Illinois transit farebox recovery ratio requirement is uniquely high and harms riders

Since the release of the Transit is the Answer strategic plan in 2023, RTA has consistently advocated for lasting change to Illinois’ 50% farebox recovery ratio requirement for Chicago’s regional transit system. The requirement caps the level of public funding that can go to support frequent, reliable service and weakens the system’s already precarious financial position after decades of chronic underfunding.

State lawmakers heard this call from agencies and advocates during the early stages of the pandemic and in 2021 granted the system temporary relief from the requirement through 2023. The legislature then extended the relief through 2025 as negotiations continued on how to address the transit fiscal cliff with sustainable funding and reform.

Now the 50% requirement and its associated financial penalty will return in 2026 if lawmakers do not enact reform, potentially costing the system hundreds of millions of dollars and dramatically worsening the operating funding crisis. With no action, the system would be forced to pay the state a sizable financial penalty, further depleting the resources available to deliver frequent, reliable service and resulting in even harsher cuts and fare increases.

Illinois’ farebox requirement is higher than peers and punitive

CTA, Metra, and Pace are required by state law to bring in enough revenue to cover 50% of the regional transit system’s day-to-day operating expenses each year (known as the system-generated revenue recovery ratio requirement). Pace’s ADA paratransit service is required to cover 10% of its operating costs through direct revenue. As outlined in state statute, if these requirements are not met, the RTA cannot pass a regional transit budget, which could delay critical operations funding, and the system is subject to a significant financial penalty.

No other transit system in the U.S. faces a similar requirement—whether in magnitude, or in potential financial impact. In other states where one exists, the recovery ratio is one of several performance measures that can be used to incentivize efficiency and unlock additional revenue—not used to cut funding for service that could benefit riders.

In Massachusetts, the MBTA was required to set farebox revenue targets for five years, but that program expired in 2019. Maryland’s 35% recovery ratio requirement was repealed in 2017, and Denver’s was repealed in 2021. Transit systems in Washington, D.C., Philadelphia, Dallas, and Houston also do not currently face any farebox requirements.

The few states that still mandate transit farebox recovery ratios have much lower requirements. LA Metro must meet a 20% farebox recovery ratio to apply for state funds. MTA in New York must meet reasonable revenue targets per passenger mile on bus and rail to apply for additional state operating funds.

**RTA’s Transforming Transit proposal**

Earlier this year RTA released our Transforming Transit legislative proposal to deliver faster, more frequent, safer, and reliable transit service. The proposed reforms include reducing the requirement to 20% for fixed route bus and rail service and 5% for ADA paratransit service. The farebox recovery ratio would remain one of many key performance measures to evaluate system progress and maintain efficiency and accountability, but would not be tied to financial penalties that would further harm riders. Other proposed reforms would strengthen regional authority and oversight, such as establishing service standards that must be met to receive additional operating funds and providing the regional agency the ability to intervene on service issues throughout the year, rather than limiting authority to the regional budget vote in December.

Take action for sustainable funding and reform

Show your support for lasting change to the farebox recovery ratio requirement and other needed reforms to pair with sustainable operating funding by writing your lawmakers at SaveTransitNow.org.