Without More Federal Dollars, RTA Will Run Out of Cash in Early 2021
A Metra commuter train leaves a station in suburban Schiller Park headed to Antioch. (SOURCE: Wikipedia)
On a Friday afternoon at the Metra commuter rail stop outside of the Arlington Park Racecourse in the Chicago suburbs, you’re usually going to see a flurry of people returning from their jobs in downtown Chicago or heading to the track for an evening of racing entertainment.
These days, the parking lot is mostly empty and there are just a few people coming and going. The lack riders on public transit all around the Chicago area is leading to a pending financial calamity.
The Chairman of the Board of the Regional Transportation Authority, which distributes funding for Chicago area mass transit agencies Metra, Pace, and the Chicago Transit Authority, says the services will run out of money in early 2021 without another federal bailout.
RTA Chairman Kirk Dillard, a former Republican State Senator, says RTA is holding over part of the $1.4 billion in federal CARES Act money it received, but the dollars will likely run out in late February or early March without further congressional action.
RTA Chairman Kirk Dillard
“We are still ok for the short term, but after the first of the year, we will hit a cliff without another round of federal assistance,” Dillard says.
The main issue, Dillard says, is the dramatic drop in ridership when the coronavirus pandemic hit in mid-March and has yet to recover as many white-collar employees in the Chicago and its suburbs continue to work from home.
He says about half of revenue for the systems is paid for by fares.
“The loss of ridership is the largest component of the hemorrhaging losses we’re feeling,” Dillard says. “No one thought that we would see these types of ridership declines for as many months as we have when COVID-19 first came on the scene.”
RTA reports ridership across the systems is down around 70% from this time last year. The worst losses are on Metra, where ridership has been down consistently more than 90% everyday since the pandemic struck in March.
Furthermore, state sales tax revenue has been down much of the year. It was at its worst in April, when sales tax income was down around 30% from last year. It has since rebounded but is still off from 2019. Add the fact that the state is slow in distributing the funds, and it is a second financial pickle for transit.
“The state is still always several hundred million late in making payments to CTA, Metra, and Pace from the Public Transportation Fund,” Dillard says. We have to spend money to borrow, to fill the state’s tardiness in distributing public transportation funds.”
According to the Illinois Comptroller’s Office website, the RTA has yet to receive any of $1.4 billion it was promised in the state budget for capital improvements. State reports show around $420 million of sales tax revenue has been delivered on time during the current budget year.
Dillard says COVID-19 has likely changed mass transit forever.
“Even [after a] COVID vaccine, the status quo is going to be changed forever, and we in the mass transit industry need to reimagine and redefine what mass transit looks like going forward,” Dillard says. “We’re going to have to see what the new workforce looks like and adjust accordingly. That means scheduling service, what types of equipment do we operate, and we need to be flexible.”
While the question of funding may not be answered until at least after the election, Dillard says there is a broad coalition of Illinois’ congressional delegation which strongly supports mass transit.
He says mass transit has a high return on investment.
“In last decade in Illinois, 50% of all of the jobs created were within a half mile of mass transit. And 85% of all new commercial construction was within a half mile of mass transit. 76% of all new multifamily housing starts were within a 10-minute walk of a CTA or Metra station,” he said. “So the state of Illinois’ economy is kept alive by mass transit.”
But how long mass transit is kept alive in the Chicago area could be a decision made by Congress.
