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Poor Prospects for RTA Proposed Reforms

Thomas Bamonte

By: Thomas Bamonte

November 18, 2024 / Blogs

November 18, 2024 / Blogs

The RTA’s failure to deliver on the 2008 transit reforms indicates its proposed incremental changes will also fail 

Introduction 

In 2008 the Chicago region faced a transit funding crisis due to the Great Recession. The General Assembly responded with a package of funding and governance reforms.1 Those reforms kept the region’s four transit agencies in place but gave the Regional Transportation Authority (RTA) substantial new powers to set regional priorities in its Strategic Plan and enforce compliance with those priorities by the other transit agencies.  

How RTA exercised the new powers it was given in 2008 provides a useful clue to how RTA will use any additional powers granted to it by the General Assembly in conjunction with resolving the current transit funding crisis. RTA’s proposed reforms seek the authority to do things it could accomplish using its existing powers. There is no reason to think that layering on a few more incremental powers for RTA will somehow prompt RTA to effectively utilize the substantial powers it has today…oversight powers that it has had since 2008 and mostly failed to exercise. 

The General Assembly has an alternative to giving more authority to an agency that has not exercised the powers the General Assembly granted it over 15 years ago. That alternative is the proposed Metropolitan Mobility Authority (MMA) Act (SB 3937). The MMA pivots from a failed model of RTA oversight over three independent transit agencies to a model where the transit agencies are consolidated into one agency, with one management team under the direction of one board of directors, all with one unified mission-building and operating an integrated regional transit system. 

Background 

The public transit system in the Chicago region faces a “fiscal cliff” starting at about $750 million a year when COVID relief funding for transit systems runs out in early 2026. Without replacement funding, transit service will have to be cut by up to 40 percent. In preparation for this crisis the Illinois General Assembly commissioned the Chicago Metropolitan Agency for Planning (CMAP) to study and report on both transit funding and governance reforms. In its Plan of Action for Regional Transit (PART) CMAP outlined both funding and governance options. 

One of the PART governance options involves consolidating the RTA, Chicago Transit Authority (CTA), Metra, and Pace Suburban Bus (Pace) into a single, integrated regional transit authority with a single board of directors replacing the current four independent governing boards. The proposed Metropolitan Mobility Authority Act tracks this PART governance option. 

PART also outlined a second governance option that would keep the four agencies in place but shift some authority from CTA, Meta, and Pace—the three “service boards”—to the RTA. No legislation has been introduced tracking this option, but the RTA has outlined a transit reform package that would give it some additional authority; that package is summarized here on a slide from RTA’s October 17, 2024 board meeting: 

The General Assembly’s 2008 transit governance reforms gave RTA substantial additional powers 

In 2007 the CTA’s financial situation was dire. It was facing a $158 million funding gap. To bridge that gap, CTA’s proposed 2008 budget contemplated elimination of bus routes, three of eight bus garages, laying off approximately 2,000 employees, and raising fares at least 25 cents a ride. The CTA’s service cuts would have amounted to a 20 percent reduction in its transit service overall and elimination of 53 percent of CTA’s bus routes.2 

The General Assembly stepped in to avert the crisis by adopting Public Act 95-708 (the “2008 Act”). The 2008 Act reformed transit funding. Among other things, the General Assembly increased the RTA transit sales tax rate in both Cook County and the five collar counties and authorized the City of Chicago to enact a real estate transfer tax to provide additional funding for the CTA. 

The General Assembly also tackled transit governance in the 2008 Act. Section 2.01a was added to the RTA Act, requiring the RTA to adopt a Strategic Plan no less than every five years. “The Strategic Plan shall describe the specific actions to be taken by the Authority and the Service Boards to provide adequate, efficient, and coordinated public transportation.” (Sec. 2.01a(a))3 The General Assembly went on to specify required elements in the Strategic Plan, including identifying goals and objectives with respect to: 

The General Assembly envisioned the RTA’s Strategic Plan to be a living document that could be amended between major updates to adapt the Plan to changing conditions. It directed the RTA’s Executive Director to “review the Strategic Plan on an ongoing basis and make recommendations to the [RTA] Board with respect to any update or amend of the Strategic Plan.” (Sec. 2.01a(a)) 

The General Assembly directed the service boards to comply with the RTA’s Strategic Plan. In the Metropolitan Transit Authority Act for the CTA (70 ILCS 3605/34) and in parallel provisions in the RTA Act for Metra (Sec. 3B.10) and Pace (Sec. Sec. 3A.10) the General Assembly required the service boards to annually prepare and submit to the RTA for its review and approval a comprehensive annual budget, proposed five-year capital program document, and a two-year financial plan. The General Assembly mandated in each of these provisions that the service board budgets must be “consistent with the goals and objectives adopted by the [RTA] in the Strategic Plan.” 

