Politics
Illinois Lawmakers Unveil New Funding Sources for Chicagoland Transit, Aiming to Stave Off Disastrous Fiscal Cliff
Just one day after the release of a bill outlining a new “one-network, one-timetable, one-ticket model” for Chicago area public transportation, state lawmakers touted new sources of revenue for the system aimed at staving off a fiscal cliff that could have sent transit into a death spiral.
“It includes a number of funding mechanisms that I, as one of the business leaders that I’ve spoken with, would describe as a shared sacrifice,” said state Sen. Ram Villivalam (D-Chicago), who’s one of the leaders on the transit bills. “It looks at cost savings, it looks at existing funding, and many other mechanisms.”
Villivalam cautioned in a Thursday morning press conference that while the savings and revenue amounts are based on estimates, lawmakers believe the measure will be enough to address the anticipated $770 million fiscal cliff next year, and then some — but likely not meet the $1.5 billion benchmark of public investment many transit advocates have been calling for.
The bill ensures “that we are building a system that not fills a budget gap for tomorrow or next year, but plans a system for the next three decades,” Villivalam said. “The funding mechanisms we put forward, with estimates, get us above the fiscal cliff amount.”
But labor leaders threw cold water on some of the funding options laid out in the measure, and some suburban leaders sharply criticized a number of the revenue and governance measures contained in the proposals.
The measure, filed late Wednesday night, features a new menu of revenue sources to help keep buses and trains running that include a public electric vehicle charging station fee, a tollway surcharge and extending rideshare fees and real estate transfer taxes to the Cook County suburbs and collar counties.
It also calls for some of the interest earned on the state’s road fund to go toward transit capital projects, and bars Metra from its past practice of redirecting operating revenue toward capital efforts. The revenue plan also anticipates cost savings from overhauling transit governance, as outlined in the measure released Wednesday morning.
The measure also changes the current formulas used to distribute money among CTA, Metra and Pace. For the first three years, transit agencies will get a baseline amount of money equal to the public funding and COVID-19 relief funding in the 2025 budget, with additional cash based on passenger- and mileage-related metrics. After that, the baseline will continue and additional money will be based on new service standards.
Some of the funding will be directed toward transit-oriented development rather than operations, which Villivalam argues will increase ridership.
Villivalam’s revenue proposal also includes governance changes that largely track with a version in the House, though the two versions will still need to be reconciled to create a new Northern Illinois Transit Authority.
While labor representatives have been a part of the negotiations, revenue items like the toll surcharge are raising red flags.
“The primary objective of funds collected at the tollways is to ensure roadways are safe for public use,” said Marc Poulos of the International Union of Operating Engineers Local 150. “This proposal is inequitable as suburban drivers would effectively subsidize urban transit systems … This critique of utilizing tollway funds for transit can be summarized as robbing Peter to pay Paul.”
Poulos also objected to interest on the road fund going toward transit, noting the fund already supports public transportation since more than half of trips are via buses using roadways.
The labor coalition that’s been pushing this bill has been firm that transit needs a dedicated revenue stream, and has floated other ideas like a tax on package deliveries among other options.
“Although there are many positive reforms to create a safer, more reliable system, the current legislative proposals in Springfield do not address the funding needed to address the fiscal cliff and implement these reforms to build the system riders deserve,” Illinois AFL-CIO President Tim Drea said in a statement. “Illinoisans deserve better and want a sustainable solution – not one that kicks the can down the road and sets our state up for a future fiscal crisis.”
Opponents who testified and some suburban lawmakers also objected to the makeup of the NITA board, the suburban real estate transfer tax, and mandating that all proceeds transit-related sales taxes in the collar counties go toward NITA. Collar counties currently receive a portion of the 0.75% tax collected by the Regional Transportation Authority.
“This bill in the form before us today doesn’t fix transit. Instead, it takes away the ability for county and local governments to provide services,” said Jennifer Bertino-Tarrant, Will County Executive and a former state lawmaker. “I speak for all the collar counties when I say this – we know there is a problem with transit, we want to be part of the solution, but we can not do that if we aren’t participating in substantive discussion to look to the future.”
The public charging station provision drew a mild rebuke from the Illinois Environmental Council, with the group’s legislative relations director, Dany Robles, calling it “hugely regressive” since those stations are most likely used by people in multi-unit buildings and could discourage low-income people from buying electric vehicles. But despite that caveat, Robles heaped praise on the governance changes and funding proposals.
But transit advocates and many legislators broadly praised the transit proposals at Thursday’s hearing, saying they represented meaningful reform and much-needed funding arrived at through a deliberative and collaborative process. And they lauded Villivalam, the committee’s chair, for shepherding hours upon hours of hearings from a wide array of stakeholders and everyday riders.
The presidents of the Civic Committee of the Commercial Club of Chicago and the Civic Federation largely praised the measure in a statement.
“This legislation creates a governance framework that prioritizes safety, service, consolidation, modernization, accountability, and effective governance. If applied with rigor, it could lead to the desired future of an integrated, accountable regional system that fosters economic growth and opportunity in a manner expected of our world-class urban region,” they said. “This is not to say that the work is done—improvements to oversight and efficiencies among others, are still needed—but the legislation maintains a fair regional balance and avoids the gridlock caused by overly burdensome voting thresholds that have historically impeded fiscally responsible decisions.”
Asked in committee whether the revenues identified would reach the $1.5 billion number advocates hope for, Villivalam said officials were “working through the final estimate.”
“Funding is the hardest conversation we have in Springfield,” Villivalam said.
The committee’s minority spokesperson, Sen. Don DeWitte (R-West Dundee) characterized the proposal as a “bailout” for the city and Mayor Brandon Johnson, and argued that having just one representative each from the collar counties on the NITA board meant they were unfairly outweighed. But Villivalam pointed out that the city, which represents the vast majority of riders, only has five seats on a 20-member board and could also feel disadvantaged.
In an uncharacteristically fiery rebuke, Villivalam challenged DeWitte to come up with a revenue stream the latter would vote for, saying he’s “open to all suggestions” and committed to getting the transit deal done by the end of session on May 31.
“This is my best attempt to achieve a world class transit system,” Villivalam said.
Contact Nick Blumberg: [email protected] | (773) 509-5434 | @ndblumberg
