What’s next for the transit fiscal cliff: RTA works with Service Boards to delay service cuts, continues push for…

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On May 31, the Illinois General Assembly adjourned its spring legislative session without taking final action on transit funding or reform. Since then, the RTA has worked collaboratively with the Service Boards toward the shared goal of delaying any potential service cuts resulting from a long-forecasted 20% budget gap for 2026. A secondary but equally important goal for the agencies is to provide as accurate information as possible to riders, residents, and lawmakers about the size of the cliff, how peer agencies are handling similar budget shortfalls, and how legislation proposed during the 2025 legislative session could impact the transit system and riders.

To accomplish this, the RTA has worked with the Service Boards to establish a process and timeline for developing the 2026 Regional Transit Budget, which will include an update to the fiscal cliff and information about potential reductions to service because of the funding shortfall. Information about the fiscal cliff, potential service cuts, public meetings, and other ways for riders and residents to provide feedback to the agencies and lawmakers will be regularly updated on the agency’s new Regional Transit Fiscal Cliff Hub.

Additionally, the RTA has compiled a review of how peer regions are working to solve their fiscal cliffs, which every large legacy transit system in the U.S. is facing, as well as completed initial analysis of key components of the currently proposed legislation. This blog will summarize where these issues stand as of August 2025, but readers are encouraged to visit the Hub and to subscribe to the Regional Transit Update for the latest information.

How we got here

Since development of the RTA’s regional transit strategic plan Transit is the Answer beginning in 2022, the agency, Service Boards, advocates, and stakeholders have been ringing the alarm that the regional transit system will face a 20% budget gap in the 2026 operating budget. This is a result of chronic underfunding of the system, overreliance on fares, inflation, and changing ridership patterns—all exacerbated by the COVID-19 pandemic.

In 2024 and 2025, the RTA and the legislature held dozens of meetings, hearings, and events to continue to prepare for the fiscal cliff. Some advocates backed a proposal to fully consolidate the transit system and create a new unified agency with the introduction of the Metropolitan Mobility Authority Act in 2024 and reintroduced in 2025. Earlier this year a coalition of organized labor groups worked to introduce the United We Move bill, and RTA released its Transforming Transit proposal and legislative language. Both the Labor and RTA proposals empowered the RTA with additional authority in key areas like fares, safety, and capital and service planning. The legislative session ended with no action by the State to fill the funding gap, requiring the RTA to begin the 2026 budget development with a 20% gap that could potentially result in a 40% cut to transit service regionwide.

Developing the 2026 Regional Budget: determining the size of the fiscal cliff and timeline for potential service cuts

The RTA has been tracking and updating the forecasted fiscal cliff annually as part of its budget development since 2022. The size of the budget gap or fiscal cliff depends on many financial variables, including Service Board spending and service delivery, farebox revenues, and sales tax receipts impacted by the larger economy. Additionally, a change in State law in January of 2025 extended local taxes, including the RTA sales tax, to more online transactions. With only the first quarter receipts, the estimated increase of RTA tax revenue is currently forecasted to be $150 million more for 2025, which will impact the 2026 budget gap number.

To consider these variables collaboratively with the Service Boards, in June the RTA called for a Fiscal Cliff Budget Task Force, led by RTA staff with membership from staff at CTA, Metra, and Pace to collectively develop funding forecasts and timelines for action, especially actions that may impact riders. The Task Force meets every two weeks through the budget season with a goal of updating the size and timing of the projected shortfall, identifying potential efficiencies, and finding opportunities for further collaboration.

At its July meeting the RTA Board formed a Fiscal Cliff Ad Hoc Committee to help guide policy discussions on budget, funding, and reform. The Ad Hoc Committee consists of Board members and leadership from each Service Board and is led by RTA Chairman Kirk Dillard.

The collective goal of the RTA and Service Boards is to work together to delay any service cuts and impacts to riders that may occur because of the fiscal cliff for as long as possible within the constraints of current law.

Continued push for sustainable funding and reform

The House and Senate introduced new legislation in the final days of the 2025 session that would reorganize the transit system under a regional authority renamed the Northern Illinois Transit Authority (NITA). The Senate version of House Bill 3438 included more than $1 billion in revenue, based on estimates from Senate staff. This bill passed the Senate but was not called in the House for a vote.

While certain aspects of the bill—including this level of additional funding—are key to providing transit service riders deserve, RTA identified potential issues the legislation may introduce for maintaining and improving service if it were to become law as written. RTA staff shared this analysis at its July Board of Directors meeting. Key concerns discussed included:

Potentially unstable and delayed funding
Costs for new system responsibilities could impact service frequency and reliability
New regional entity lacks discretion and ability to implement consequences
Funding distribution is pre-determined for first several years
Recovery ratio requirement remains unlikely to be met

To inform legislators’ work, RTA staff also shared analysis of how peer regions are working to solve their budget gaps. One key finding of that analysis is that Illinois is the only state with a major transit system facing a budget gap that has yet to take action.

What happens next? Join the Transit is the Answer Coalition.

Governor Pritzker and legislative leaders say they intend to continue to work on transit funding and reform through the summer and into the fall, but a firm timeline has not been set for any future action.

As legislators consider their next steps, RTA will continue to advocate for a swift, transparent, and inclusive process that gives the public and key stakeholders the time needed to review major policy changes and provide feedback and input on how it will affect them and their constituents. Join the Transit is the Answer Coalition to stay involved in advocating for sustainable transit funding and reform.