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Chicago Mass-Transit-Geddon. This fall, it's part of the Marvel Comic Universe.

Ridership on the CTA has dropped by about 50% and? It's not coming back. People prefer to work remotely (at least a portion of the time) and increasingly prefer the suburbs to avoid crime, taxes blah blah.

Meanwhile the CTA is generating a $730 million annual lose. Ouch!

Proposed recommendations for the future of public transit are already being met with pushback

By Sarah Freishtat

Chicago Tribune

Published: Sep 11, 2023

A sweeping set of recommendations about what Chicago-area transit could look like in the future is making its way to lawmakers, with regional planners eying new sources of funding for the CTA, Metra and Pace and raising the prospect of consolidating them into one agency.

But already, influential business groups have raised concerns about some of the proposed recommendations, pushing back on a concept to expand the sales tax base and questioning whether instead of seeking to enhance transit, the planners should focus instead on the reality of still-diminished ridership. Leaders of suburban counties have also reacted to the proposals, laying out their views for suburban representation on transit boards and pushing back against any use of motor fuel taxes for transit.

“I’m not sure the report’s grounded in reality,” said Mark Denzler, president and CEO of the Illinois Manufacturers’ Association, who was part of a committee advising on the proposals.

The recommendations remain preliminary and will need to go through at least two rounds of review by Chicago Metropolitan Agency for Planning board members before they are sent to the governor and lawmakers by Jan. 1. Lawmakers will then decide how to proceed.

But the early pushback offers a glimpse of the issues likely to come to the forefront as the Chicago area’s three public transit agencies face a looming $730 million budget hole once federal COVID-19 relief funding runs out in the coming years, and regional ridership that, in 2022, was half of what it was pre-pandemic.

“To solve this very significant problem for the region, business and labor, along with all the transit advocates, have to be at the table,” said Julie Hamos, who is part of the committee advising CMAP on the proposals and a former state representative who spearheaded efforts to get an overhaul of transit funding passed in 2008. “And I hope that the legislature will begin to work on this early enough so that it does not become a serious crisis like the last time, threatening all kinds of service cuts. Which will only manage to scare off riders along with those who want to continue to present this as a strong region.”

In an early step to address the problem, CMAP was tasked by lawmakers with preparing a report to the legislature about how to solve transit’s impending challenges. Ideas proposed included improvements to the bus system, adding “transit ambassadors” to boost safety and moving to one fare system across all types of public transit, instead of maintaining largely separate fares for the CTA, Metra and Pace.

CMAP is set to recommend two different sets of proposals with two different price tags. One calls for $1 billion in new public funding, and the other $1.5 billion. Both also call for the transit agencies to generate another $200 million through fares or savings.

The new money could include increased funding for existing free, reduced-fare and paratransit programs, raising regular fares and expanding programs to keep fares affordable for low-income riders and youth.

A key idea includes expanding the sales tax so that it applies to some types of services — though CMAP has said it wouldn’t suggest taxing housing, utilities or health care — and potentially also raising the rate that goes to Chicago-area transit, though that could be paired with lowering the rate in the rest of the state. Also under consideration are driver fees, like a surcharge on vehicle registration costs.

The service and funding changes would likely be paired with recommendations to change the way transit is overseen in the region. Currently, the CTA, Metra and Pace are each operated by a separate agency, and the Regional Transportation Authority coordinates financing.

The recommendations could include simply strengthening the RTA and keeping the separate agencies, or folding the three transit agencies into one regional entity, an idea that has been floated before but never gained traction.

An Aug. 7 letter signed by the leaders of Cook, DuPage, Lake, Kane, Will and McHenry counties expressed support for consolidating the region’s transit agencies and giving more control to elected officials from the suburban counties. They called for a regional coordinator for services like paratransit, on-demand rides and ride share.

“Because of the vast differences in funding, operating and capital needs, service and market niches, the region must consider the case for stronger suburban transit governance models with representatives comprised of county stakeholders,” they wrote.

The suburban county leaders also expressed concern about sending motor fuel tax money to transit — CMAP is floating a surcharge for transit as an immediate, and potentially short-lived, measure — saying road agencies are also likely to face financial challenges as more electric vehicles hit the streets and motor fuel taxes dry up.

Rather than relying on new sources of funding alone, regional transit agencies should also consider “operational savings,” they said. Any new sources of funding should be accompanied by service enhancements.

DuPage County Board Chairwoman Deborah Conroy said in a statement that a reliable, accessible transportation system was key to the county.

“DuPage County has high employment numbers, but we also have low transit availability,” she said. “I believe there is a need and a demand for reimagining the existing transit system and creating a strong system that best serves DuPage County and the region.”

Denzler, from the IMA, said the recommendations should take into account that ridership remains down, and isn’t expected to return to pre-pandemic levels for years. He would have liked to see recommendations around so-called first-mile and last-mile programs, which seek to fill the gap for the last stretch of commute between a rider’s workplace and the end of the transit route.

Any expansion of sales taxes for use by transit would be a heavy lift in Springfield. Should the sales tax base be expanded, other programs and agencies are looking to use the new revenue to fill their own budget holes, Denzler said.

“How do you really make the system more efficient?” he said. “How do you really make it work for what the needs are, as opposed to, ‘we’re going to build a brand-new shiny system.’”

Chicagoland Chamber of Commerce President and CEO Jack Lavin, who was also part of the group that advised CMAP, called for reform of the three transit agencies, a deeper look at what kind of fares current demand will support, and examining possible cost savings by the agencies before turning to new sources of public funding for transit. Pension payments pose a significant cost, and should also be studied, he said.

The chamber is opposed to any expansion of the sales tax, whether for transit or another use, or a congestion tax that would impose a fee on drivers under certain circumstances. Such a tax would drive down return to office numbers, he said.

CMAP has floated the idea of a fee on drivers who enter a certain area, like the central business district downtown, as a way to account for increased congestion and bad air quality caused by driving, and a way to incentivize drivers to consider other ways of getting around.

“We’re opposed to those taxes,” Lavin said. “We understand transit is very important to the regional economy, so we need to get to a resolution. But those two taxes, we’re opposed to.”

Rob Karr, president and CEO of the Illinois Retail Merchants Association and another member of the advisory committee, took issue with what he described as an “if you build it, they will come” approach taken by the report to solving public transit’s challenges. The recommendations seemingly failed to take into account the current low ridership, he said.

“We are all about moving people, tourists, they’re our employees, they’re our shoppers. But we also have to be conscious of the effectiveness and the cost-effectiveness of the entire system, because our members also pay that,” he said, referring to property and sales taxes.

Whether any of the CMAP ideas are ultimately enacted will come down to the state legislature.

In the meantime, the planning agency, in its report, painted a dire picture of failure to address the fiscal cliff: drastic service cuts, a hit to the regional economy, failure to meet the region’s climate goals and inequities for those dependent on transit.

“This funding crisis has the potential to decimate service, cripple local economies and downtowns reliant on transit, and diminish quality of life for residents,” CMAP said in the report.

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