemic levels and began their commentary by saying: “The Chicago region’s trains and buses are headed straight toward a funding cliff, but there’s still time to avoid disaster if we are willing to change course and work together.”

In his own commentary about Carter’s call for funding without any requirement for reform, Miller placed himself on track with other reform advocates. He gave an example: “Those structural reforms are very much needed. Just a few years ago, the CTA and former Chicago Mayor Lori Lightfoot tried to stop a pilot project to cut South Side Metra fares to CTA levels and increase train service on the South Side and south suburbs as well as increase the frequency of some PACE bus service.”

He then asked a question that was probably on the minds of many Chicagoans who cared about how their government and its agencies work: “Why were they opposed to something that would help people? The CTA believed the proposal would reduce its revenues. So, once the pilot project got off the ground, the CTA refused to provide low-cost transfers between the lines and prevented riders from using their CTA Ventra cards for Metra fares. These interagency fights have gone on forever. And while there has been a little progress in cooperation among the CTA, Metra and Pace, it’s mostly because the transit bosses know they must make a decent show because that horrific fiscal cliff is staring them in the face. If they get the money, they simply cannot be trusted to not revert to their old ways.”

Even if it becomes law, S-3362 would not help much toward to goal of filling the $730 million budget gap for 2026 or anything like it during future years. As a standalone funding source, it would provide roughly 13% to 17% of the amount of the projected 2026 shortfall, about one sixth, or slightly less.

It Boils Down to Politics

So does everything else in the world of transit (as well as Amtrak in the U.S. and VIA Rail in Canada), but this is my first report on the potential trials and tribulations that could befall a major transit system since both parties settled on their nominees for President and Vice President. In places where the operating shortfall that would result when the federal COVID-19 relief funding ran out already or will run out within the year, transit providers who serve those places could not afford the luxury of waiting for the election, in the hope that officeholders would come up with funding to save their systems.

Chicago’s system is different, with COVID money keeping operations going until late 2025 or early 2026. With a new Administration taking office this January, there would be time to move a bill in Congress next year for more spending that would keep transit providers like the ones in Chicago operating at reasonable service levels. Such a bill could also require accountability, transparency and cooperation on the part of transit leadership, which has also been recommended in this article.

I don’t know how the election will come out, so I don’t know how transit will do, especially if transit officials do not have the opportunity to meet with local political and business leaders in an effort to keep the trains and other transit going as long as possible.

In Chicago, we know that riders and transit employees must always navigate a difficult and tricky political system, to keep the trains moving. Chicago is often like that. Opposing the advocates’ argument is the head of the CTA, who has called for more money from the legislature, but without conceding the need for reform by the transit providers. Either politics as usual will continue to be practiced in Chicago and the rest of Illinois, or a change will give providers the mandate and autonomy they need to run the system properly, whether they would actually be interested in doing that.

There has also been talk at the legislative level of merging the four “service boards”: CTA, Metra, PACE, and RTA itself, and replacing them with the Metropolitan Mobility Authority, a larger agency that would combine all of them into a single entity. Would such a reorganization improve transit and implement a means for getting through the post-COVID era, for the benefit of both the transit and the city at large? That does not seem likely, as it would be difficult under current conditions to add transit, especially rail transit, to the Chicago mobility mix, and to find the money for doing so.

Old habits can become ingrained in a place like Chicago, and that can include old political habits. I cited the example of an agency head who calls for funding without accepting any sort of reform. That raises the question of whether Chicagoland’s elected officials would be willing to agree to require reform, even if the long-time utility and sustainability of their agencies is at stake. One advantage that everyone concerned seems to have in Chicago, compared to such places as Washington, D.C., New York and New Jersey, is that there is some time left before results could become catastrophic, both for the present and future rail lines, but also for the present and future riders.

The transit system in the San Francisco Bay area is one of the last such systems in North America with a diversified set of modes, operated by several providers. These include heritage-style streetcars, and San Francisco’s unique cable cars. Transit in and near the City by the Bay was hard-hit during the COVID pandemic, with difficulties that included severe service cuts on both the bus and rail sides.

I will look into the situation in the Bay Area in the next report in this series.

David Peter Alan is one of North America’s most experienced transit users and advocates, having ridden every rail transit line in the U.S., and most Canadian systems. He has also ridden the entire Amtrak and VIA Rail network. His advocacy on the national scene focuses on the Rail Users’ Network (RUN), where he has been a Board member since 2005. Locally in New Jersey, he served as Chair of the Lackawanna Coalition for 21 years and remains a member. He is also a member of NJ Transit’s Senior Citizens and Disabled Residents Transportation Advisory Committee (SCDRTAC). When not writing or traveling, he practices law in the fields of Intellectual Property (Patents, Trademarks and Copyright) and business law. Opinions expressed here are his own.