The clock is ticking for state lawmakers to search 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 12 months 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 rapid funding options.
“There shall 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 have to be discovered by the tip of the spring legislative session.
Listed below are a few of potential transit funding options into consideration:
Room within the finances?
Reallocating cash from the state finances 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 finances contains no new cash for transit.
“Sadly, public transit will not be the one factor in search of cash within the state finances,” Lowe stated.
What about ‘flex’ funds?
One of many quickest methods to search 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%, according to one study, 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 12 months.
Illinois might do the identical. However it will require approval by the Illinois Division of Transportation.
“We’d like rapid options and IDOT has some capability there,” Lowe stated.
Options down the street?
Lawmakers are additionally contemplating a “road usage charge” that taxes motorists by what number of miles they drive. It’s billed as a substitute for the motor gas tax — which has seen dwindling returns as extra electrical automobiles and fuel-efficient vehicles hit the street. One invoice proposes testing the tax on 1,000 automobiles earlier than increasing statewide.
“However there’s no approach 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 adjustments 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 accordance with a advice from the Civic Federation, the Middle for Tax and Finances 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 Finances 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 might be a progressive earnings tax, Lowe stated. Pritzker tried and didn’t go one in 2020. However Massachusetts’ governor has suggested utilizing almost $1 billion for public transit collected from the state’s 4% earnings tax on individuals making $1 million or extra.
A progressive earnings 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 fulfill its targets.
Are fare hikes honest?
The RTA has instructed elevating fares 10% throughout the board, netting $50 million in annual funding. That solely covers a part of the finances hole.
However elevating fares might damage among 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 general.
Are financial savings potential by means of reorganization?
The RTA has stated it recognized $63 million in potential savings through efficiencies. But it surely’s not almost sufficient to shut the finances deficit. Villavalam instructed the Solar-Instances he desires the businesses to search out almost 4 occasions as a lot financial savings.
Is the Could deadline actually the deadline?
Regardless of transit bosses’ rush to discover a finances answer by the tip of spring, lawmakers are adamant that no extra taxpayer cash shall be known as upon with out proof of improved companies.
Legislators should not going to be “threatened” to offer funds, state Rep. Marty Moylan, D-Des Plaines, instructed the Solar-Instances, referring to the RTA’s “doomsday” warnings. If anybody will get laid off, “we’re going to begin on the high,” Moylan stated.
As reform laws crawls its approach by means of the statehouse, Moylan stated transit businesses can wait until November’s veto session to get their reply on funding.
