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Three big city transit system leaders explained how they tackled revenue shortfalls and put their systems on a stronger footing during an Oct. 5 panel session at the American Public Transportation Association’s TransForm conference in Chicago.
Saving Chicago from a fiscal cliff
“In 2023, we all saw the crisis coming,” said Thomas McKone, chief financial officer and treasurer of the Chicago Transit Authority. The region’s transit system, which also includes Metra commuter rail and Pace suburban bus services, was facing a 2026 budget gap of more than $770 million, which will increase to $1.2 billion in 2027 without additional funding.
“From where we were sitting, we were highlighting the value of traffic and the essentials of the services and the system that we provide,” McKone said. “It is clear that the number of users would not return to pre-pandemic levels, at least not in the short term.”
Without additional funding, the regional transit system faced substantial fare increases, drastic service cuts or both, the Northern Illinois Regional Transportation Authority warned by 2022. The RTA turned to the state legislature for help. “A lot of the lawmakers didn’t just look at American examples, they looked at European examples of what transit service could use in the region,” McKone said.
The result was $1.5 billion in funding for transit agencies and support for transit-oriented development. The legislature also restructured transportation management of the Chicago region under the Northern Illinois Transit Authority.
The price of New York’s congestion pays off
New York’s controversial congestion pricing program stems from a 2019 state law designed to reduce traffic congestion in Manhattan and generate revenue for the New York Metropolitan Transportation Authority. Since then, the state has defended the Trump administration’s demands and hostility toward the program.
“Before the program was launched, there was a fear that businesses would close and the sky would fall,” MTA Chief Financial Officer Jai Patel told the panel. None of the dire predictions came true. “In the first year after implementation, the region’s economy remained strong.”
Patel added that the number of commuters traveling through the system increased while vehicle noise complaints, crashes, injuries and traffic deaths decreased.
“Congestion pricing has met its revenue expectations and cost less than we had anticipated in operating expenses,” Patel said. The program “was proof that government can do things better and bigger.”
Seattle: Trains Across the Water
In March, the world’s first floating light rail bridge carried trains across Lake Washington, connecting downtown Seattle with Mercer Island, Bellevue and Redmond, Washington. With the Crosslake connection, light rail now carries more than 160,000 riders daily, said Victoria Baecher Wassmer, Sound Transit’s assistant general manager of finance and business administration.
A ballot measure approved by voters in 2008 authorized Sound Transit to build the line and add regional express bus and commuter rail service. Additional funding for the transit agency comes from a sales and use tax, excise tax, car rental tax and property tax, Wassmer said. “Strong financial policies and management practices show that we are responsible stewards of taxpayer resources,” he said.
According to Wassmer, the FIFA World Cup games in Seattle saw a record crowd on the system. For the July 6 game, the system had 312,000 boardings, “which is really extraordinary,” he said.
The agency has ambitious expansion plans through 2052, Wassmer said. “We’re going to almost double our track miles and make some changes to our commuter rail and add bus rapid transit.” The plan, funded by a 2016 ballot initiative, has had to adjust to rising inflation costs. While some projects are being delayed, all light rail projects are moving forward, according to a May 29 update.