In Section 4.11 of the RTA Act the General Assembly also equipped the RTA with the power to enforce service board compliance with the RTA’s Strategic Plan. It provides that the RTA Board shall review the proposed budget and two-year financial plan submitted by each service board and approve them only if, among other things, “such budget and plan are consistent with the goals and objectives adopted by the Authority in the Strategic Plan.” (Sec. 4.11(b)(2)(vii)) If the RTA Board rejects a service board’s budget and financial plan, the RTA must withhold substantial funding (approximately 25%) from service board until the RTA approves an amended proposed service board budget and plan or imposes an RTA-approved budget and plan on the non-compliant service board. (Sec. 4.11(b)(4) and (b)(5)) 

RTA’s failure to exercise its powers under the 2008 governance reforms 

In the 2008 legislation the General Assembly laid out the purpose of the governance reforms outlined above: 

To achieve the purposes of this amendatory Act, the powers and duties of the [RTA] must be enhanced to improve overall planning and coordination, to achieve an integrated and efficient regional transit system, to advance the mobility of transit users, and to increase financial transparency of the [RTA] and the Service Boards. (Sec. 1.02(c)(ii)) 

One can imagine the RTA making use of these expanded new powers to achieve these purposes. As the General Assembly contemplated, the RTA could have developed and put into its Strategic Plans specific goals and objectives relating to transit service in the region. RTA’s power to review and, if necessary, reject the operating budgets and financial plans of the service boards, gives it ample power to ensure that the service boards are making sufficient effort towards meeting those the Strategic Plan requirements. If there are differences of opinion between the RTA and a service board, those differences get resolved in the form of an amended service board budget and financial plan. If those differences between the RTA and the service boards aren’t resolved, the General Assembly has made clear that RTA’s approach prevails, authorizing RTA to impose a substitute budget and financial plan for the service board. 

We can show how RTA’s powers under the 2008 governance reforms could have worked using the elements of RTA’s current proposed reform package described above. For example, in its proposed reform package RTA seeks legislative authorization to serve as the “rider hub for fares and customer service.” The 2008 governance reforms, however, empowered RTA to make it a goal and objective of the Strategic Plan that RTA serve as such a rider hub. If service boards proposed expenditures in their budgets conflicting with this goal and objective, such as funding their own rider hubs, based on the 2008 reforms RTA can reject those budgets and, if necessary, impose a service board budget stripping out the items conflicting with RTA’s goals and objectives. 

Likewise, in its reform package RTA seeks authorization to “set[] service standards with mechanisms to monitor and enforce compliance.” Given the General Assembly’s intention to give the RTA more power to “achieve an integrated and efficient regional transit system” RTA could build service standards into its Strategic Plan and use its service board budget and financial plan review powers to ensure service board compliance with those standards. The 2008 General Assembly encouraged RTA to flex its new powers in an expansive fashion after all, describing the RTA as now having enforcement powers: 

[the RTA is an] authority responsive to the people and elected officials of the area and with the power and competence to develop, implement, and enforce plans that promote adequate, efficient, and coordinated public transportation…. ((Sec. 1.02(d)) (language added by the 2008 reform legislation underlined) 

In its 2008 reforms, the General Assembly empowered the RTA to, among other things, set service standards: 

The Strategic Plan shall establish performance standards and measurements regarding the adequacy, efficiency, and coordination of public transportation services in the region and the implementation of the goals and objectives in the Strategic Plan. (Sec. 2.01a(d)) 

In other words, the General Assembly empowered the RTA to “establish performance standards and measurements, “enforce”  such plans, and gave the RTA ample enforcement power by (a) requiring the service boards to conform their budgets and financial plans to the RTA’s Strategic Plan and (b) empowering RTA to force adoption of service board operating budgets and financial plans that conform to its Strategic Plan. 

