Charles Rex Arbogast/AP Photo
A Chicago Transit Authority train pulls into the Damen Avenue station two blocks from the United Center, August 12, 2024, in Chicago.
CHICAGO – Cities and states across the country are reckoning with a major funding crisis for mass transit, and Chicago has become the latest city to fall off its “fiscal cliff,” failing to guarantee funding for its transit systems.
With federal pandemic funds drying up, the Regional Transportation Authority (RTA), the regional agency that oversees the three operators that make up the northeastern Illinois transit system, announced in March that the state needed to find $770 million to keep the systems running as usual through 2026. Ideally, RTA officials argue, that figure should be more like $1.5 billion to actually improve the system.
But when the Illinois General Assembly’s session ended on May 31, state lawmakers hadn’t agreed on a new revenue source for the region’s mass transit. For months, the RTA and local transit advocates have been sounding the alarm, saying that date was Springfield’s deadline to prevent the region’s transit system from falling off the cliff.
The failure to resolve the mounting fiscal issues could end up being disastrous for Chicagoans who rely on transit and the workers who are employed by the three regional transit operators: Pace, Metra, and the Chicago Transit Authority (CTA). According to the RTA, the lack of funding could cost 3,000 transit workers their jobs. One in five Chicagoans could lose their transit options: The CTA could reduce or completely cut service to 50 of its rail stations and be forced to cut 74 of its 127 bus routes—and end up having fewer bus routes than Kansas City and Madison, Wisconsin.
When transit ground to a halt and ridership plummeted during the COVID-19 pandemic, the federal government sent billions of dollars to Chicago and other transit systems rural and urban, like Atlanta, Washington, and New York.
In June, the RTA will give the three transit systems directions for creating their 2026 budgets, which are due in October, and only include those funding sources that they are confident they will receive. State legislators also could head back to Springfield for a special summer session to find a fresh solution, or they could propose funding alternatives when they return for two weeks in the fall to consider any vetoes Gov. J.B. Pritzker (D) makes. In the interim, the transit operators may have to prepare for an underfunded year and determine how to make cuts to their services and workforce if the dollars don’t materialize.
CHICAGOLAND’S PUBLIC TRANSIT SYSTEM consists of three operators: the CTA, Metra, and Pace. The CTA alone is the nation’s second-largest public transportation system, with almost one million rides taken on any given weekday. Metra is the region’s commuter rail service, connecting Chicago to the suburbs and nearby cities such as Gary, Indiana. Pace runs suburban bus networks and regional paratransit in the areas surrounding Chicago, and saw 23 million rides in 2024. In 2025, the CTA set their budget at $2.16 billion, Metra proposed $1.1 billion, and Pace proposed $78.8 million.
Since the operators receive federal money, they will need to make cuts in accordance with Title VI, which mandates that any service changes don’t disproportionately affect people of color or low-income people. The operators will need to study which lines and bus routes to cut, and then hold public forums where community members can comment on the proposed changes.
That work takes time, said Leanne Redden, the executive director of the RTA. Regular Chicagoans will feel the impacts before cuts actually hit. “That level of stress, anxiety, people’s ability to plan for school, jobs, work, medical appointments—all of that is going to play out in the meantime,” Redden said. The RTA has also warned that transit workers could by laid off as early as September if a solution isn’t found during the summer.
CHICAGO HAS EXPERIENCED fiscal cliffs before, said P.S. Sriraj of the University of Illinois Chicago’s Urban Transportation Center, but this one is different since the money came from the federal government.
“This has been necessitated because of the ‘one and done’ support from the feds to help with the operating side of transit operations, which has not been done in a long, long time,” he explained. In Illinois, under the RTA Act, which sets the agency’s funding and governance mechanisms, the state is expected to pay half of the cost of the region’s mass transit, with the remaining half funded directly from fares from the three transit agencies.
“That was all working well up until 2019, 2020, when the ridership fell,” said Sriraj. Since ridership numbers still haven’t recovered, the 50-50 split “is not going to be a reality anytime going forward.”
According to Kate Lowe, a professor of urban planning and policy at the University of Illinois Chicago, that 50-50 split makes Chicago an outlier among American cities. Typically, transit systems carry less of the financial burden.
“The Illinois legislature is not always kind to Chicagoland,” Lowe said.
WITH FEDERAL COVID MONEY RUNNING OUT (and new federal dollars at risk due to budget cuts and other conditions), plus revenue from fares not bouncing back to pre-pandemic levels, the onus has fallen on the state to find new funding sources. State Sen. Ram Villivalam (D-Chicago) had proposed legislation to address the fiscal cliff before lawmakers adjourned. The bill ended up passing the state Senate by a 32-22 vote, but never made it to the House. In Illinois, bills introduced after adjournment require three-fifths approval to pass.
