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TFI analysis: Transit’s fiscal cliff will be $225 million smaller than expected because of state’s online sales tax expansion

Wednesday, Jul 16, 2025 - Posted by Rich Miller

* From an RTA document

Effective with the January 2025 results, a change in State law extended local taxes, including the RTA sales tax, to more online transactions. Based on actual results for the first quarter of 2025, this change has increased RTA sales tax collections by around $10 million per month, or $120 million for the year. The 30% State PTF match of the increased sales tax collections is likely to add another $36 million of available funding, for total new public funding of $156 million.

* I told subscribers several months ago that transit’s $771 million “fiscal cliff” might not be that high because of those aforementioned tax changes. The Illinois Department of Revenue was skeptical at the time.

But the numbers have held up. So far since April (there’s a three-month reporting lag), the tax has brought in about $94 million extra for the RTA, including the state match, according to an analysis by the Taxpayers’ Federation of Illinois.

* From Crain’s

Based on receipts so far, the Taxpayers’ Federation says RTA sales-tax revenue will be about $150 million higher for 2025, noting that the new money didn’t begin to show up until April because of a typical lag in collections. […]

The Taxpayers’ Federation estimates the full-year increase in revenue at about $225 million in 2026.

So, the RTA will receive $150-156 million extra this year, before the fiscal cliff begins; and then as much as $225 million every year after that cliff is triggered by the loss of federal funding.

You’d think the RTA would put those unexpected 2025 dollars aside to help the agency deal with the coming troubles, but they want to spend that money now.

But, yeah, no need for governance reform.

* Speaking of reform, Mayors Johnson and Rotering say they will be working with other mayors this summer to come up with a plan. That could’ve been done a year ago, but I suppose better late than never. Press release…

Metropolitan Mayors Caucus Calls for Seat at the Table in Transit Reform Effort
Caucus Convenes 275 Communities Following Last-Minute NITA Bill Filing

CHICAGO (July 16, 2025) The Metropolitan Mayors Caucus announced today it is leading comprehensive discussions among its 275 member communities this summer to reach consensus on regional transit reform recommendations, following concerns that local municipal leaders were excluded from deliberations in Springfield on the final stages of the Northern Illinois Transit Authority (NITA) Act.

“We are affirming our leadership role in this process by bringing together all 275 communities, including the City of Chicago, to develop thoughtful consensus and a path forward for regional transit,” said Highland Park Mayor Nancy Rotering, who chairs the Caucus. “Because regional transit governance and funding directly affect every one of our constituents, this summer’s discussions will work to ensure that the voices of municipalities across northeastern Illinois are clearly represented when the Illinois General Assembly reconvenes to consider comprehensive transit reform.”

With millions of daily trips across the six-county region depending on reliable public transportation, the stakes are too high for anything less than a collaborative, well-conceived approach across all levels of government. The Caucus affirms that all stakeholders must work together to achieve sustainable solutions that serve riders, increase access, support economic growth, and strengthen communities across the region.

“Transit reform is necessary for our entire region, and transformational change requires transparency and genuine partnership,” said Chicago Mayor Brandon Johnson. “Chicago stands ready to work with state lawmakers and municipal leaders to create an interconnected transit system for our region that invests in people and creates an economic future for all communities.”

This action comes after the final version of the NITA Act (HB3438) was only filed publicly in the final hours of the legislative session despite months of public hearings.

“While we commend the bill sponsors for hosting extensive public hearings to design this important legislation, the timing of the final bill’s release fell short of true partnership,” said Highland Park Mayor Rotering. “For local communities to support new transit reform legislation that serves the public and make reform successful, there needs to be genuine collaboration between mayors and policymakers throughout the entire process.”

The Caucus will present unified recommendations to the General Assembly in advance of their return to Springfield for the fall veto session in October or earlier if a special session is called. This collaborative approach will ensure that municipal perspectives are fully incorporated into any final transit reform legislation and yield practical, effective solutions that benefit riders and work in all affected communities.

