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Illinois House Democrats weigh new transit funding plan, eye billionaire and streaming taxes

Jeremy Gorner, Olivia Olander and Talia Soglin, Chicago Tribune on

Published in News & Features

SPRINGFIELD — Illinois House Democrats began pushing Tuesday for their own plan to provide an overhaul of the Chicago region’s mass transit systems, holding firm against plans to install a new fee on food deliveries and a real estate transfer tax and floating a menu of potential options to raise $1.5 billion in new revenue.

With time running short in the General Assembly’s fall veto session yet needing to pass some legislation to stave off job cuts and service reductions, key House Democratic negotiators said they were weighing several alternatives to the fees and taxes included in a bill that cleared the Senate in the eleventh hour this spring but failed to pass the House.

Among the ideas the Democratic-led House was considering included a sales tax, a tax on streaming services and a tax on unrealized gains on billionaires’ assets — known in shorthand as a billionaire’s tax, key lawmakers said. The goal was to assemble enough new funding to secure the $1.5 billion advocates say is needed to adequately fund the Chicago Transit Authority, Metra and Pace.

“This is a big generational bill. This is the most comprehensive and consequential transit legislation in the history of this country. And we’re going to be able to do this, and we’re going to be an example,” state Rep. Kam Buckner of Chicago promised Tuesday while speaking to reporters.

But as of Tuesday evening, Democrats hadn’t yet introduced their legislative proposal, so specifics remained elusive.

Buckner, one of the House’s lead transit negotiators, said he hoped a bill would be filed by late Tuesday. He added that Democrats in the House want to avoid a package of taxes they considered regressive, or those that hit less wealthy people harder than wealthier people.

Members also wanted options that could fund transit for both downstate and the Chicago region, he said. But with the fall session set to end Thursday, timing remained a key issue, along with the details of any proposed legislation.

“Our process in the House is that every time we have something that’s complex or difficult, we have to give everybody a chance to hear the different sides, ask a lot of questions — so that’s what we did here today,” said state Rep. Eva-Dina Delgado of Chicago, another lead transit negotiator. “And I think people got all their questions out, and we still have, what, two days left.”

The moves come after the Senate bill in the spring legislative session never made it through a reluctant House, whose members weren’t ready to vote on a statewide $1.50 fee on food deliveries and a real estate transfer tax for suburban Cook County and collar counties.

Any proposal introduced in the House that’s different from what the Senate passed in the spring will have to pass through both chambers before the end of the day Thursday to advance this year.

Passage of any legislation to address mass transit issues has been placed on the front burner of the short legislative session.

Gov. JB Pritzker has said he’d like to see a deal get done, though he’s dodged backing specific revenue proposals he would support to help pay for his desired “world-class transit system for the whole state.”

He did so again at an unrelated news conference Tuesday in Peoria, where he noted House lawmakers have been meeting privately “to determine what it is they could tolerate.”

“Revenue is always hard to raise for anything, even when you know it’s hyper-important, and so they’re still considering what those things are,” Pritzker said. “I’ve tried to be careful about what I’ve told them because I want to make sure that they are considering all the options.”

The CTA will have to cut bus and train service by as much as 25% if lawmakers don’t find more funding, the agency has warned. The cuts would be the “single-largest transit service cut in the modern history of the Chicago Transit Authority,” its acting president, Nora Leerhsen, warned earlier this month.

Without more money, the CTA has said, service cuts will begin in August of next year. That’s even with a proposed fare increase of 25 cents per ride to take effect Feb. 1.

The Regional Transportation Authority, which oversees the CTA as well as sister agencies Metra and Pace, has long warned that the looming structural fiscal deficit will devastate mass transit in the Chicago region if lawmakers in Springfield don’t raise more money.

For months, the RTA said the budget gap next year would total around $770 million. But less than two weeks before the start of the veto session, the agency sharply revised that projection downward, saying the deficit next year was only around $200 million, a difference it attributed mostly to an expansion of state sales tax.

Still, the RTA said, the gap would balloon back up to about $790 million in 2027 and beyond.

 

But the last-minute revision left transit advocates, labor and key lawmakers befuddled and frustrated.

On Tuesday, Buckner acknowledged how he and other lawmakers have been skeptical of the RTA because of the agency’s altered fiscal cliff projections. But he said that’s not a reason to “turn away and not do this.”

“It’s proof positive that we’ve got to find a way to fix this system. If RTA can all of a sudden come up with $500 million that wasn’t there two months ago, that means that there’s some accounting issues there, that means there’s some transparency issues there and some accountability issues there,” he said. “And so, this gives me more confidence that what we’re doing is the right thing and we have to do it now.”

Transit leaders at the RTA have defended themselves.

“We don’t change the numbers for political purposes or agendas. We tell it like it is,” RTA board Chairman Kirk Dillard said at the agency’s October board meeting last week. “We, through excellent management and better sales tax numbers than we thought, have pushed this fiscal cliff for a while, but it hits in full fashion in a year.”

The CTA is expected to hit the fiscal cliff — which is caused by the depletion of federal pandemic aid and ridership numbers that simply haven’t recovered to pre-pandemic levels — before Metra and Pace. Neither of the latter two agencies expects to cut bus or train service next year.

The RTA argues it has done what it can to delay the impact of the cliff, such as mandating all agencies raise fares next year and transferring $74 million from Metra and Pace to the CTA.

One labor leader said that while there was support for the Senate version of the transit bailout, he understood that Democratic lawmakers in the House were mulling as many as 20 revenue options, including the billionaire tax and an amusement tax on various forms of entertainment.

The official, Marc Poulos, executive director for the Indiana, Illinois, Iowa Foundation for Fair Contracting, said he has a “decent level of confidence” that a House transit proposal can make it through the General Assembly by the end of the week.

“Labor could live with the bill that passed out of the Senate,” Poulos said. “But in the interest of how do you solve … a multi-billion-dollar problem like this, sometimes you’ve got to live with what you get, right?”

The bill that passed the Senate in the spring would replace the RTA with a new entity called the Northern Illinois Transit Authority, which would have broad planning authority, including for fare policy and service planning. The bill sought to address concerns from suburban interests that they don’t have enough say in regional transit governance, and from others who decried the current structure as overly complex.

Asked at an unrelated news conference if it would be fair for suburban residents to pay more taxes to fund the transit system, state Senate Republican Leader John Curran, who represents a swath of west suburbs, said Tuesday it makes more sense to look at reforming the operational structure of the system before determining how much funding is necessary.

Throughout Tuesday afternoon, transit advocates continued to lobby legislators along the railing outside the House chambers, including a line of five people each dressed as one car in a cardboard CTA train costume with the phrase “FUND TRANSIT NOW!!” Advocates planned to use the costume to deliver petitions to lawmakers, said Kyle Lucas, executive director of the group Better Streets Chicago.

Tony Pham, a 22-year-old dressed as the end of the train, said he came to push for state investment in transit after moving to Chicago from Arlington, Texas, this year.

“I don’t want to be forced to drive again like I did back in Texas,” Pham said.

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(Chicago Tribune’s Dan Petrella contributed. Soglin reported from Chicago.)

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