Why fully funding paratransit service and reduced fare programs is key to closing the transit budget gap

With transit facing a fiscal cliff in the coming years, fully funding critical programs like ADA paratransit service and free and reduced fare programs is one key to closing the budget gap. These legislatively mandated programs have been drastically underfunded by the state and federal government for decades, forcing agencies to use general operating revenue to cover the bulk of the cost. This shrinks the pool of funds that can be used to support frequent and accessible bus and train service across the region.

RTA’s 2024 State Legislative Agenda outlines how the system needs increased public funding for transit operations to avoid severe cuts and dramatic fare increases and improve and expand service.

Elected officials are taking some action, but more is needed. In his proposed fiscal year 2025 Budget and State of the State Address, Gov. JB Pritzker proposed small increases in funding for ADA paratransit service and free and reduced fare programs – a combined $2.8 million more than previous budgets. But this additional support is insufficient to address the chronic underfunding the system has faced for decades.

What is the fiscal cliff?

In early 2026, northeastern Illinois’ transit system will face a projected fiscal cliff of $730 million. At nearly 20 percent of the annual operating budget, this gap, if unaddressed, would lead CTA, Metra, and Pace to drastically cut service, raise fares, or both.

The current state of funding for ADA paratransit

Nearly 60,000 of the region’s most vulnerable residents rely on ADA paratransit service certified by the RTA to get where they need to go. This point-to-point service provided by Pace is available to people living with a disability who can’t access regular, fixed-route transit. As this is a federally-protected civil right for these riders and a federally mandated program, failure to provide this service jeopardizes all federal grant funds to the region.

Paratransit riders pay $3.25 per trip, however, the actual cost of delivering this service is more than $40 per trip. In 2024 the state budgeted $9 million to support ADA paratransit service in the Chicago region – less than 4 percent of the total cost: $249 million. This is not enough to support the more than 4 million annual ADA Paratransit trips in the region, which represents 95 percent of pre-COVID demand. Given the Chicago area’s aging population, these numbers are expected to rise in the coming years – and funding should rise with it.

The current state of funding for free and reduced fare programs

More than 315,000 riders rely on free and reduced fare programs certified by the RTA that offer discounted fares to older adults and people with disabilities, and more apply each day as the system continues to grow ridership. The cost of delivering these services will increase with demand and is expected to grow by millions of dollars in future years. The state committed $18.9 million in annual support of free and reduced transit fares starting in 2024, less than 20 percent of the current $100 million estimated program budget and less than 13 percent of the $150 million total it would cost to also expand programs to riders experiencing low incomes across CTA, Metra, and Pace.

How funding paratransit and fare programs relates to the fiscal cliff

As outlined in the charts above, the state contribution for ADA paratransit and free and reduced fare programs is far below the actual cost. General fare revenue often makes up the difference to keep these essential services running, placing an unfair burden on riders as the region attempts to build a funding structure less reliant on fares. By fully funding mandated ADA paratransit service and free and reduced fare programs, the state would eliminate more than $325 million of the projected fiscal cliff. The governor’s proposed FY25 budget makes a small first step toward this goal; but ultimately the system needs an increase in annual operating funding to fill the $730 million budget gap anticipated in 2026, and nearly $1.5 billion in new annual funding to realize expanded and improved service consistent with regional priorities.

Policymakers are clear: free and reduced fare programs must be expanded

As underfunding of existing free and reduced fare programs persists, riders and lawmakers continue to seek to expand them. Last year the General Assembly called on RTA to conduct a free and reduced fare program study looking at the impact of existing programs and how they could be improved, such as expanding the program to include people experiencing low incomes.

The RTA, Metra, and Cook County are taking immediate action and partnering to extend reduced fares to Metra riders experiencing low incomes regionwide through the Access Pilot Program. Supplemental Nutrition Assistance Program (SNAP) recipients living in the region are eligible to apply for more affordable transit at GetAccess.org. The program opened on February 1, 2024, and will run through July 31, 2025, with the potential for extension and expansion to include CTA and Pace if the state commits additional funding.

As part of Illinois’ 2023 Transit Omnibus legislation, the RTA distributed $500,000 in free fare cards to survivors of gender-based violence through a partnership with The Network: Advocating Against Domestic Violence — an Illinois membership organization advocating to end domestic violence through training, education, and policy advocacy.

Several new initiatives to provide free and reduced fares to a variety of riders have been introduced in the legislature this year, as well. Proposals include income-based free fares using Medicaid eligibility as a qualifier and expanding the current Ride Free program to more individuals based on income.

The RTA and transit operators are committed to expanding free and reduced fare offerings to riders experiencing low incomes and have made considerable progress using the limited funding available. For the system to consider expanding current offerings, however, new and sustainable investment is needed.

**Join the Transit is the Answer Coalition**

The RTA is working with policy makers at all levels of government to continue to raise awareness of these critical programs, the extent to which they’re underfunded, and how increasing contributions from the state helps address the long-term fiscal cliff. Join the Transit is the Answer Coalition to help bring about the legislative changes needed to support transit at this pivotal moment.

This blog is one in a series exploring RTA’s 2024 State Legislative Agenda, which presents a policy framework to fully fund, reform, and improve our region’s transit network.