* Roundup by Isabel

    * Streetsblog Chicago | At the Save Transit Rally, hundreds urged Springfield to prevent 40% service cuts by passing a funding bill this summer: Better Streets Chicago’s Executive Director Kyle Lucas kicked off the demonstration. “For decades, the State of Illinois has underfunded public transit,” he said, noting that while the CTA is one of the nation’s largest transit systems, Springfield only covers 17 percent of operating revenue. Meanwhile, peer cities have much higher percentages of state funding, such as New York (28 percent) and Boston (44). If theses states can do that, he argued, “so can the state of Illinois.”

    * Chicago Reader | CPD, CTA expand surveillance: At a mid-July press event, the CPD claimed an upgraded surveillance center was necessary to address robberies on public transit. As part of its efforts to expand the First District SDSC, detectives from the CPD’s robbery task force will join officers from the public transportation unit to monitor the CTA’s roughly 40,000 cameras. Crime on CTA property has fallen from its peak at the height of the COVID-19 pandemic, when ridership plummeted. That mirrors a similar trend of falling violent crime rates citywide.

    * Journal & Topics | Union Pacific Northwest Metra Line’s Future Uncertain As Negotiations Continue: In mid-May, Metra officially assumed the responsibility for operating the three lines that Union Pacific previously operated under contract. The one remaining issue has been how much Metra would pay Union Pacific to continue to use the tracks. On May 21, the freight railroad announced that, if the agreement isn’t reached, it will impose one effective July 1. On June 30, Metra asked the U.S. Surface Transportation Board for an injunction to keep the previous arrangement in place until the two sides could finalize an agreement, even while saying that it wouldn’t recognize the Union Pacific-imposed agreement. The Surface Board denied the request, saying that Metra failed to show that there was an imminent danger of Metra’s service being disrupted. But it was dubious about Union Pacific trying to impose an agreement unilaterally, and encouraged both sides to keep negotiating.

    * Block Club | Lincoln Square Construction Unearths A Piece Of Pre-CTA History: “Those tracks would have been installed in 1895, when electric streetcar service on Lincoln Avenue was extended north from Irving Park to Foster,” said Graham Garfield, whose Chicago “L” website documents the transit system’s history. “Though maybe not those specific rails, as they were likely replaced at some point as part of regular maintenance — though you never know.”

    * NBC Chicago | Lollapalooza, CTA release streetwear merch in collaboration with local artist: The festival and the CTA partnered to release a three-piece collection designed by Ellen Ma, a local artist and creative director of Leaders 1354, according to the CTA. “This year, Lollapalooza reached out to CTA to collaborate on official concert merchandise. As some of the city’s most recognizable institutions, the partnership felt natural,” the CTA said in a news release. “Lollapalooza is the concert in Chicago and CTA is how Chicago gets there.”

       

4 Comments »
  1. - Socially DIstant Watcher - Wednesday, Jul 16, 25 @ 2:50 pm:

    ==You’d think the RTA would put those unexpected 2025 dollars aside==

    The RTA is off the rails


  2. - JB13 - Wednesday, Jul 16, 25 @ 3:41 pm:

    Until the state of Illinois gives the RTA folks a reason to believe they won’t ultimately get the much bigger jackpot they believe they’re going to get, there really is no motivation for them to do anything other than light all the new unexpected money on fire and recommence wailing about their fiscal peril


  3. - Big Fan of Buses - Wednesday, Jul 16, 25 @ 3:46 pm:

    I think the transit agencies spending more on service is a good thing, especially ADA paratransit for people with little other mobility options.


  4. - Excitable Boy - Wednesday, Jul 16, 25 @ 4:25 pm:

    - You’d think the RTA would put those unexpected 2025 dollars aside to help the agency deal with the coming troubles -

    C’mon, Rich, just think how many ads that money could buy.


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