Transportation Tuesday Recap – What’s next for the transit fiscal cliff: A conversation between Chicago and…

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Beginning in 2026, the RTA system is facing a fiscal cliff, growing to 20% of the operating budget in 2027 and 2028. 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. The Chicago region is not alone; systems across the country faced or are facing similar budget gaps as they spend down COVID-era federal relief funds and grapple with lasting changes in ridership patterns.

For the final Transportation Tuesday webinar of the year, RTA Executive Director Leanne Redden was joined by Jody Holton, AICP, Chief Planning and Strategy Officer from the Southeastern Pennsylvania Transportation Authority (SEPTA) for a conversation on the most up-to-date information on how Philadelphia and Chicago are each facing their looming fiscal cliffs.

Maulik Vaishnav, RTA Senior Deputy Director of Planning and Capital Programming, kicked off the webinar providing a brief overview on the current transit challenges in Chicago and Philadelphia, comparing and contrasting the systems and their budget timelines. While Chicago is projected to hit its fiscal cliff in 2026–2027, SEPTA already confronted its cliff in 2024–2025 and had to implement service cuts before taking the unprecedented action of using money intended for their capital program to fill their budget gap on the operations side after being given permission to do so from the legislature.

Redden followed the presentation by asking Holton a series of questions related to efficiency efforts, service cuts, funding strategies, and advocacy that is ongoing in Philadelphia.

To save costs and maximize efficiency in light of the fiscal cliff, Holton explained that SEPTA created an Efficiency and Accountability Program in 2021 and implemented austerity measures like hiring freezes, pay freezes, and cutting company travel, which helped the agency save about $120 million.

While implementing these efficiencies, SEPTA still prioritized investing in system improvements like developing a transit police force, hiring cleaners for stations and fleet, and enforcing non-smoking regulations. Holton stressed that implementing these cost-savings and focusing on safety and cleanliness was both good for riders and, combined, demonstrated good stewardship and built trust with lawmakers.

“To have faster, more efficient services, we need more investment,” Holton said. “‘Why should I invest in SEPTA?’ People used to say it’s unsafe and dirty. We were able to come back swinging and say: No, it’s not unsafe, it’s not dirty anymore.”

Facing its cliff, SEPTA drafted plans for multiple rounds of service reductions. The first round consisted of a 20% reduction in service followed by a more drastic 45% service cut across the system. Since SEPTA is a single unified agency, service cuts and planning decisions are evenly applied across modes and counties, which helps coalition building and ensures equity compliance. In contrast, Redden explained, Chicago’s transit structure makes allocating funds and communicating timelines for fiscal cliff impacts more challenging to manage and to explain to lawmakers and the public.

Both leaders went on to emphasize the unsustainability of short-term funding solutions, such as shifting capital funds to operations. Shifting dollars from long-term infrastructure needs to short-term operating budgets may delay the impact of an agency’s fiscal cliff but worsen long-term maintenance issues and reliability. Redden and Holton acknowledged that while SEPTA and the RTA have unique structures, the overarching challenge is the same: transit cannot be sustained without new, stable funding streams. Efficiency and innovation help, but action from legislators is essential.

The conversation concluded with Redden and Holton underscoring the importance of transit champions and advocacy groups, stating that riders’ voices can help push lawmakers to act. Being transparent with riders on the funding crisis, especially communities that may be most affected by potential service cuts, draws more attention to the fiscal cliff, ultimately influencing the decisions made by state legislatures.

Take action for better service across the region

Go to SaveTransitNow.org to sign a letter telling lawmakers we are one region and CTA, Metra, and Pace all deserve sustainable funding. With sustainable funding and strategic reform, we can better serve all riders and residents with high-quality transit service.