SPRINGFIELD – With public transit agencies in Chicagoland facing a fiscal cliff and the potential for thousands of layoffs, the state did not pass a bill that would have provided the agencies with potentially over $1 billion in new funding.
A version of the bill passed in the Senate, sponsored by Sen. Ram Villivalam, D-Chicago. But the House adjourned early Sunday morning without concurring as some of its tax hikes became too controversial. Now, the future of Chicagoland transit is in limbo as the bill awaits further action.
The Regional Transportation Authority — which oversees the Chicago Transit Authority, Metra commuter rail and Pace Suburban Bus — projects a $771 million annual operating budget shortfall.
At a hearing in the days leading up to adjournment, Amalgamated Transit Union political director Clem Balanoff told lawmakers that thousands of union bus drivers and train operators would be laid off if action wasn’t taken to fill the budget gap. RTA officials have estimated 40% service cuts are necessary to address the fiscal crisis.
Gov. JB Pritzker on Sunday said there is “significant work” left to address Chicagoland transit funding over the summer and into the fall.
“The fact is that we need to address transit funding as fast as possible,” Pritzker said.
The Senate’s proposal to do so included statewide taxes on deliveries and electric vehicle charging, as well as expanding taxes on rideshares and expanded certain Chicago taxes to the rest of Cook County and surrounding counties.
RTA and its subsidiary transit agencies will create their budgets for the upcoming fiscal year in the coming weeks. According to RTA spokesperson Tina Fassett Smith in a statement, those budgets “by law must only include funding we are confident the system will receive in 2026.”
“We think there’s probably a billion dollars for mass transit in there,” RTA Board Chairman Kirk Dillard said shortly after the Senate passed its transit bill late Saturday night.
Now, Dillard and other transit officials are going to work to minimize or avoid cuts.
“It’s clear that many in both the House and Senate support transit and our intention is to build on that shared support to identify the funding needed to avoid devastating cuts and disruption for everyone in Northeast Illinois,” Smith said in a statement.
The senate’s solution
House Bill 3438, the proposal approved by the Senate, would bail out transit authorities and send some funding outside northern Illinois. The reform package includes multiple tax increases. It’s unclear if any of these increases could come up again in future attempts to reform transit, although the House could pass it at a special legislative session or at a a future regular session.
The most controversial tax increase was a $1.50 fee added to any home delivery order placed online, with exceptions for some small businesses as well as orders containing only groceries and medication. Of the funds raised from this statewide tax, 80% would go to northern Illinois transit systems under a renamed RTA and 20% would be put into a fund for downstate transit agencies.
The bill would have also instituted a tax on real estate transfers in Cook County and the counties surrounding it. That tax is similar to one already in place in Chicago. It would have also required a charge on taxi and rideshare services in that region and a statewide 3 cents-per-kilowatt hour fee for charging electric vehicles.
“All told, we have achieved with the Senate package, a $1.5 billion investment for the northeast Illinois region,” Villivalam said. “And we have received more than double what downstate transit agencies requested for a historic investment.”
Over the two years that lawmakers have worked with the RTA on this transit funding issue, Democratic lawmakers have consistently repeated their mantra: there would be no funding without reform. To that end, they sought to institute sweeping reforms to the RTA.
Read more: Lawmakers offer 2 incomplete pitches for public transit and funding reform
The bill would rename the RTA to the Northern Illinois Transit Authority. The agency would have ultimate control over fares as well as a restructured board that places more power in the hands of the state.
While the bill will not become law soon, similar governance reforms were proposed by House lawmakers, who indicated there was agreement between the Senate and House on the reforms likely to be included in any deal.
Even still, those reform proposals drew fierce criticism from some suburban lawmakers
“This has become a bailout for Chicago CTA,” Sen. Seth Lewis, R- Bartlett, said. “We’re giving the mayor more control. We’re giving him more than a billion dollars in revenue.”
The board, under the Senate bill passed Saturday, would have five members appointed by the governor, five appointed by the president of the Cook County Board, five from the mayor of Chicago and one each from the collar counties.
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