SPRINGFIELD — With the clock running down to avert Illinois’ impending public transit fiscal cliff, state lawmakers late Thursday brought forward a new plan that excludes most of the broad taxes and fees on Illinois consumers that tanked previous versions.
The new proposal, discussed in a House committee hearing late Thursday even before new language had been publicly introduced, calls for funding the overhaul of Chicago area’s transit systems primarily through a roughly $860 million state motor fuel sales tax, about $200 million in interest from the state’s road fund and more than $400 million from a potential, slight sales tax increase in the Chicago metro area, according to Democratic state Rep. Eva-Dina Delgado of Chicago, a key transit negotiator in the House. The legislation also included a sharp increase in tolls on the Illinois Tollway.
Together, that amounted to “a way that we can avoid raising significant taxes on folks but still be able to do a transformational investment in transit,” Delgado said.
The proposal is the General Assembly’s second attempt at a transit funding bill this week, after Gov. JB Pritzker shot down an earlier proposal and prompted lawmakers to come up with yet another set of revenue options.
Lawmakers were scrambling to find a way to raise the roughly $1.5 billion that advocates and some legislators say is needed to revamp the Chicago-area transit system and keep the Chicago Transit Authority, Metra and Pace running at an adequate level.
The plan was coming together on the final night of the fall legislative session and the last scheduled meeting of the year for the full House and Senate. Both chambers will have to approve the measure before adjourning or will likely be forced to deal with the issue next year.
During the committee hearing Thursday evening, the proposed measure faced pushback from lawmakers who suggested the bill would fund Chicago-area transit at the expense of downstate infrastructure. Opponents also expressed frustration that they were asked to debate the proposal without a version of the bill ready to read.
The bill proposed earlier this week that Pritzker knocked down included a sweeping menu of options to raise the $1.5 billion, including taxes on streaming services and billionaires, as well as half the revenue from allowing new speed cameras to be installed in Chicago suburbs. Those provisions did not appear to be included in the discussions of the new bill.
In the latest bill, in addition to the motor fuel sales tax and interest from the road fund, the legislation would authorize the Regional Transit Authority to raise its sales tax by 0.25 percentage points.
The bill introduced Thursday would also hike tolls collected by the Illinois State Toll Highway Authority. It would increase the tolls for commercial vehicles by 30% and raise the toll for passenger cars by 45 cents per toll. The revenue from the toll hike would generate between $750 million and $1 billion annually and would be put back into the tollway, not used directly for mass transit.
But the move was intended to offset the money diverted from highway projects and appeared to have won the blessing of the International Union of Operating Engineers Local 150, which opposed a failed springtime effort to fund transit with a toll hike.
Downstaters, including Republican state Rep. Ryan Spain of Peoria, questioned the decision to divert revenue to transit in the Chicago region rather than to a fund where it likely would have been used to improve downstate roads.
Of the interest from the road fund, 10 percent would go downstate while the rest would be dedicated to the Chicago area, Delgado told lawmakers. The split from the motor fuel sales tax would be 85-15.
Downstate systems would get just under $150 million from the main funding mechanisms, Delgado said. But Republicans said that added up to far from a worthwhile tradeoff, given the amount they expected to lose due to diversions from road infrastructure projects to mass transit under the bill.
“The sense of betrayal that I have for the way this has been switched is significant and very deep,” Spain told Delgado and Democratic state Rep. Kam Buckner of Chicago, the other top House transit negotiator, during the Thursday hearing.
Legislators hope the new proposal could help prevent the CTA, Metra and Pace from cutting jobs and making drastic service cuts as hundreds of millions of dollars in federal pandemic aid runs out.
The CTA, in particular, has warned that it is facing the “single-largest transit service cut in the modern history of the Chicago Transit Authority,” as the crisis was described by acting agency president Nora Leerhsen earlier this month.
Without more money, the CTA has warned, it will have to cut transit service by as much as 25% starting next August.
The Regional Transportation Authority, which oversees the CTA along with sister agencies Metra and Pace, has long warned that the looming structural fiscal deficit will devastate mass transit in the Chicago region if lawmakers in Springfield don’t raise more money.
The CTA is expected to hit the fiscal cliff — which is caused by the depletion of federal pandemic aid and ridership numbers that simply haven’t recovered to pre-pandemic levels — before Metra and Pace. Neither of the latter two agencies expects to cut bus or train service next year, but both have warned they’ll have to make cuts in 2027 and beyond without more state funding.
For months, the RTA said the budget gap next year would total around $770 million. But less than two weeks before the start of the veto session, the agency sharply revised that projection downward, attributing the change mostly to an expansion of the state sales tax.
Now, the RTA says, the regional budget deficit next year is about $230 million, although it will balloon to more than $800 million in 2027 and beyond.