House Dems eye taxes on entertainment, billionaires’ investments to fund transit

SPRINGFIELD — Two key negotiators on public transit reform in the Illinois House filed a bill Tuesday to raise up to $2 billion for public transit by taxing entertainment and the unrealized investment gains of billionaires.

Chicago area public transit agencies for months have argued that the new funding is necessary to avert a funding shortfall and service cuts.

But even as Chicago Democrats Kam Buckner and Eva-Dina Delgado indicated they believed the measure would pass in the House, it has a long way to go before making it to Gov. JB Pritzker for consideration. The Senate passed its own funding plan in May that included a controversial per-package delivery fee, but it went nowhere in the House.

The future of Senate Bill 2111 in the Senate is not clear, however. Delgado said the proposal represents what House Democrats think are the best solutions to pay for public transportation. She said a tax on rideshares, deliveries and real estate transfers that the Senate passed in May were “definitely concerning” to House Democrats.

Sen. Ram Villivalam, D-Chicago, did not immediately respond to a request for comment about the House’s proposal.

Buckner and Delgado said of the $1.5 billion and $2 billion that would be raised, about $220 million would go to downstate transit agencies.

The bill would include a series of reforms similar to what the Senate passed this spring to create a stronger oversight board in the region and improve fare and schedule integration.

“We heard the characterization over the last three or four months that this couldn’t be a Chicago bailout,” Buckner told Capitol News Illinois. “So, No. 1, what is in this bill is very clear that it is a transformative transit package for the entire state of Illinois. No. 2, when you look at what we’re asking in order to get to that number … the majority of the dollars are coming from the city of Chicago proper, and then the collar counties.”

How it’s funded

The Regional Transportation Authority, Chicago Transit Agency, Metra commuter rail and Pace Suburban Bus collectively face a $230 million funding shortfall in 2026 as pandemic relief money runs out. The funding deficit is projected to grow to $834 million in 2027 and $937 million in 2028. Without action in Springfield to plug that gap, the transit agencies have said they could be forced to cut services by 40%.

The largest portion of funding — about $700 million — would come from a 7% statewide tax on entertainment ranging from streaming services to live shows and other ticketed events.

“That would help us not only address issues in the northeastern Illinois region, but also downstate transit agencies that are looking at some possible cuts in the future if they don’t get some additional funding,” Delgado told Capitol News Illinois.

The sponsors said a $5 surcharge would also be tacked onto ticket purchases for large events and raise about $125 million. The surcharge would apply statewide but would mostly be paid for by those attending large events like concerts and sporting events in the Chicago area. The charge would allow ticketholders to use their ticket to ride public transportation to and from the event, Delgado said, with the goal being to change people’s travel behavior to large events.

Buckner and Delgado said the measure would also tax billionaires on unrealized gains on investment assets at a 4.95% rate — at the state’s current income tax rate — to generate about $300 million.

“If you’re going to go to anybody for funds, why not go to those who are most able to pay and making sure that those folks who have the means will be able to contribute to the system,” Delgado said.

The existing sales tax imposed by the RTA in Cook County and the collars would increase by 0.25 percentage points to 1.25% in Cook County and 1% in the collars. And another estimated $266 million would come from allowing municipalities to install speed cameras near churches, parks, schools and hospitals. Municipalities would be allowed to keep half of the revenue.

“A number of mayors around the state and village presidents have asked if they could get the same ability that Chicago does have to put up speed cameras,” Buckner said.

The plan is expected to face pushback from Republicans — and maybe some Democrats — in both chambers who have worried about increasing the tax burden on residents, especially those who don’t use the Chicago area’s public transportation systems.

“Let’s reform the structures, let them get their arms around it, and then let’s talk about what is needed” for funding, Senate Republican Leader John Curran, R-Downers Grove, said at a news conference earlier Tuesday.

New transit oversight

The reforms in the proposal are similar to what the Senate passed in May.

The bill would create the Northern Illinois Transit Authority, which would be a stronger version of the RTA and would have the ability to establish a universal fare system and coordinate scheduling between the three service agencies.

“Complete consolidation was going to be problematic for us and that we knew that each of these agencies kind of had their own flavor, but it was important that they were able to work together under one umbrella,” Buckner said.

The board would be comprised of 20 members: five appointed by the mayor of Chicago, five by the Cook County Board president, five by the governor and five collectively by Lake, McHenry, DuPage, Kane and Will counties. That makeup has drawn criticism from some suburban leaders who fear it will limit their ability to affect public transportation decisions.

It would also create a law enforcement task force that will target hot spots for public safety issues on the transit systems. Other roles will be tasked with deescalating conflicts or seeking to address homelessness and mental illness – issues that can sometimes escalate into public safety issues.

“Policing may be a part of that, but it is not the solution to everything,” Delgado said. “So we have to look at what makes somebody feel safe on the system. Part of it has to do with getting more people on that system because when you’re in a full train, you feel pretty safe.”

What’s in it for downstate

Transit agencies outside the Chicago area face their own funding challenges as a formula in Illinois law that directs a portion of sales tax revenue to downstate transit agencies becomes less lucrative. Those agencies are estimated to need $200 million in new revenue.

Delgado said about $220 million of the new revenue would go to transit agencies outside the Chicago area.

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.

This article first appeared on Capitol News Illinois and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.