The final item in the RTA’s reform package is legislation that will provide that “RTA leads planning for major transportation and transit capital projects.” Here, again, the General Assembly in its 2008 reform package empowered the RTA to take a leading role. The General Assembly required that RTA’s “Strategic Plan shall establish the process and criteria by which proposals for capital improvements by a Service Board or a transportation agency will be evaluated by the Authority for inclusion in the Five-Year Capital Program.” (Sec. 2.01a(c)) The General Assembly provided that the RTA can play a central role in in corridor or subregion planning that includes consideration of capital investment needs: “The [RTA] may adopt…sub-regional or corridor plans…; the [RTA] may identify changes in operating practices or capital investment in the sub-region or corridor” (emphasis added) (Sec. 2.01a(h)). In addition, if a proposed new capital project or service can be provided by more than one service board and will cost over $25 million then the General Assembly gave the RTA the authority to exercise “sole responsibility for conducting any alternatives analysis and preliminary environmental assessment required by federal or State law.” (Sec. 2.01a(i)) 

As if that were not enough, as part of the 2008 reforms the General Assembly vested RTA with the authority to review and approve each capital project proposed by the service boards: 

[The RTA] shall each year adopt a Five-Year Capital Program that shall include each capital improvement to be undertaken by or on behalf of a Service Board provided that the [RTA] finds that the improvement meets any criteria for capital improvements contained in the Strategic Plan, is not inconsistent with any sub-regional or corridor plan adopted by the Authority, and can be funded within amounts available with respect to the capital and operating costs of such improvement. (Sec. 2.01b) (Emphasis added) 

In connection with its proposed reform package RTA officials have stated that RTA is seeking “line item veto power” over capital projects proposed by the service boards. Yet, the General Assembly gave RTA such veto authority in the 2008 reforms. The statutory language quoted above says that the RTA shall include in the Capital Program “each capital improvement” proposed by a service board if the RTA finds that “the improvement” meets the criteria for capital improvements that RTA has established in its Strategic Plan. In other words, the General Assembly intended that RTA review each proposed capital project against the RTA’s Strategic Plan criteria and include only those projects meeting those criteria in RTA’s Five-Year Capital Program. This winnowing process established by the General Assembly amounts to giving the RTA the power to reject individual capital projects proposed by the service boards that RTA determine do not meet the requirements of the Strategic Plan. This is line item veto power; and the RTA has had this power since 2008. 

Thus, as a result of the 2008 reforms the General Assembly gave the RTA the power to set criteria for capital projects in its Strategic Plan, establish the process for how the RTA will review proposed projects, and directed RTA to review each proposed project and veto projects that the RTA determines fail to meet Strategic Plan criteria by not including such projects in RTA’s Five-Year Capital Program. 

In sum, the General Assembly gave RTA substantial new powers in its 2008 transit reform package. The RTA could accomplish all three of the items in its current proposed reform package using the authority it was given over 15 years ago. RTA’s failure to exercise the powers given by the General Assembly years ago raises real doubt whether RTA can or will effectively exercise the powers in its package of proposed reforms. Why should the General Assembly and the public expect the RTA to exercise the three powers referenced in RTA’s reform package—powers that simply duplicate those vested in the RTA already—when the RTA has failed to effectively exercise the powers the General Assembly granted the RTA in its 2008 reform package? 

What cccounts for the RTA’s failure to exercise the powers it was granted by the 2008 reform package? 

Chalking up the RTA’s failure to exercise the powers granted to it by the General Assembly in the 2008 reform package to willful intransigence is unhelpful in understanding this failure. The fact that the RTA is asking the General Assembly for powers it appears to have under the RTA Act already suggests that RTA is not trying to avoid exercising its statutory authority but is thwarted from doing so.  

What might be thwarting RTA from effectively using its Strategic Plan and its budget and capital program approval powers as expansively as the General Assembly intended? The RTA Board’s supermajority requirement is the most likely explanation. All of the RTA’s programming and oversight powers, from the contents of its Strategic Plan to its review and approval of service board operating budgets and capital projects, require the “affirmative vote of at least 12 of its then Directors. The RTA has 15 directors, five appointed by each of the City of Chicago, suburban Cook County, and the collar counties (Lake, McHenry, Kane, DuPage, Will), plus a Chair appointed by those directors.  

The five service boards are closely tied to one or more subregions—CTA: City of Chicago; Metra and Pace: Cook County and the collar counties. The City of Chicago controls the CTA board but suburban Cook County, some of which is served by the CTA, has no appointments to the CTA board. Metra and Pace have significant operations in the City of Chicago but the City has minimal representation on their boards. As a result, Metra and Pace are viewed as the suburbs’ transit agencies and CTA is viewed as Chicago’s transit agency. 

The RTA’s supermajority requirement allows five directors to block action favored by an 11-vote majority. Since each RTA subregion—Chicago, suburban Cook County, collar counties—has five votes this means that each subregion has veto power over the RTA’s use of the Strategic Plan, budget review, corridor capital planning, alternatives analysis, and other powers RTA received as part of the 2008 reforms. 

Giving each subregion such veto power inevitably thwarts RTA from effectively exercising the powers it gained in the 2008 reforms. Setting regional standards and priorities, critically reviewing proposed service board expenditures and capital projects, and the like will often require tough decisions that may adversely affect a service board, or at least appear to do so. The RTA’s supermajority requirement means that each subregion voting bloc has veto power over any RTA action that might adversely affect “their” transit agency. 

