Progress Illinois

With the Chicago Transit Authority and state officials reeling to plug a $300 million budget hole this week, there have been some questions raised about the systemic funding challenges facing the region's transit agencies.  We've proposed some solutions in the past, as have other transit wonks. But one option that's too often overlooked is the need to rebalance the state's surface transit funding formula.

There are several reasons why transit projects don't draw the same interest as road projects, but money is first among them. Last year, the transportation industry spent $1.12 million lobbying state lawmakers, according to a new study by the U.S. Public Interest Research Group (PIRG). Construction interests dished out $2.43 million. Their outsized influence, argues the study's authors, adversely effects how projects are prioritized:

“In our current campaign system elected officials must raise huge sums from major donors to win reelection,” said U.S. PIRG Democracy Advocate Lisa Gilbert, one of the authors of the report.

“In part because of this, we believe that transportation spending is skewed toward road-widening and new highway projects favored by developers, road builders and the other interests who make those contributions,” she added.

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State legislators headed back to Springfield today to begin the second and final week of the fall veto session. Here's a quick rundown of the issues they are taking up:

Borrowing

In case you hadn't heard, Illinois' tax base might as well be quicksand. According to the Commission on Government Forecasting and Accountability's latest quarterly report, personal income taxes fell 18 percent, corporate income taxes dropped 29 percent, and sales taxes revenues shrunk by 15 percent since July. At the same time, the legislature has passed legislation requiring that the state fund the Monetary Award Program (which provides scholarships to low-income college students) without identifying a revenue source. As a result, Gov. Pat Quinn is looking for another lifeline, this time in the form of a $900 million loan. The Tribune has the specifics:

Lawmakers might put the borrowed money into a special pot that would be used to pay state health-care costs, generating potentially another $400 million in matching federal funds. That also would free up money elsewhere to pay for the scholarships in Illinois’ Monetary Award Program.

Borrowing is normal when revenues are smaller than expected. But Illinois has already taken out $2.25 billion in loans ($1 billion in May and $1.25 billion in August) and also delayed payment on $3.7 billion in backlogged bills to "shore up" its budget. That money, as well as this new short-term borrowing scheme, needs to be repaid by June 30, 2010. In other words, the plan just digs a deeper hole.

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Another year, another Chicago Transit Authority "doomsday" scenario. Newly appointed CTA chief Terry Peterson is scheduled to unveil his agency's FY 2010 budget today and the details don't look promising. Facing an estimated $300 million deficit, a legal ad placed in the Tribune this morning says that the basic fare for trains and Lake Shore Drive express bus routes will jump $.75 while bus riders will be required to fork over an additional $.25 per ride. Nine bus routes will also be eliminated while 41 others will experience reduced hours.

Keep in mind that these fare changes will be implemented solely to close the 2010 operating shortfall. (The CTA has already filled $122 million of their deficit by requiring non-union workers to take unpaid furlough days and by diverting money appropriated for capital expansion into the operating fund.) Even though ridership is ballooning, the city isn't raising additional revenue to expand or enhance services. And those capital improvements are desperately needed; more than one-third of the existing trains, equipment, and facilities are outdated. Illinois PIRG estimates that it would take $60 billion over 30 years to expand its stressed fleets, extend routes to underserved communities, and perform routine maintenance on the existing infrastructure.

While it's true that the recession has hit the agency especially hard --the CTA gets half of its funding from retail and real estate sales taxes, receipts of which have plummeted -- the city's funding problems are largely systemic. Generating adequate revenue would require reforming the CTA's rigid funding restrictions (most notably the hefty state-mandated "recovery ratio"), rebalancing the state's surface transportation priorities, and devoting existing city resources to projects from which the public benefits. Securing those changes will take a lot of political will, which is tough to come by these days in both Springfield and at Chicago City Hall. Until then, transit commuters across the region will bear the burden.

It's no secret that the biggest barrier to creating a state-of-the-art public transportation system here in Illinois is funding. No one has made that more clear than the state's regional transit agencies, who've threatened to cut even basic services under recent doomsday scenarios. As we've pointed out repeatedly, one of the root causes of those financial problems is the way the federal and state governments divvy up transportation money. Surface projects --  namely road construction -- continue to be prioritized over mass transit. In a report (PDF) released yesterday, Environment Illinois (EI) explains how that's playing out in Illinois and across the nation:

In 2002, total revenues for public transportation provided $4.71 per transit trip from all sources—federal, state and local funding, along with passenger fares—which has fallen to $4.48 per trip in 2008 (adjusting for inflation) ... If the disparity between resources and demand continues to grow, our national transit network will become increasingly less and less able to meet the daily transportation needs of millions of citizens, as well as limit the tremendous potential energy savings and environmental benefits from public transportation.

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After years of preparation by rail advocates and months of lobbying from Illinois pols, the Illinois Department of Transportation formally submitted its application for federal high speed rail funds on Monday, as the Pantagraph reports. Officials requested $550 million from the initial $8 billion stimulus pot, money that would be used in part to upgrade railroad sidings to allow slower freights trains to pull over for faster passenger lines.

The state also wants to spend $140 million to reduce congestion around freight lines in the Chicago region and $10 million to initiate a feasibility study showing that travel times between Chicago and St. Louis could be cut to less than two hours if trains ran at speeds reaching 220 m.p.h. The Midwest High Speed Rail Association has already looked into the latter possibility on its own (PDF).

Because of the diligent work of rail advocates in the region, Illinois is in prime shape to take home the resources IDOT requested. And more money is likely to funnel down to states in the future. That's because the House already passed a $123 billion transportation and housing appropriations bill, which included $4 billion in new funding for President Obama's high speed rail initiative. "People need to understand this isn't about winners and losers," Federal Railroad Administration Administrator Joseph Szabo told the Wall Street Journal," this is simply the beginning."

