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Initial work on RTA 10-Year Financial Plan focuses on future regional budget gaps to inform strategic solutions

June 3, 2022

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The RTA is halfway through development of the next Regional Transit Strategic Plan, which will guide the future of transit in Northeastern Illinois. This spring and summer, the agency has convened stakeholder working groups to develop plan goals, strategies, and metrics around outcomes related to transit service, infrastructure investment, and financial stewardship. In addition, two technical groups comprising subject matter experts from the RTA, CTA, Metra, Pace, and the Chicago Metropolitan Agency for Planning (CMAP) have begun to develop a 10-Year Financial Plan for the system and guidelines to advance the region’s Priority Capital Projects, both critical components of the Strategic Plan.  

The primary objectives of the 10-Year Financial Plan technical group are to establish the projected longevity of existing federal relief funding, the magnitude of annual operating shortfalls following the exhaustion of this relief funding, offer a menu of options for re-achieving balance between expected revenues and expenses, and provide recommendations to reform the region’s requirements related to the share of the day-to-day expenses of the system that must be covered by passenger fares (commonly referred to as the farebox recovery ratio). 

COVID relief funding expected to run out in 2025, budget gap identified 

RTA has been monitoring and communicating about the impact of the pandemic on the region’s transit system since April 2020.  At the end of 2021, the RTA completed allocation of $3.4 billion in federal relief funding provided to our region to help offset fare revenue losses from declining ridership due to the pandemic. As of May 2022, the region has drawn 36.2 percent or $1.28 billion of those relief dollars. The 2022 Regional Transit Operating Budget and Capital Program forecasted, and the 10-year Financial Plan technical group has now affirmed, that remaining federal relief funding is projected to last through the third quarter of 2025.  

The 10-Year Financial Plan technical group, comprised of financial and planning officers from each agency, recently estimated that beginning in 2026, the system could face a $730 million annual budget gap assuming current service levels are maintained regionwide. The stakeholder working groups, consisting of more than 100 members representing 65 organizations from across the region, will consider this and other information from the 10-Year Financial Plan as they continue their work on developing recommendations for improving transit service, equitably allocating infrastructure investment to, and ensuring financial stability of the transit system. The technical group will move on to analyzing different financial scenarios to develop a menu of options for re-achieving balance between expected revenues and expenses.  These scenarios and options will allow the RTA and stakeholders to work together not only to develop funding solutions as part of the Strategic Plan but also to work over the next 2-3 years to implement those solutions and other actions needed to ensure that seamless transit is available in the future. 

The RTA is also coordinating closely with CMAP on that agency’s Mobility Recovery project to support adaptations to the regional transportation system including policy and financial solutions to support transit given the changing nature of transportation and travel in the wake of the pandemic. CMAP’s project is expected to conclude in October of this year, providing a valuable input to the Regional Transit Strategic Plan slated to be considered for adoption in early 2023. 

Extensive public engagement on all the recommendations of the Regional Transit Strategic Plan, including the financial plan and recommended funding solutions, is planned for later this summer. Subscribe to and read the Regional Transit Update and watch RTA Board meetings for regular updates.

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Tagged in: Regional Transit Strategic Plan

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