Paying for transit operations : challenges and solutions for the Chicago Transit Authority

Abstract

This research identifies the challenges Chicagoland must confront to maintain a quality transit system. It analyzes the organizational and funding structure of the Regional Transportation Authority and its three service providers, including the Chicago Transit Authority. This investigation revealed that the greatest regional challenges are declining ridership (especially on bus) and increasing congestion from limited subsidies and a cost recovery statute. To address these challenges a series of alternatives were evaluated using a framework that considers revenue potential, incidence, side effects, and political feasibility. Based on this analysis, a four part strategy is recommended: 1. Change the current distribution formula. Unless a new allocation formula is established, CTA may not benefit from increased resources. The new formula should reduce reliance on discretionary funds by stabilizing current funding levels to the three service providers. 2. Increase RTA revenues. Currently the two wealthiest counties in the region (DuPage and Lake) pay significantly less than Cook County while enjoying comparable service. The RTA should increase their sales tax contributions to improve regional equity and increase resources. These resources should be used to address growing paratransit needs.

(cont.) 3. Develop a set of performance measures that respond to distinct transit markets. Rather than focusing exclusively on the cost recovery ratio, which risks the long-term vitality of the system, the RTA should develop a set of performance measures that maximize efficiencies within markets. This will allow the region to control costs, while still protecting weaker markets like bus and paratransit. 4. Include a transit pass as part of the personal vehicle registration tax. Having people prepay for transit services will provide an incentive for replacing some automobile trips, while generating regional subsidies. In the short run, this funding mechanism will serve as an incentive for RTA to promote fare integration. If expanded over time, it offers RTA the opportunity to increase transit service. The above recommendations will help reverse the current negative trends and stabilize ridership; however to increase ridership and mode share, more subsidy will be needed. Other promising revenue generators should be considered in the future to meet these goals.