Political Feuding Blocks Transit Funding in Illinois

Published February 1, 2008

The Illinois General Assembly in 2007 was supposed to finish its business in May, but seven months later lawmakers remained in session to wrestle with mass transit funding in Chicago and the surrounding counties.

Political observers say the record overtime session was due at least in part to personal animosities between Gov. Rod Blagojevich (D) and key lawmakers.

The animosity between House Speaker Michael Madigan (D-Chicago) and the governor has grown so bitter that in early December Madigan boycotted two days of mass transit discussions involving the governor and other legislative leaders.

Proposed transit funding solutions have included a regional sales tax hike, diverting gasoline sales tax money, and a huge expansion of gambling, including putting a casino in Chicago. The additional revenue would fund the Regional Transportation Authority (RTA), which oversees mass transit in the city and suburbs. The transit agencies include the Chicago Transit Authority (CTA), Metra (commuter rail), and Pace (suburban bus service).

Gas Tax Diversion Fails

All the proposals have failed. The most recent would have sent the RTA another $440 million, $385 million of it from the gas tax diversion. Lawmakers rejected the idea November 29, in part because they could not work out a deal for infrastructure spending elsewhere in the state. Even if the proposal had passed, funding still would have been $90 million less than the transit agencies wanted.

CTA has threatened to cut service and raise fares starting January 20 if it does not receive more money. In November the governor diverted $27 million to CTA to stave off earlier threats of service cuts and fare hikes. That followed a $91 million advance on scheduled 2008 funding that Blagojevich sent CTA in September.

State Sen. Chris Lauzen (R-Aurora) complained the $91 million advance digs a deeper transit funding hole in 2008 and said the $27 million diversion also presents problems, because the money was borrowed from another fund that had bonding authority.

“There was capacity to issue $27 million, and he took it,” Lauzen said. “The RTA said it would not borrow money, so instead of them borrowing it, the state has borrowed it. Now all of us in Illinois, not just in the RTA counties, are going to pay for it. It will cost us $44 million when you include the interest we’ll pay over the next decade.”

Senator Slams Management

Lauzen also complained about wasteful management at RTA, starting with its handling of fares. In a meeting with RTA Chairman Jim Reilly, Lauzen said he learned average annual fare increases for buses and trains over the past decade have been 1.2 percent and 2.1 percent, respectively, even though fuel costs have climbed 173 percent over that time.

Lauzen said he also learned pension and health benefits for CTA employees are “unbelievably aggressive. To get free lifetime hospital benefits, a CTA worker has to be on the job only three years. That’s unbelievable. I told Reilly, ‘Of course you’ve got a [financial] problem with benefits like that.'”

Bipartisan Anger Erupts

Lawmakers on both sides of the aisle have expressed anger and exasperation at what they characterize as the governor’s disrespect and lack of trustworthiness. Shortly before the collapse of the gas tax diversion proposal, Blagojevich flew from the state capital to Chicago to attend a Chicago Blackhawks hockey game instead of remaining to work with lawmakers before the vote. He charged taxpayers $5,800 for the chartered flight.

“It’s a train wreck,” state Rep. Jack Franks (D-Woodstock) said of the overtime session. “It never should have gotten to where it is. It’s about talking to people and relationships and having a word that can be trusted. We cannot trust [Blagojevich]. He has no interest in governing. His interest is in issuing ultimatums.”

In one such case Blagojevich threatened to order the General Assembly into session every day through Christmas and New Year’s Day to get a transit funding solution. He has also threatened to veto hikes in sales taxes or income taxes to raise more mass transit money.

Mayor Wants Gambling

The standstill has put emphasis on a proposed casino, to be owned by the city of Chicago, as a funding source. Daley has long advocated a city-owned casino.

He “deeply believes that in these uncertain economic times, it is important to think creatively if we are going to keep the region moving forward,” said City of Chicago Chief Financial Officer Paul A. Volpe in testimony before the Illinois House Gaming Committee in October.

The mayor’s office projects annual revenues of $1 billion and 4,000 new jobs if Chicago gets its own casino.

Steve Stanek ([email protected]) is managing editor of Budget & Tax News and research fellow at The Heartland Institute.