CTA ridership just 60% of pre-COVID levels while budget is 30% higher

Chicago transit ridership is barely 60% of pre-COVID levels while the budget is 30% higher, now they face a $577 million budget shortfall.

The Chicago Transit Authority is facing a $577 million budget shortfall driven by bad policies and overspending.

Proposals to address this problem by increasing an already-unbalanced budget or infusing state resources to balance it won’t work. Fiscal responsibility and ridership growth are the only ways back to a sustainable path.

Chicagoland’s transit problem: budget up, ridership down

CTA ridership in 2023 is projected to be a mere 60% of pre-COVID levels in 2019 when there were 455.8 million riders. In 2023, there were 273.5 million. There is little indication levels will rise significantly in the coming years.

Despite this, the CTA budget continues to grow at a fast rate, adding $210 million year-over-year to its FY2024 budget. By 2026, the CTA budget is projected to reach over $2.2 billion, up $650 million since 2019, when it was $1.52 billion. This includes a shortfall of $577 million.

The CTA, which covers the Chicago “L” and city bus services, has received over $2 billion in federal relief funds through a combination of Federal relief funds. The CTA has used $1.1 billion of these funds through 2023. They plan to use $472.5 billion in 2024 and $481.2 in 2025 to cover shortages in these budgets while the 2026 budget projects a $576.9 billion shortage.

Nearly $2 billion in state funding won’t fix CTA’s systemic problems

The Chicago Metropolitan Agency for Planning proposes to address the CTA’s systemic problems by requesting an extra $1.5 billion in transit funding from the state and $400 million for capital investments.

This plan increases the area’s already immense tax burden on residents and does not address the transit authorities’ systemic problems. Taxpayers who do not live in the Chicago area should not be asked to bailout an agency miles and miles from their hometowns. The reality is that neither the city nor the state has the money to cover this shortfall. The city has proposed introducing a “congestion tax,” using this new revenue to fund transit spending. Congestion pricing is a method of charging users for use of congested roads during peak hours.

This can include things like new priced lanes, tolls on non-carpooled vehicles, or fees upon entry into congested areas. This, like many other transportation or gas taxes, is highly regressive and unfeasible. A congestion tax would not generate sufficient funds to cover CTA’s shortfall. It would also add a disproportionate burden on working-class families who have no choice but to embark on long commutes during peak hours. Recently, New York put an “indefinite hold” on its congestion tax policies which would have added a $15 fee on cars that entered Manhattan’s central business district. New York’s Gov. said $15 “can break the budget of a working- or middle-class household”. This decision was also impacted by 64% of New Yorkers opposing congestion pricing, showing how unpopular this policy would be.

One positive component of CMAP’s proposal that is worth implementing and expanding is to consolidate the transit agencies: CTA, Metra and Pace to cut administrative costs. Nonetheless, short-term costs, along with the time it would take to execute this restructuring, mean the plan will likely not provide immediate relief.

Rightsizing the budget, boosting ridership will help fix the problem

A two-pronged solution is needed to return local transit authorities to a fiscally sustainable path:

1: Address hefty and unnecessary administrative and personnel costs and

2: Create a commercial environment that draws more people to commute to the city via public transportation.

Personnel costs make up 68%, or $1.36 billion, of CTA’s $2 billion budget in 2024. These costs alone are projected to grow by $140 million to reach $1.5 billion by 2026. CTA’s personnel spending is bloated and wasteful. Nearly half of CTA employees, 5,154 of 10,588, are not transit operators but rather work in admin, management and support roles.  One particularly absurd example is a DJ set to make $20,000 for only 300 hours of work.

Overall, costs have continued to balloon despite ridership remaining below pre-pandemic levels. This is the main cause for the discrepancy.

People scared to ride

Crime is likely a key driver of low ridership. Violent crimes are regularly reported at CTA stations. In September 2024, four people were shot and killed on the blue line. The city cutting over 800 full-time equivalent vacancies in the police department since 2019 has not helped matters. The city should work to make residents feel more secure using public transportation with better funding and presence for police.

Loss of business and residents contributes to low ridership

The long-term solution to restoring ridership on local transit is to create a commercial environment that draws more people to public transportation. Chicago’s downtown office vacancy rate stands at over 25%, well above the national rate of 19%. Bringing workers and residents back to the city is the most straightforward way to ensure heightened demand for public transit. High rents and taxes have also pushed out residents in transit-heavy areas.

Smart policy and spending reforms are the way forward

Topline policies that can lower costs and increase demand for public transit include the following:

• Increase security and reduce crime in transit-heavy areas by bringing back lost police positions.
• Reducing administrative or non-essential positions in the CTA budget.
• Lowering commercial property taxes to alleviate burdens for businesses to stay in Chicago downtown. This can also help in raising demand for new companies that want to rent office space.
• Increasing housing supply in transit-heavy zones through looser zoning restrictions and lowering residential property taxes. This can help lower housing burdens and increase demand for these zones, along with providing opportunities for more people to commute and find work in job-heavy areas.

Good public transit provides many benefits in long-term economic growth. Chicago has one of the most robust transit systems in the country, but constant mismanagement puts the entire system at risk. It is imperative that the city emphasizes financial responsibility and efficient economic policy to address the CTA’s ongoing issues.