(Bloomberg) — Chicago transit officials are advocating for a $1.5 billion annual funding package to help keep one of the country’s largest transportation systems afloat as it stares down a steep financial cliff in fiscal 2026.
The Regional Transportation Authority — a government agency that oversees finances and transit planning for the Chicago Transit Authority, the city’s commuter rail system Metra and the bus agency, Pace — announced a plan Wednesday to plug a $770 million budget gap coming this summer. That hole represents 20% of the regional operating budget and could warrant draconian service cuts of as much as an estimated 40% if a solution can’t be found by the end of the spring legislative session in May.
A hole in Chicago’s public transit budget will significantly reduce the number of Metra trains running per day, add to road congestion and ultimately slow the double-digit ridership growth that the system achieved post-pandemic, said Kirk Dillard, the RTA chairman, in a Wednesday speech at the City Club of Chicago. Moreover, train and bus operators would have to be laid off.
“The extraordinary economic and environmental benefits that our mass transit system provides would begin to dissipate as roads became more clogged, businesses began to suffer from loss of labor and customers, our air got dirtier, and our region overall became a less desirable one to live and work in,” Dillard said.
Officials are calling for an annual $1.5 billion in additional operating funding from state and local sources. They are also seeking continued capital investment to slash bus and rail wait times for riders by as much as 50% while establishing more frequent service for the regional and city systems. A fare increase of 10% could generate $50 million to help address the fiscal cliff, they said.
The proposed reforms also call for the RTA to be responsible for decisions on fare levels, service quality and capital investment. Illinois law currently does not empower the authority to institute changes and improvements throughout the year.
“The reality is we have three very different operators serving very different unique markets,” said Leanne Redden, executive director of the RTA. “If we have enough money to do the things that we want to do, and with the RTA empowered to take that coordinated and stronger regional focus, we think we can really deliver on a lot of those outcomes.”
Decades of underfunding have created massive operating budget gaps for major transit systems across the country. With pandemic aid drying up, those shortfalls loom over the next fiscal year, leaving agencies contemplating ways to stay afloat. On Tuesday, Massachusetts officials proposed an $8 billion investment to help plug a projected $700 million operating deficit for 2026.
“The funding has to come with reform,” Dillard said in an interview. “The consequences are dire if we don’t have this funding, and would literally start a death spiral roll that mass transit may never recover from.”
(Updates with statements from Regional Transportation Authority officials.)
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