Chicago transit plan that would raise rideshare taxes, tolls blasted by critics

With COVID-era funding set to dry up, Illinois officials are scrambling to address public transit concerns, with one new plan drawing intense scrutiny.

The proposed plan would consolidate the Chicago Transit Authority, Metra and Pace under one 20-member board, but would also entail implementing new taxes, increased tolls, and even surcharges on property sales within areas covered by the transit agencies.

Federal COVID-19 grant money is set to run out by 2026 for transit agencies in the Chicago area, including the CTA, Metra and Pace, leaving a $770 million budget hole.

A report from the Regional Transit Authority, which oversees the agencies, showed worst-case scenarios could include suspension of multiple CTA train lines, cuts to more than 70 bus routes and reduced Metra service during the early morning and late-night hours. Four of the eight CTA train lines could close, with as many as 74 of CTA's 127 bus routes facing elimination.

If a new transit bill isn’t passed before the end of the legislative session, layoffs could be initiated in coming months in anticipation of funding drying up for the system.

Under the terms of the proposed plan, the Regional Transportation Authority would be replaced by a new entity called the Northern Illinois Transit Authority, which would oversee the CTA, Metra and Pace. Governing that new organization would be a 20-member board, which would have five members appointed by the governor, five by Chicago’s mayor, five by the Cook County Board President, and five members appointed by county board chairs representing each of the five “collar” counties serviced by public transit lines.

State Sen. Ram Villivalam, chair of the Senate’s Transportation Committee, is spearheading the effort to consolidate the transit agencies.

"We've said from the beginning: no funding without reform. Central to that reform is this governance structure,” he said.

The new board would be responsible for developing new capital programs, setting fares, and implementing new service standards and a unified fare system.

Part of the funding for the new board would come via a 10% tax on rideshare trips that originate from, or end in, Chicago, Cook County and the five collar counties, according to officials. The bill would also implement a surcharge of up to 50 cents per toll on the Illinois Tollway system, and would also extend an existing $1.50 per $500 surcharge on property tax sales in the Chicago area.

Among other changes, the bill would also abolish a requirement that 50% of the transit agencies’ operating revenue come from farebox recovery, replacing that with a provision requiring 25% of operating revenue to come from that source, according to reporting from Streetsblog Chicago.

Finally, interest earned on monies in the state’s so-called “road fund” would be pushed toward transit capital spending.

The plan is already encountering fierce opposition, especially from suburban officials who are blasting it as a “cash grab” designed to funnel money toward Chicago and Cook County coffers.

“This Senate ‘solution’ is no solution at all. The Senate plan steals $72 million in DuPage tax revenue, imposes a local real estate transfer tax with no oversight from the county, and taxes suburban commuters,” a letter from Deborah Conroy, chair of the DuPage County Board, read. “This is a cash grab from the suburbs, plain and simple.”

Conroy said that the county could not raise enough money via other revenue streams to make up for funds that would go toward the transit system. She also said the bill would raise taxes on selling homes sixfold, and would take nearly $26 million in other revenue and steer it toward transit agencies.

Marc Poulos, executive director of labor management group Operating Engineers Local 150, also expressed opposition.

"I rise in opposition to this bill more specifically as to the funding mechanisms ... specifically the tollway surcharge,” he said. "The primary objective of funds collected for the tollway is to ensure roadways are remaining safe for public use and are achieved by prioritizing public safety through well maintained roads. It's essential that tollway funds remain exclusively dedicated to tollway related initiatives to support that goal."

State Sen. Don DeWitte also blasted the proposed legislation.

“The amendment to House Bill 2111 appears to confirm our initial fears that this is a Chicago-Cook County takeover of regional transit funding and operations because the voting thresholds appear to be heavily skewed toward Cook County and the city of Chicago,” he said.

Audrey Wennink of the Metropolitan Planning Council described the plan as a critical investment in transit, and one that is badly needed in the years ahead.

"It calls for bold reforms that we need. This bill will create a new regional authority that will centralize responsibility. It will mean one fare, one timetable, wayfunding so people can move between systems easily, and so the agency will be empowered to use every transit dollar for the greatest possible regional benefit."