Grants will be awarded beginning in late September or early October. Work could begin shortly thereafter.

Image used under a Creative Commons license by Flickr user Strychnine.

It's no secret that the region's mass transit agencies are seriously underfunded. In 2008, regional sales taxes were increased and local real estate transfer taxes were boosted by 40 percent just to avoid massive service downgrades. And while such cuts were again avoided in 2009, a recession-induced drop in sales tax revenue and discretionary funding forced the agency to close a $180 million gap through layoffs and other gimmicks (such as diverting millions in capital funds towards the operating budget). "There is no margin for error going forward,” warned Chairman Carole Brown in July.

Much of the problem is structural. The federal government has failed to make the infrastructure investments (PDF) necessary to move the U.S. into the 21st century. Furthermore, federal officials have yet to modify the ratio at which they fund all surface transit projects, which dramatically favors road construction. Locally, the CTA labors under various rigid funding restrictions, including a heavy state-mandated "recovery ratio," which stipulates that the agency has to recover 50 percent of its operating costs from riders. The state government finally passed a capital construction bill, but still transit will not receive its fair share of state resources.

During a recession, when ridership often jumps but tax revenue declines, the problem is only amplified. As a result, the system's drastic capital needs -- which Illinois PIRG pegs at $2 billion a year for the next 30 years -- are rarely met. That includes routine maintenance, fleet expansions, and route extensions to undeserved communities.

Transit advocates throughout the state are tired of the status quo.

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Even during the most contentious moments of the stalemate over the state budget this spring, one point that many lawmakers agreed on was that the federal stimulus package had provided state government with a lifeline. Without the $6.5 billion cash infusion, school budgets, roadway projects, and human services would have all but collapsed this year. And it turns out that Illinois was luckier than most. In the latest installment of the Recovery Tracker initiative, ProPublica reports that as of July 20, the Prairie State has snagged an average of $504 per person, making it the 13th-largest recipient of stimulus money nationwide. (The national average is $397 per person.)

As we've noted previously, an imbalanced formula for divvying up that transportation money put Illinois' most densely-populated areas at a disadvantage in netting the stimulus funds. Some figures that can be gleaned from ProPublica's analysis of county by county spending only confirms that unfortunate point; Cook County, for example, landed $112 per person for transportation projects, compared with downstate Stark County's $723. But while the process needs to be reformed, it's unquestionably good that any money is flowing into Illinois during the recession.

Of course, it's important to remember why Illinois is netting a large amount of subsidies. As Crain's pointed out yesterday, it's not because of luck or financial need. Ironically, it's because of poor governance:

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It's only been four months since the Daily Herald editorial board trashed the use of stimulus funds on high-speed rail (HSR) as "excessive, meaningless government spending." But this week, after Gov. Pat Quinn and governors of seven other Midwestern states announced a combined effort to build a regional network of high-speed rail lines, the paper is changed its tune:

This is how to demonstrate a visionary approach to the securing and use of federal monies. Yes, the Chicago-to-St. Louis line remains at play for hundreds of millions of dollars in improvements, but now we're talking about speeding up not just one isolated connection but every major link between Chicago and its metropolitan neighbors. [...]

All things considered, this is the kind of comprehensive thinking that makes good use of stimulus money immediately and in the long-term.

It's good to see the suburban paper get behind the idea.  That being said, the justification they offer for the shift in opinion is a bit odd. 

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Last Thursday, the House passed a $123.1 billion transportation and housing appropriations bill that included an 8 percent boost for the Section 8 housing voucher program and $4 billion for President Obama's high-speed rail initiative. It also included $1.5 million in funding for two projects requested by Rep. Judy Biggert -- a Metra Station in Tinley Park and freight-related traffic relief along Ogden Avenue in Aurora. “These important investments will create local jobs and help keep our area’s road and transit systems working for commuters,” Biggert said in a statement Friday.  “I’m very grateful to my House colleagues for recognizing the rapidly growing transportation needs of communities and centers of commerce in our suburban area.”

The Naperville Sun covered the story as well, quoting Biggert saying that the freight relief "will help to mitigate that impact and keep traffic flowing along one of our most important regional arteries." But the paper forgot one tiny detail -- along with the rest of Illinois' Republican delegation, Biggert voted against the bill.  The Sun staff report also falsely asserted that she "sponsored" the measure (in fact, she did no such thing).

Biggert's effort to have it both ways is unfortunately par for the course with House Republicans this year.  That's the story the Sun should be writing about.

Throughout the negotiations over President Obama's recovery package, Rep. Mark Kirk insisted that some form of stimulus was “necessary" to create jobs and get the nation's economy back on track. But the Republican congressman ultimately voted against the Democratic proposal because it relied too heavily on "social spending" and not enough on infrastructure projects like "highways, roads, [and] airports."

While most economists disagreed with Kirk on what constituted the most effective short-term stimulus, Kirk's point was a fair one. The nation's infrastructure is in horrible shape and well-targeted construction projects can put people back to work immediately while protecting the safety of American commuters and the environment.

But when the rubber meets the road, so to speak, there is reason to question Kirk's commitment to mass transit investments. Yesterday, we highlighted comments from Pace officials calling out Kirk for ignoring their repeated requests for federal assistance. And late last night, the North Shore Republican -- along with his colleague Rep. Peter Roskam -- voted in favor of an unsuccessful amendment to strip $4 billion in new funding for Obama's high-speed rail initiative from a broader transportation and housing bill.

Why is this money important?

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