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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

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* 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

posted by Rich Miller
Wednesday, Jul 16, 25 @ 2:02 pm

Comments

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

    The RTA is off the rails

    Comment by Socially DIstant Watcher Wednesday, Jul 16, 25 @ 2:50 pm

  2. 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

    Comment by JB13 Wednesday, Jul 16, 25 @ 3:41 pm

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

    Comment by Big Fan of Buses Wednesday, Jul 16, 25 @ 3:46 pm

  4. - 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.

    Comment by Excitable Boy Wednesday, Jul 16, 25 @ 4:25 pm

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