Illinois Enacts a Ground-breaking Transit Funding Bill

 If you follow transportation funding issues, you are probably aware that many transit agencies around the US are facing a so-called “fiscal cliff” – a dramatic funding shortfall that coincides with the end of federal Covid emergency funding.  Although transit ridership has been growing in most places, it still hasn’t caught up with pre-Covid numbers, leading to a major reduction in fare box revenue.  With no federal funding to make up the shortfall, transit agencies are left in a pinch.  The fiscal cliff has posed a major political challenge for state legislators throughout the country, who are effectively the last line of defense for transit.  Some states have come up with temporary fixes, some (looking at you, Pennsylvania!) are flirting with disaster, and a few have come up with serious long-term solutions.

Illinois has gone to the head of the pack for long-term solutions.  A new funding bill (passed on Halloween – make of that what you will) appears to have put a long-term funding fix in place, while implementing other pro-transit reforms (story here).

The Illinois funding formula represents a masterful political compromise.  No new statewide taxes are raised for transit.  Instead, about a Billion dollars a year is diverted to transit from the “Road Fund,” which is constitutionally permitted in Illinois, and this is topped up with a regional sales tax to support greater Chicago transit.  Normally, diverting money from roads to transit would cause an uproar from the construction industry and building trades unions.  However, the Illinois legislature essentially held the highway sector harmless by increasing funding for toll roads through a major toll hike.  In other words, the bottom line is a Billion dollar a year increase in transit funding with no net loss in highway funding (see this story from the state association of counties on the politics involved).  Everyone seems to be on board with this solution except the Republicans, who unfortunately seem to be unable to support any transit funding anywhere.

The legislature also used the funding bill as a vehicle for two major transit policy measures.  First, the “People over Parking Act” prohibits municipalities from enforcing minimum parking requirements in most cases on new development in the vicinity of transit stations and major transit corridors.  As many cities have found out, this simple step can boost high-quality urban development.  Second, the new Northern Illinois Transit Authority – created to coordinate the various transit agencies in the greater Chicago area – is given explicit statutory authority to get directly involved in promoting and investing in transit oriented development.  We’ll see how that plays out in practice.

This kind of legislation represents, in my opinion, not just progressive transportation policy, but also good governance.  A major public policy problem has been tackled head on in a way that is transparent and that takes into account all the legitimate interests affected.

Good work, Illinois!