History of transit reform in the Chicago region

April 10, 2025

Chicago's transit system is facing a fiscal cliff in 2026 that will mean drastic service cuts across CTA, Metra, and Pace. The RTA is advocating for additional funding to ensure our transit system can not only survive, but thrive. We need your help. Send a letter to your legislators at SaveTransitNow.org.

Public transit in the Chicago region has been underfunded for decades and the crisis we face today is not the first that has challenged the system. The current conversations on transit reform and funding are also not new, but a continuation of a larger regional conversation that has evolved over the past several decades. This historical context is important to understanding the dynamics at play as the Chicago region faces a fiscal cliff that would lead to 40% service cuts in 2026. Over the past 50 years, the structure of our region’s transit system was changed several times to reflect its evolving transportation landscape and unique political dynamics—all with the goal of providing stability to transit funding so that riders have a reliable service network.

1974: The RTA is created to unify a fractured and failing transit system

Transit before the RTA consisted of the CTA in the City of Chicago and a patchwork of private suburban bus and rail companies—all of which were under financial duress. At the time, the CTA was charging the highest fares in the nation to keep itself afloat, and the suburban service providers were either going bankrupt or compromising capital investment to support operations.

The RTA was established by a regional referendum that narrowly succeeded due to support from voters in Chicago and Suburban Cook County who were more likely than collar county residents to rely on the transit system at the time. The RTA was established with two operating divisions for suburban bus and commuter rail service, funded by a 5% gasoline tax and additional state funding. In 1979 the highly unpopular gas tax was replaced by a regional sales tax, levied at a higher rate in areas with more service, and the additional state funding was ended. Due to economic conditions at the time, the new sales tax yielded much less revenue than the gas tax did. Combined with the loss of state funding, the region’s transit system was set up for a financial crisis.

In 1981, this financial crisis came to a head. Commuter rail operations were slashed and fares doubled. Suburban bus service was completely suspended in some areas, and the City of Chicago provided the CTA with $20 million in one-time funding to avoid a complete shutdown of its own. Later, in 1982, the RTA sought the reinstatement of state funding, but lawmakers deferred and instead permitted the agency to borrow $100 million as a temporary measure.

1983: The RTA as a regional oversight agency

With transit’s financial crisis reaching a breaking point, lawmakers had to act to avoid further disruption to the system. Two major reform packages were passed in 1983, establishing the RTA as a regional oversight agency and charging the newly formed Metra and Pace with delivering suburban service, which had become increasingly more in-demand as the suburban population boomed. The reforms also re-established state funding support with a 25% match of the regional sales tax. In exchange, lawmakers implemented a 50% farebox recovery ratio requiring the transit system to generate half of its operating revenue from fares—this requirement remains the highest in the nation today. The sales tax was also amended with most of the funds now going to the Service Boards based on a geographic formula, and a smaller portion reserved for the RTA and suburban bus service.

In addition to changing transit’s funding distribution, state lawmakers also restructured the RTA Board of Directors, with five of 13 members appointed from the City, four from Suburban Cook County, and four from the collar counties.

2006-2015: Balancing regional perspectives and fare integration

In the mid-2000s, another financial crisis loomed over the region’s transit system: the costs of providing federally mandated ADA paratransit service. Paratransit, which is an on-demand service, is more expensive to operate than fixed-route service and put financial pressure on the CTA, which at the time delivered both. In 2006, Pace assumed all ADA paratransit responsibilities for the region. In 2008, another regional sales tax was levied to fund paratransit service. The new sales tax was again charged at a reduced rate in the collar counties, and a portion of sales tax was provided to the collar counties to be spent on transportation priorities and public safety. The new revenue was significant, but did not resolve the issue of persistent underfunding and cost increases. The final act also included a significant expansion of free and reduced rides without providing additional funding to support the mandate. The funding agreement also did not diversify the system’s operating funding sources, leaving service levels highly vulnerable to the economic recession that arrived later that year.

The RTA and Metra Boards of Directors were expanded to include additional suburban representation, reflecting population growth and shifts, as well as a three-quarter supermajority voting requirement on all major decisions. With the supermajority requirement, the RTA Board would be better positioned to balance regional and local perspectives on the six counties’ diverse transit needs. The 2008 reform also gave new authorities to the RTA, but lacked detail on implementation and enforcement, simply pointing to the development of the strategic plan every five years as the opportunity to evaluate progress on system goals.

Toward the goal of fare integration, since the 2008 reform, paying for transit has become increasingly more connected and regional. In 2011, the region began the transition to the Ventra card for CTA and Pace fares. In 2015, Ventra expanded to Metra and became available on mobile devices with the Ventra app. Using the app, riders in every part of the region can access fares for all three Service Boards and tap-to-pay on CTA and Pace.

In recent years the agencies have worked together to fully integrate CTA and Pace fares and enhance links to Metra service. Transfers between CTA and Pace are free within two hours using a Ventra card and all unlimited ride passes are valid on CTA and Pace. More than 85% trips on the regional system are on CTA and Pace, meaning most riders are experiencing a fully integrated fare payment trip today. The main remaining obstacle to full fare integration is to fully integrate transfers between Metra trips, which vary in price depending on length and are less likely to include transfers, and pay-per-trip CTA and Pace rides.

This is a missing link in most regions in the U.S. including New York and Boston, and Chicago has gone further than most in introducing the monthly Regional Connect Pass and coming Regional Day Pass, which provide unlimited rides on all three services. The RTA is also advocating for enhanced authority to establish a regional fare policy, which would include a new, unified app and rider hub to ensure seamless transfers between the region’s service providers.

2025: Empowering the RTA to improve service, unify fares, and determine regional priorities

Once again, the conversation on transit reform has been rekindled by an external financial crisis. When the COVID-19 pandemic broke out in 2020, riders began to use transit less, reducing fare revenue. This phenomenon impacted transit systems around the world and the troubling trend led to the federal government providing transit systems across the nation with temporary relief funds. While many systems have already used their federal relief funding, the RTA has preserved it for the time being. But these funds are projected to deplete in early 2026, meaning that lawmakers must act before they adjourn the current legislative session to avoid service cuts.

While the region faces a $771 million budget deficit, the RTA, other agencies, and stakeholders are advocating for $1.5 billion in additional annual operations investment. This will allow for service improvements, like shorter wait times, and reforms to better integrate the region’s transit network, like a centralized customer service and fare purchasing app. While the 2008 reforms lacked clear statutory authority for proposed RTA requirements, the agency has released a plan to empower it to set service standards for transit providers, create a regional fare policy, and better manage the capital plan to prioritize regional projects—allowing the RTA to carry out meaningful oversight and the Service Boards to focus efforts on day-to-day service delivery.

With each major reform our region has consistently moved toward a consensus-based governance structure to ensure that riders in every part of the region have a stake in the system that serves them, and that an accountable, transparent oversight agency is there to manage that system responsibly. Transit stands at a critical pivot point, and the RTA is well positioned to take on the responsibilities needed to build on the last 50 years’ progress.

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The RTA is working with policy makers at all levels of government to develop sustainable funding solutions and improve the system for all riders. Become a Transit Champion to help bring about the legislative changes needed to support transit at this pivotal moment.