The result of this high supermajority requirement, not surprisingly, is what we observe. RTA’s Strategic Plan lacks meaningful service standards. Service boards face no RTA accountability for failing to deliver good performance. The RTA’s review of service board budgets and capital programs becomes a thumbs up/thumbs down exercise for the documents as a whole. RTA’s powers to take the lead on corridor and subregion project planning and on alternatives analyses on certain projects remain unexercised, all because the supermajority requirement stands in the way. 

The second explanation is that RTA lacks the resources and staff expertise to effectively utilize the substantial authority the General Assembly granted RTA in the 2008 reforms. Effective development and delivery of transit operations and transit capital projects require specialized expertise. The service boards have experienced and capable personnel in these areas. RTA, with no responsibility to actually run transit operations, lacks such expertise for the most part. 

What this means is that to effectively discharge its powers and responsibilities under the 2008 reforms—and any additional powers and responsibilities it would get under the RTA’s current reform package–RTA would have to bring to bear expertise that it didn’t have in 2008 and it does not have today. RTA might bridge the gap between the level of its staff expertise in transit operations and capital projects and the expertise in those areas among the staff of the service boards by hiring outside experts. Doing so would be costly and those expenses would have to be identified in RTA budgets that must be approved by a supermajority of the RTA Board and, hence, almost certain to fail as the RTA directors rally to protect “their” service boards from expansive RTA scrutiny. 

A third explanation is that over the course of its 40-year history the RTA  has failed to aggressively exercise the powers granted to it by the General Assembly. As a result, institutional expectations and habits have developed such that RTA customarily takes a narrow view of its powers and opts for complacent consensus over aggressive leadership necessary to arrest the region’s transit system’s long, slow decline in service, ridership, and relevance.  

Consequently, we find ourselves in the untenable spot where RTA does not and, as a result of the supermajority requirement, likely cannot fulfill its Strategic Plan and budget and capital program review, and other responsibilities that the General Assembly gave RTA as part of the 2008 transit reform legislation. Simply giving the RTA another layer of incremental authority, as the RTA proposes in its reform package, is a recipe for a rerun of RTA’s failure to implement the ample new authority the General Assembly vested in the RTA in the 2008 transit reform package. 

The MMA Act Solution 

The proposed Metropolitan Mobility Authority (MMA) Act starts from the premise that the General Assembly should learn from RTA’s failure to implement the 2008 reforms that giving the RTA incremental new powers is unlikely to result in meaningful improvements to how public transit is planned, funded, coordinated, and delivered in the Chicago region. 

Consequently, the MMA Act eliminates the supermajority requirement that allows a single subregion to block effective oversight and action. The MMA Act also recognizes that building up the RTA’s expertise to effectively review service board budgets and capital projects and to manage subregion and corridor planning and perform alternatives analyses on big projects will be expensive and duplicative of the expertise already embedded in the service boards. Instead, the MMA Act rests on the commonsense notion that bringing the region’s expertise in transit operations and capital projects under one institutional roof and under the direction of a single MMA board of directors, rather than the current four independent boards of directors, is the better way for the region to leverage this expertise and roll out improved, integrated transit service for the region. 

Conclusion 

In 2008, in response to a transit fiscal crisis akin to the fiscal cliff faced by our transit agencies today, the General Assembly enacted transit governance reforms. The General Assembly greatly enhanced the RTA powers, empowering RTA to use its Strategic Plan and budget and capital program review and approval powers to put the region on the path to a truly integrated regional transit system. 

The RTA has failed to effectively exercise the powers it was given in 2008. The three things it seeks in its current reform package proposal are all things it could accomplish if it used its 2008 reform powers effectively. RTA’s failure to effectuate the 2008 reforms is likely due to structural obstacles such as the RTA Board’s unreasonably high supermajority requirement and a 40-year institutional history of taking a timid approach to RTA’s powers and responsibilities. 

Rather than compounding the RTA’s failure to effectuate the 2008 reforms by adding an additional layer of incremental solutions doomed to failure, the General Assembly should opt to clear the obstacles by consolidating existing transit operations and capital projects expertise under one agency roof overseen by a single board not hobbled by an overly restrictive supermajority requirement. The MMA Act accomplishes that result. 

1 Public Act 095-0708 

2 Crain’s Chicago Business, CTA budget calls for ‘devastating’ cuts (10/17/2007) 

3 All references in the form “(Sec. __)” refer to sections of the RTA Act, 70 ILCS 3615/1.01 et seq.