The transit agencies serving Chicagoland reported a critical budget shortfall in a meeting this week, initiating the planning process for next year’s budget which includes potential significant service cuts and layoffs.
This predicament stems from a prolonged struggle for funding between public transit officials and state lawmakers.
Federal COVID-19 relief funds for public transportation agencies are scheduled to vanish by 2026, leaving agencies in a precarious position despite the temporary financial cushion provided by those funds.
Concurrent with this financial uncertainty, ridership on buses and trains continues to lag behind pre-pandemic levels, exacerbating the problem for transit operators.
In a stark revelation, officials indicated that together, the transit agencies of northern Illinois are grappling with an annual budget gap of $771 million, compounded by the state legislature’s failure to pass necessary funding reform legislation by the critical May 31 deadline.
House Speaker Emanuel ‘Chris’ Welch expressed confidence that the situation could still be addressed, but transit officials articulated an urgent need for action.
Tom Kotarac, a member of the Regional Transportation Authority (RTA) board, emphasized the gravity of the situation, stating, ‘We have told everyone they needed to act by May 31st or else.
We are in the ‘or else’ phase.’
As a response to this mounting fiscal pressure, RTA officials proposed a dual budgeting strategy.
One budget would assume the budget gap is filled, enabling agencies to proceed with plans brainstormed in the previous year.
However, RTA government affairs director Rob Nash clarified the legal constraints necessitating caution, stating, ‘But we cannot operate on assumptions and pledges of good faith and promises. We just can’t, legally.’
In light of the slim likelihood of new funding from the state, the RTA board has tasked the transit agencies it oversees—including the Chicago Transit Authority (CTA), Metra commuter rail, and Pace Suburban Bus—with drafting budgets that reflect a 20% reduction in their anticipated funding.
Officials have dubbed this reduction scenario as the ‘doomsday’ budget proposal.
RTA Chief Financial Officer Kevin Bueso elaborated on the severity of these potential cuts, describing them as ‘catastrophic.’
The CTA’s acting President, Nora Leerhsen, echoed this sober outlook, declaring the situation ‘difficult to digest for all of us.’
Both budget plans contemplate fare hikes for 2026 and administrative efficiencies to cut costs in 2025.
To efficiently manage the impending financial uncertainty, the RTA plans to establish an ad hoc task force targeting budget cuts through the unusual fiscal year process ahead.
This budgetary austerity is not merely symbolic; state law mandates that the RTA must communicate expected revenue to service boards by September 15 each year, compelling them to develop budgets accordingly.
Following that, the oversight agency issues preliminary funding amounts for transit planners to utilize in July, which is crucial for future planning.
Leerhsen stated that the CTA intends to maintain its current service plan for 2025 but will conduct public hearings over the summer and into the fall to gauge the impact of looming budget constraints.
The September 15 deadline arrives just weeks before the General Assembly’s fall session commences, the earliest lawmakers are scheduled to convene.
Nevertheless, transit officials contend that even the best-case scenario—legislative action in October—is likely too late to prevent the painful fallout from the initial funding miss.
Leanne Redden, Executive Director of the RTA, advised caution, stating, ‘I don’t want to give anyone false hope that there is still any way to avoid some of these negative impacts.
The negative impacts are here, and now we’re going to have to all work together to mitigate the worst of those impacts for as long as possible while the legislature continues to do their work.’
The anticipated delays mean that even if lawmakers generate a new source of funding, it may not reach transit agencies until the next summer due to implementation hurdles.
Such delays pose significant consequences for the transit systems and their users.
Nash indicated that regardless of legislative actions, challenges are expected in the early part of 2026.
Several proposals emerged in Springfield over the past year aimed at addressing the financial struggles of Chicagoland transit operators.
Notably, two significant proposals arose from a coalition of environmental supporters and labor unions.
In a joint statement, the Illinois Clean Jobs Coalition and Labor Alliance for Public Transportation responded to the RTA’s recent meeting, asserting the dire consequences of legislative inaction and urging lawmakers to convene in the summer to address urgent transit issues.
‘We cannot wait any longer—the General Assembly needs to avert further disaster and address the transit fiscal cliff with reforms and dedicated revenue, while working with existing agencies to ensure that we are investing in the future of our transit systems. The time to act is now,’ the groups declared.
Despite various proposals, no legislation garnered sufficient support during the spring legislative session.
However, one bill advanced through the Senate during the last hours of the session, proposing reforms widely accepted yet not unanimously endorsed.
Discontent primarily rooted in its funding mechanism, which included a contentious provision imposing a $1.50 tax on package deliveries—with exemptions for grocery and medicine deliveries—prompted strong backlash from influential business interest groups.
Organizations such as TechNet, Uber, and several retail industry groups promptly opposed the measure.
Ultimately, this contentious bill did not progress within the House, nor were similar funding proposals introduced.
Paula Worthington, an economist and senior lecturer at the University of Chicago, commented on the complexities of imposing new taxes like the delivery fee, indicating that it poses significant procedural and legal hurdles.
She underscored the necessity for a balanced funding strategy, pointing to other states that successfully implemented transportation funding through shared burdens such as commuter transportation taxes or taxes on road users.
As conversations continue to unfold, Worthington stressed the importance of engaging the public in discussions regarding financing transit solutions in Illinois.
The unfolding crisis highlights critical uncertainties for transit operators and riders alike in the wake of stagnating funding discussions.
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