CHICAGO – The Chicago region remains thirsty for new public transit funds to address an estimated $37.7 billion 10-year tab for maintenance and capital investments.
The Regional Transportation Authority of Northeastern Illinois says it needs $19.4 billion to keep the system in a state of good repair and $18.3 billion for normal capital reinvestment over the next decade.
To adequately address its needs, the system says it needs about $2.6 billion in annual funding over the next two decades. The RTA currently projects average annual capital funding of just $785 million over that period.
The warning comes in the agency's new
"The RTA and the service boards have determined that they require an annual funding level of between $2 billion and $3 billion per year over the next 20 years to maintain and renew our extensive transit network," RTA Executive Director Leanne Redden said in a statement. "Transportation is a key component of the economic engine that drives the region. We cannot take our prior investments in transportation for granted. A stable, dedicated, and on-going state capital program is more important than ever to allow our system to modernize and Chicago to prosper."
The latest figures show the agency has made little headway in tackling its funding needs amid a drought of new state capital help and a lack of bonding authority. The last report issued two years ago warned of $16.6 billion in funding needed for routine maintenance and capital spending and $19.5 billion for deferred investment in backlogged projects. That figure was up $3 billion over one issued a year earlier.
The latest projection does not anticipate any new Illinois state capital funding. "With the state's ongoing financial crisis, state funding in support of infrastructure has decreased significantly, further exacerbating the funding shortfall," the RTA warned. The estimate does factor in federal grants and tax-increment financing that both will go toward the CTA's Red Purple Modernization project.
The report warns that 31% of RTA assets are not in a state of good repair and without increased investment, that percentage will grow annually and is expected to hit 37% in 2035 based on current investment levels.
An annual funding level of $2.5 billion could bring 80% of the region's assets to a state of good repair in 20 years while $2.6 billion would bring the system to a 100% level in same time frame. Funding of $3 billion would allow for the modernization and limited expansion of the system.
"Almost as important as the level of funding is the consistency of the funding, which will allow for the long-term planning required for capital projects," the report said. "Predictable funding would also provide revenue streams to guarantee federal loan programs, bond issuances, public-private partnerships, or other financing mechanisms."
The RTA has little available state approved borrowing capacity and the CTA has doesn't have much capacity to continue leveraging its federal grants and share of sales tax.
The CTA, which operates the city's heavy rail transit and bus system, accounts for $23.1 billion of the tab, made up of a $12.5 billion backlog and $10.6 billion in future normal capital reinvestment needs, including replacement of vehicles, stations, facilities and track and structures.
Though state funding is at a standstill, local transit is benefiting from a big infusion of federal help.
The CTA recently won approval for more than $1 billion in federal Core Capacity grants to help fund the $2.1 billion Red/Purple Modernization project upgrading two rail transit lines. Chicago also established a special tax-increment financing district along the route to raise the local share of revenue needed to help secure the federal aid.
The CTA also has received Transportation Infrastructure Finance and Innovation Act loans for rail cars and a rail line overhaul.
Local authorities are also working with federal officials to obtain a low-interest loan of up to $1 billion to finance redevelopment of the city's historic Union Station rail depot. Several Metra commuter rail lines serve the station. The city and federal officials recently announced an Emerging Projects Agreement with the goal of obtaining a loan from the Railroad Rehabilitation and Improvement Financing program.
Metra accounts for another $12 billion of the $37.7 billion tab: $6.1 billion in backlogged needs and $5.9 billion in normal capital reinvestment, most of which is required for deferred bridge and vehicle replacements and rehabilitations. Metra raised fares this month to generate more revenue for its capital program.
Pace accounts for the remaining $2.6 billion of the total tab with a $755 million backlog and $1.8 billion in normal capital reinvestment needed.
The RTA board in December approved a $3 billion operating budget and $5.1 billion five-year capital plan, with plans to spend about $1.8 billion this year.
Federal funds are anticipated to cover 68% of the five-year program, with RTA bond proceeds accounting for 6.1% and CTA borrowing accounting for 5.6%. Pace borrowing accounts for less than 1%.
CTA, Pace, and the RTA each plan to issue bonds during the five-year period, totaling $604 million or about 12% of the total capital funding.
The RTA carries Aa3/AA ratings on its long term debt. The CTA's sales tax bonds are rated from the high single A category to AA.
The state's 2009, $31 billion capital program, which provided $2.7 billion for Chicago-area transit, is winding down. Despite bipartisan support, a new capital plan has taken a backseat to 19-month-old impasse between Republican Gov. Bruce Rauner and the General Assembly's Democratic majorities over an operating budget.
"Gov. Rauner is optimistic that through bipartisan negotiations and compromise, a balanced budget will be reached to allow important funding for public transit in order to improve Illinois' transportation services and infrastructure," Rauner spokeswoman Eleni Demertzis said in a statement Tuesday.
"The RTA continues to work with IDOT [Illinois Department of Transportation] and other regional stakeholders for the adoption of a new state capital infrastructure program. Such a program is essential not only for transit, but for all of the region's transportation infrastructure including roads, highways, and bridges," RTA board chairman Kirk Dillard said in a statement on the latest asset condition report.
In a speech late last year, Dillard said the passage last year of the Fixing America's Surface Transportation FAST Act marked a bright spot for transit because the five year plan provides $61 billion for public transportation and he expressed hope that transit will receive its share of help in the Trump administration's eventual infrastructure plans.
The RTA's service boards provide more than two million trips each weekday in the six counties they serve and operate the third-largest transit network in the nation.
