The clock is ticking for state lawmakers to seek out greater than $700 million for the CTA, Metra, Tempo and Regional Transportation Authority earlier than they run out of federal COVID-19 grants subsequent yr and resort to drastic cuts in service.
Lawmakers stay laser-focused on reforming the businesses as they focus on two payments to both merge the businesses or empower the RTA.
However legislators have all however refused to speak about speedy funding options.
“There might be no funding with out reform,” state Sen. Ram Villivalam, D-Chicago, has repeatedly stated when requested about potential funding options. He reiterated the purpose in a name with the Solar-Instances this week.
Time is operating out, although. Transit bosses say a funding answer should be discovered by the tip of the spring legislative session.
Listed below are a few of attainable transit funding options into consideration:
Room within the price range?
Reallocating cash from the state price range can be a fast stopgap answer. However that is politically difficult, stated Kate Lowe, an affiliate professor within the Division of City Planning and Coverage on the College of Illinois Chicago. Gov. JB Pritzker’s price range contains no new cash for transit.
“Sadly, public transit is just not the one factor on the lookout for cash within the state price range,” Lowe stated.
What about ‘flex’ funds?
One of many quickest methods to seek out cash could also be to redirect the state’s federal freeway funds to public transit in a course of known as “flexing.”
Most states shift little or no federal cash to transit. Illinois has shifted round 2%, in keeping with one research, far behind New Jersey and California which shift between 10% and 15%.
Pennsylvania Gov. Josh Shapiro ordered $153 million in federal freeway funds to be shifted to transit to keep away from drastic cuts to Philadelphia’s public transit system final yr.
Illinois might do the identical. However it will require approval by the Illinois Division of Transportation.
“We’d like speedy options and IDOT has some capability there,” Lowe stated.
Options down the highway?
Lawmakers are additionally contemplating a “highway utilization cost” that taxes motorists by what number of miles they drive. It’s billed as a substitute for the motor gasoline tax — which has seen dwindling returns as extra electrical autos and fuel-efficient vehicles hit the highway. One invoice proposes testing the tax on 1,000 autos earlier than increasing statewide.
“However there’s no method it’s going to be implementable in time to stave off cuts,” Lowe stated. “And the cuts will take years to reverse.”
Proponents admit switching to a brand new funding mannequin would require modifications on the federal degree. Till then, a proposed tax on charging stations might elevate tax income from EV drivers.
Broaden the gross sales tax?
A possible long-term answer would contain increasing the gross sales tax to additionally cowl companies, although any change to the gross sales tax would come lengthy after the fiscal cliff.
The RTA already collects over $1 billion for transit annually by means of a gross sales tax that covers 29 out of 176 shopper companies within the state — far fewer than most neighboring states, in keeping with a suggestion from the Civic Federation, the Middle for Tax and Price range Accountability and the Chicago Metropolitan Company for Planning.
The teams say increasing the tax to cowl companies can be extra honest to low-income earners. Excessive-income households spend 5 occasions extra on untaxed companies than low-income households, they are saying.
Ralph Martire, govt director of the Middle for Tax and Price range Accountability, stated the state’s present slender gross sales tax base is “a prescription for failure for fiscal coverage.”
“Illinois has actually fallen behind the remainder of the nation, and has didn’t make use of finest practices by having too slender of a [tax] base,” he stated.
How about taking one other shot at progressive tax?
A possible long run answer could possibly be a progressive revenue tax, Lowe stated. Pritzker tried and didn’t cross one in 2020. However Massachusetts’ governor has prompt utilizing practically $1 billion for public transit collected from the state’s 4% revenue tax on folks making $1 million or extra.
A progressive revenue tax would have been versatile sufficient to take care of this type of funding burden, Martire stated. However Illinois’ vote in opposition to implementation created extra hoops for the state to leap by means of to satisfy its targets.
Are fare hikes honest?
The RTA has prompt elevating fares 10% throughout the board, netting $50 million in annual funding. That solely covers a part of the price range hole.
However elevating fares might harm a few of the individuals who depend on transit probably the most, Lowe stated. Plus it might contribute to a “transit demise spiral,” during which fare hikes result in decrease ridership and fewer income total.
Are financial savings attainable by means of reorganization?
The RTA has stated it recognized $63 million in potential financial savings by means of efficiencies. However it’s not practically sufficient to shut the price range deficit. Villavalam advised the Solar-Instances he desires the businesses to seek out practically 4 occasions as a lot financial savings.
Is the Could deadline actually the deadline?
Regardless of transit bosses’ rush to discover a price range answer by the tip of spring, lawmakers are adamant that no further taxpayer cash might be known as upon with out proof of improved companies.
Legislators should not going to be “threatened” to supply funds, state Rep. Marty Moylan, D-Des Plaines, advised the Solar-Instances, referring to the RTA’s “doomsday” warnings. If anybody will get laid off, “we’re going to start out on the high,” Moylan stated.
As reform laws crawls its method by means of the statehouse, Moylan stated transit businesses can wait until November’s veto session to get their reply on funding.
