The Taxpayers’ Federation of Illinois and the
Regional Transportation Authority agree that a change to Illinois’ sales tax
law will net the RTA an additional $150 million this year and another $225
million next year. That money will drastically reduce the impact of the
looming $770 million “fiscal cliff,” which begins in January.
The extra revenue was a result of the state
expanding its sales tax to include more online purchases.
In an internal RTA document, the transit
agency mulls spending $44 million of that additional money this year on ADA
Paratransit operations and appears to leave the door open to even more spending
expansions.
Several months ago, the RTA claimed that its
paratransit costs contributed $239 million to the looming $770 million fiscal
cliff because the state only kicked in $10 million to the federally required
program that provides heavily subsidized rides to people with disabilities who
cannot use fixed-line transit. The RTA has been receiving huge federal
dollars since the pandemic, but that money runs out at the end of this year.
So, the RTA believes spending the $44 million
is justified because paratransit is supposed to receive a set portion of sales
tax revenues. “In 2025, the paratransit expenses are over-budget and it is
the fiduciary responsibility of the RTA and the Service Boards to address that
gap with available funding this year,” said RTA spokesperson Rob Nash.
However, the internal document also seemed to
leave the door open a bit to using that new money for other purposes. “A
subsequent vote by the Board would be needed to direct those funds to ADA
Paratransit funding or other budget amendments via an appropriations
ordinance.”
Asked about further spending, Nash said the
sales tax expansion “is contributing to positive budget variance (PBV) or
operating reserves at each operating agency after covering their monthly
operating expenses.”
Either way, some key legislators involved in
the mass transit reform talks don’t want the RTA to spend that unexpected $150
million now, preferring the agency to wait until final legislation is approved
and when the money can be used to alleviate the fiscal cliff’s costs.
“We need everyone at the table offering and
working on solutions to avoid the fiscal cliff that threatens transit services
people rely on and increasing spending right now does not advance that goal,”
said Rep. Eva-Dina Delgado, D-Chicago, one of two House Democratic transit
negotiators.
“Just like Springfield has a duty to fix the
bigger problem, the RTA has an obligation to treat this moment with discipline.
It’s crisis cash, not extra spending money,” said the other House Democratic
negotiator, Rep. Kam Buckner, D-Chicago.
One of the biggest obstacles to solving this
transit problem is coming up with the money. The new sales tax revenue
will help, but there’s still a long way to go.
And some major players are stepping up to
complicate matters.
The Illinois Realtors Association has dumped
an unprecedented $300,000 into a special campaign committee that is running an
online “consumer awareness campaign” slamming some Democratic legislators ahead
of the fall veto session.
The online ads are targeting five state
Senators and 21 House members, a spokesperson for the statewide group
said. The Senate passed-bill was declared “dead on arrival” in the House
by Speaker Chris Welch, but House members are bearing the brunt of the attacks
likely because the bill is now in their chamber.
An ad whacking Sen. Laura Ellman, D-Naperville,
is particularly harsh. Ellman voted for the Senate’s mass transit
reform/funding bill at the end of the spring session. That bill included a
suburban real estate transfer tax which was expected to raise millions to fund
mass transit programs.
The online spot features a photoshopped image
of Chicago Mayor Brandon Johnson and Sen. Ellman standing in a commuter train
as $100 bills float in the air around them.
“Senator Ellman voted to raise your property
transfer taxes to bail out Brandon Johnson’s failing CTA,” the ad tells
readers. “Tell her to stop this crazy plan.”
The click-through link leads to this message:
“In the final hours of voting in Springfield, Illinois, Senators passed a 600% property
transfer tax on families, targeting ONLY the suburbs. The intended recipient of
these new taxes? Mayor Brandon Johnson’s Chicago Transit Authority.”
“The proposed real estate transfer tax
increase ignores the glaring reality of the state’s housing economy,” said
Illinois Realtors CEO Jeff Baker via press release. “This would add
thousands of dollars of closing costs to every residential and commercial
transaction in the Chicagoland area, slowing our real estate economy even
more.”