Transit reform can support Illinois riders and taxpayers. These seven principles outline a path to affordability, accountability and efficiency.
Illinois’ mass transit system is headed toward a fiscal cliff. Chicago Transit Authority, Metra and Pace will collectively face a combined $834 million deficit by 2027. Federal relief has expired and ridership is far below pre-pandemic levels.
These seven principles can help guide transportation policy:
- Consolidates governance to reduce duplication.
- Prioritizes cost savings.
- Opposes new or higher taxes.
- Modernizes fare policy and service integration.
- Delivers capital projects on time and on budget.
- Connects funding to performance.
- Promotes land use reform to strengthen transit.
Without reform, it would mean service cuts, hurting workers and families who depend on reliable transit. Cuts may include fewer buses and trains, eliminating routes or reducing the frequency of stops and more.
Transit is an important public good for Illinois’ economy. But the system is currently weighed down by fragmented governance, duplicative overhead, outdated funding formulas and cost overruns. Too often, politicians answer these failures with calls for new taxes or bailouts. Illinois already pays some of the highest tax burdens in the nation. Pouring more money into a broken system won’t fix the problem and will drive more residents away.
There’s a better solution. Illinois should deliver better service at lower cost. That means reforming governance, eliminating inefficiencies, focusing resources on the riders who need transit most and holding leadership accountable for results.
Keeping the Chicago area a hub for robust public transit means the RTA restructuring to operate like an efficient, customer-oriented system.
The Illinois Policy Institute supports transit reform that:
1) Consolidates governance to reduce duplication
The RTA oversees CTA, Metra, Pace, four separate boards for Chicago-area transit. It’s a fragmented, wasteful structure with conflicting incentives and missed opportunities to integrate service. Each agency maintains its own HR, communications and administrative departments.
Consolidating into one authority would cut government bloat and free up resources for operations, saving as much as $200 million to $250 million per year. Board stipends should also be standardized and reduced.
The CTA spends money on security officers who aren’t law enforcement. That money could help invest in more police officers stationed at CTA train stations who can address crime. Our estimates show that one officer at every CTA train stop would cost about $20 million annually.
2) Prioritizes cost savings
New state support must include long-term structural reforms. Right-sizing service to reflect post-pandemic ridership trends, including fewer rush-hour trains on lightly traveled days, would cut overtime costs and improve efficiency. Overtime costs have increased nearly 40% since 2019, from $86 million to $120 million in 2024 with at least 100 employees making double their annual salary thanks to overtime costs.
Consolidating back-office operations and reducing duplicative administrative positions could save on personnel costs. Streamlining management layers and standardizing departments such as HR, communications and procurement would eliminate waste and reduce payroll obligations without affecting service quality.
Once these adjustments are made, the system could consider automation which, though requiring significant upfront investment, would reduce long-term labor and pension costs.
3) Opposes new or higher taxes
Illinois families and businesses already shoulder the highest state and local tax burden in the Midwest. Transit funding should not come from income tax hikes, sales tax hikes, or other broad-based tax increases. Instead, reforms should focus on right-sizing costs, aligning service with demand, and protecting riders without extracting more from taxpayers.
The institute is committed to opposing a statewide delivery tax that would unfairly burden downstate residents who may never use Chicago-area transit and should be rejected. If additional dedicated funding is considered, it must be whatever is the least harmful option.
That could be allowing existing gas tax revenues, billions of which currently sit unused in the transportation infrastructure fund, to support transit. This would allow a shift in resources without raising taxes.
4) Modernizes fare policy and service integration
Fare policy should balance affordability with fiscal responsibility. It’s no longer feasible to have a day pass priced at the same rate as a single round trip at $5. Passes should be priced between three and four trips to encourage frequent use without subsidizing overuse.
5) Delivers capital projects on time and on budget
The Red Line Extension is now projected to cost more than $1 billion per mile. That’s far more than other above-ground, heavy rail projects in cities like the District of Colombia, Miami, Honolulu, and the San Francisco Bay Area. Illinois must rebuild in-house expertise in engineering and project management to cut reliance on consultants and contractors.
Major capital projects should be tied to measurable development benefits, such as linking underinvested West and South Side neighborhoods to job-rich areas. Projects need to be finished on time, on budget with a comprehensive search for the lowest cost labor. Excessive labor costs, regulations have ballooned prices and delayed the completion of recent projects.
While Illinois’ prevailing wage and benefit requirements remain in place, project sponsors should still pursue every opportunity to contain costs through rigorous competitive bidding, clearer project scopes and better contract management.
State lawmakers should examine reforms to prevailing wage and project labor rules that limit competition and inflate prices, ensuring cost-effectiveness and value for taxpayers without compromising safety or quality.
6) Connects funding to performance
Transit should not be rewarded simply for existing. It should be judged on service quality, ridership and cost efficiency. Future funding must be linked to measurable performance standards, ensuring that Illinoisans get value for every dollar invested. That means transparent reporting, independent audits and clear accountability for failures.
CTA leadership reports to the City Council only quarterly, with minimal state oversight. The state should require quarterly reporting about ridership trends while they are in the red and make funding tied to outcomes on concrete metrics.
7) Promotes land use reform to strengthen transit
Transit and housing policy must work together. Illinois should encourage universal upzoning near transit stops, allowing up to eight housing units near rail stations. Especially with the recent ordinance passed in Chicago eliminating parking requirements for developments near transit, more people may start relying on public transit than in previous years.
Allowing for even more transit-oriented housing for people who don’t own cars will increase ridership, promote affordability and connect more Illinoisans to reliable service.
Illinois’ transit fiscal cliff is an opportunity. The state can either repeat the mistakes of the past by hiking taxes and propping up waste, or it can use this moment to fundamentally restructure the system for efficiency, affordability and accountability.
By consolidating governance, eliminating duplicative costs, modernizing service, reforming fare policies and resisting calls for higher taxes, Illinois can build a leaner, smarter transit system that serves riders and supports a vibrant state and local economy, while respecting taxpayers and the principles of fiscal responsibility.
