Both Service Board system-generated revenue and public funding support regional public transit operations. Service Board revenue and the RTA sales tax each provide approximately 40% of the total, while State funding sources provide approximately 20%, the vast majority of which is comprised of a 30% state match on RTA sales tax collections.
Fares and Other Operating Revenue
About 85% of Service Board system-generated revenue comes from passenger fares, and significant amounts are also generated by Service Board advertising and concessions.
Illinois law authorizes the RTA to impose a sales tax throughout the six-county Northeastern Illinois region. The RTA sales tax is collected by the Illinois Department of Revenue and paid to the Treasurer of the State of Illinois to be held in trust for the RTA outside of the State treasury. Proceeds from the RTA sales tax are paid directly to the RTA monthly.
The sales tax rates imposed by the RTA differ in order to recognize the differing levels of transit service provided in the six-county region. In Cook County the RTA imposes a 1.25% sales tax whereas in DuPage, Kane, Lake, McHenry, and Will Counties the rate is .50%. The RTA sales tax is expected to generate approximately $1.2 billion in 2017.
The State fiscal year 2018 budget included a permanent 2% surcharge that will be retained by the State before the RTA sales tax is disbursed to the RTA. This surcharge will reduce RTA sales tax receipts by approximately $24 million annually.
Public Transportation Fund
Illinois law provides that the State Treasurer is authorized and required to transfer from the State of Illinois’ General Revenue Fund to the Public Transportation Fund an amount equal to 30% of the revenue realized from the RTA Sales Tax and 30% of the revenue realized form the CTA’s portion of the Real Estate Transfer Tax (RETT) in the City of Chicago. Consequently, the state money dedicated to public transportation increases or decreases at a rate equal to the growth or decline of both sales tax and the RETT. The RTA expects to receive approximately $400 million from the State Public Transportation Fund in 2017.
The State fiscal year 2018 budget also reduced PTF payments to the RTA by 10% for State fiscal year 2018 only. This temporary reduction is expected to lower RTA PTF receipts by about $10 million for budget year 2017 and by about $30 million for budget year 2018.
Additional State Assistance/Additional Financial Assistance
Illinois law requires that the State of Illinois reimburse the RTA for the cost of the RTA’s debt service payments for the RTA’s Strategic Capital Improvement Program (SCIP) bonds. The RTA expects to receive $130 million of this funding from the State in 2017.
Real Estate Transfer Tax
In 2008, the General Assembly granted the city of Chicago the authority to impose an additional Real Estate Transfer Tax (RETT) upon the privilege of transferring title to, or beneficial interest in, real property located in the City. The supplemental tax rate of $1.50 per $500 of the transfer price is imposed on all sales within the City for the purpose of providing financial assistance to the CTA. This supplemental tax rate is in addition to the tax rate of $3.75 per $500 of the transfer price that the City already imposed prior to 2008. The supplemental tax is referred to as the “CTA portion” of the RETT, and the $3.75 tax is referred to as the “City portion.” The CTA’s portion of the RETT is projected to be approximately $65 million in 2017.
State Funding for ADA Paratransit
Originally established by a Memorandum of Understanding in November of 2009, funding for ADA Paratransit had been provided by the State of Illinois in the amount of $8.5 million annually since 2010. For State fiscal years 2016 and 2017, the amount was reduced to $3.8 million. However, the State 2018 budget did restore this funding to the traditional level of $8.5 million for RTA budget year 2018.