Chicago Public Transit Merger Blues
State Legislators Want to Combine METRA, Chicago Transit Authority, and PACE Buses Into a Single Entity As Condition of Bailout
Greater Chicago’s three transit systems will face a combined $730 million budget fiscal cliff when emergency federal aid runs out in 2026. A controversial proposal to tie increased state aid to a plan to consolidate the agencies is gaining public and political support. However, agency management and some suburban leaders oppose it.
The Chicago Transit Authority (CTA) , METRA, and PACE all suffered extreme drops in ridership and revenue during the pandemic. They will all need additional public support assisstance to replace the funds now provided to them by the Uncle Sam.
On an average weekday CTA carries 577,000 persons on its buses and 400,000 on its subways and elevated trains. METRA, the region’s principal commuter railroad, serves 116,200 daily passengers, and PACE, the suburban bus system, carries 112,000 people on an average week day..
Their financial issues are not unique to Chicagoland. Last week, I wrote about the financial troubles that confront Northern California’s BART system. But ridership recovery has been slower in the Chicago area than other major markets, and critics say mismanagement and poor service are partly to blame.
Last week the Illinois Senate Transportation Committee held the last of six public hearings on legislation to create a new agency that would manage all public transportation in Cook, DuPage, Kane, Lake, McHenry, and Will Counties.
Under the plan, CTA, METRA, and PACE would be merged into the new entity, tentatively to be called the Metropolitan Mobility Authority (MMA). The Regional Transportation Authority, RTA, which currently oversees the three transit providers, would be eliminated.
The new agency’s mission would be to streamline transportation and prevent duplication of efforts and competition for state and federal funds. It would also trim administrative costs, fully integrate fare tickets, and improve service levels.
A 19-member board of directors would govern the entity. Three directors selected by the governor, five by the mayor of Chicago, five by Cook County, and one for each of the five collar counties would comprise the board.
The Chicago Metropolitan Agency for Planning (CMAP) last year recommended consolidating agencies as part of a plan for the future of regional transit. Its report was prompted, in part, by CTA’s performance since the pandemic. The agency has come under fire for not providing a “reliable, clean, timely, and safe travel option.”
The reform proposal is not an indictment of the agencies, said Sen. Ram Villivalam (D-Chicago), who chairs the transportation committee and introduced the enabling legislation in the State Senate. It is intended to update an outdated business model, he added.
“It's "making sure that PACE buses are connected to Metro (sic) stations and CTA is reliable, safe, accessible, and coordinating with all the Metro stations in the city of Chicago," he told Axios when the legislation was introduced.
Proponents say under the merger riders would no longer need to pay multiple fares. CTA, METRA, and PACE would stop competing for funds and providing duplicate service.
The consolidation plan is gaining support both from officials and the public. Illinois Gov. J.B. Pritzker, who earlier this year called for “an evolution in leadership” at CTA, came out in favor of the merger plan a few weeks ago.
The Civic Federation, an independent, nonpartisan government research organization, called on Illinois to take advantage of a “once in a lifetime” opportunity to bring the three systems under one roof. Its report said consolidation could generate up to $250 million in annual cost savings, which is more than one-third of the budgeted shortfall for 2026.
Last week, another supporter of the merger, the Illinois Clean Jobs Coalition, released the findings of a survey it commissioned. It concluded that Chicagoans support the merger by a wide margin.
The Civic Federation report contends consolidation would lead to better governance through a centralized board with fewer appointees. Currently the four agencies – RTA, CTA, METRA and PACE – have 47 director positions among them chosen by 12 elected officials, meaning the boards are providing homes for patronage.
“If there were proper accountability systems in place, the politics will have less of an impact,” said Citizen Federation President Joe Ferguson. “We’re talking about rewriting laws to require qualifications on the boards and for people in senior positions managing the system itself.”
Ferguson was critical of CTA’s board, which, he said, was made up largely of political appointees. The board has not conducted performance reviews of CTA President Dorval Carter and lets him work without a written contract. Meanwhile Dorval’s yearly salary has climbed 60 percent to $376,000.
Carter, Metra CEO Jim Derwinski, Pace Executive Director Melinda Metzger, and RTD Executive Director Leanne Redden all oppose the merger. They contend it wouldn’t produce the savings merger advocates hope for. Further, it does not address the inadequate public transit funding mechanism. They point to chronic underfunding, rather than the state of their organizations, as the cause of their woes .
CTA argues the funding formula that has been in place since 1983 does not consider that the agency generates far more rides than METRA and PACE combined. “We provide 84% of the region’s rides, and yet we get less than half of the funding to support that,” noted Tom McKone. CTA’s CFO.
At the same time that Carter wants a large share of funding direction to his agency, suburban counties want to hold onto the support now directed to METRA and PACE. Municipal officials from McHenry County fear their voices will be diluted in a consolidated agency.
John Reinert, a member of the McHenry County Board, said CTA should be kept apart from the other systems. “Chicago should stay Chicago,” he said, adding that the proposal would be like merging Chicago schools with Crystal Lake schools.
Carter said the “solution to the Chicago area’s public transportation woes isn’t merging CTA, Metra and Pace into a single entity — it’s finally tackling the “decades-long, discriminatory and racially charged funding policies” that have left transit agencies “fighting over scraps.”
He added that if the Illinois General Assembly does not solve the funding issue before next July the agencies will have to start planning service cuts of as much as 40 percent. CTA still hasn’t recovered from ridership losses stemming from reductions during the 2008 financial crisis, Carter said.
Another funding issue the transit systems want resolved is a 50 percent farebox recovery mandate they say is no longer realistic due to the drop in ridership. The mandate means the state aid will only match fare revenue. “Nobody in the country has a 50 percent farebox recovery ratio like we do; it’s obsolete,” said RTA chair Kirk Dillard.
While RTA wants to see better coordination among its three operating entities it has no enforcement power and can only offer suggestions. “In the fare policy space we are actually specifically precluded from setting fares and creating fare policy for the three boards,” Redden said. She argues giving RTA power to set fares, establish policy, and oversee capital projects would enable the agencies to focus on day-to-day operations.
Clearly the status quo in Chicago does not work for riders or taxpayers. Consolidation will, in all likelihood, bring about economies of scale, and better governance, but it does not guarantee better service. That calls for more funds so the systems can invest in infrastructure, rolling stock, and technology, as well as visionary leaders who can start Chicago down the path to a true 21st Century transit network.