Villivalam’s proposals focused on raising taxes, a common strategy for funding Chicagoland’s transit. The RTA already collects revenue from sales tax, but Villivalam’s legislation would have added a $1.50 statewide tax on food deliveries and a real estate transfer tax. The two proposals would have generated $1 billion and staved off the crisis.
The bill also included a 10 percent tax on rideshare trips in the region and a potential surcharge on drivers in metro Chicago that would be capped at $1 per day.
Transit policy experts have suggested that adding taxes on services could be a possible funding source, though those proposals didn’t make it into Villivalam’s bill. Since the RTA already collects revenue through sales tax, adding taxes on services like gym memberships and haircuts might be a logical next step.
Lowe echoed those ideas, but emphasized that she doesn’t see them as long-term sustainable funding sources. “I think expanding the sales tax to services is a good five-to-ten-year plan, because we will all be hurt if we fall off the fiscal cliff,” she said.
The long-term issue with sales and service taxes, however, said Sriraj, is that tax revenue tends to stay relatively flat year over year, while transit expenditures climb rapidly to meet the city’s needs.
There are other nontax options. Lowe cited Pennsylvania Gov. Josh Shapiro’s decision to flex federal highway dollars to support Philadelphia’s transit, saying that she hopes Pritzker would do something similar. “I would rather have a sustained, secured, continuing revenue source,” Lowe said. “Of course, a stopgap is better than cuts happening because cuts will take years to undo, but it’s really a missed opportunity to delay sustainable funding.”
But the RTA Act heavily restricts the funding sources available to the RTA, narrowing Illinois’s options. Transit funding solutions in a region like metro Philadelphia, Sriraj warned, would not necessarily be applicable to metro Chicago.
Chicago Mayor Brandon Johnson, for his part, suggested a tax on the wealthy to shift the burden away from taxes on sales and services. “There’s been some conversations about a millionaires’ tax and other forms of progressive taxation that challenges the ultra-rich to pay their fair share,” Johnson told reporters last week. “I think that it’s important that, you know, we come up with solutions that are sustainable, and that they don’t overwhelm, you know, the pocketbooks of working people.”
THE QUESTION OF REFORM versus securing new funding options is at the heart of the debate around Chicagoland transit. For decades, state legislators called for a reorganization of the multi-agency structure of the RTA, CTA, Pace, and Metra. In the early 2000s, the system faced another fiscal cliff, which the state managed to avert with more funding. In that funding package, though, state legislators stipulated that the three operators needed to get rid of the different fare structures and payment methods and move to a universal fare card system within a decade. In 2013, the three systems created a unified “Ventra” app, which riders can use across all three transit agencies.
Today, many legislators support establishing an umbrella agency that would combine all three agencies and eliminate the problems between the agencies and with the RTA. Villivalam’s bill proposed a Northern Illinois Transit Authority that would set up systemwide fares. While many Chicago transit advocates agree with these reforms, they also see the focus on reform as a distraction from the immediate risk of falling off the fiscal cliff.
“I get a little tired of hearing about reform, because yes, we should absolutely have integrated fare, and it’s ridiculous we don’t,” said Lowe. “But on a survey of CTA riders about what would make them ride transit more frequently, fare integration is consistently at the bottom of the list … Things like frequency, reliability, and safety, those all take funding, not reform.” But, Lowe noted, it’s always politically easier to talk about reform than to raise taxes on voters.
Yet Springfield punted on both funding and reform measures, leaving Chicagoans in limbo. Still, state lawmakers might head back to the capital this summer once they get a better sense of how the imminent federal budget cuts will affect Illinois.
If the state can meet the RTA’s $1.5 billion funding request, the results could be transformative. Wait times could be slashed, fares could be integrated, and the system could become cleaner and safer, says the RTA.
“If we are successful in not just filling the gap and moving towards that $1.5 billion investment to the transit system … the system would be unrecognizable,” Redden said. “I think that kind of investment will be transformational to the region’s transit system.”
But Redden’s optimistic view of the future seems far away now that May 31 has come and gone. Increasing taxes is politically tricky, especially in a slowing economy. There’s a chance that the legislature could only partially fund transit, still forcing the agencies to make some cuts. And on the federal level, mass transit is treated as a pariah; at the end of May, Transportation Secretary Sean Duffy went on Fox News and said that mass transit is “dirty”: “You have criminals. It’s homeless shelters. It’s insane asylums.”
The future of Chicago’s transit system is now in the hands of state legislators.
