April 3, 2017
As our region's federally designated Metropolitan Planning Organization, the Chicago Metropolitan Agency for Planning (CMAP) is required to release an updated financial plan for transportation as part of its quadrennial comprehensive plan that shows there are enough funds -- from both public and private sources -- to pay for the region's transportation plan.
While transportation revenue in northeastern Illinois comes from many different sources, several of them are trending below the last CMAP forecast released in 2014 as part of the GO TO 2040 update. In addition to current funding sources, GO TO 2040 assumed several new developments by 2016: an 8-cent state motor fuel tax rate (MFT) increase, additional parking pricing by local governments, and statewide performance-based funding for IDOT highway projects. To date, none of that has happened. As a result, more than $500 million of revenue forecasted in GO TO 2040 has not been realized by the region.
If revenues grow slower than transportation system needs, and new revenue sources are not implemented, the region will face difficult decisions about how to pay for maintaining and operating -- much less upgrading or expanding -- its crucial transportation infrastructure. As part of preparing the 2019-50 revenue forecast, CMAP explored where funding for transportation in northeastern Illinois is falling short and where funding sources are performing higher than projected.
Since the SAFETEA-LU bill to authorize surface transportation spending was enacted in 2005, federal revenues have been relatively stagnant. As a result, revenues have not kept pace with inflationary increases in the cost of labor and materials over time. When discretionary and earmarked funds are included, federal transportation revenues allocated to northeastern Illinois have actually decreased since 2005.
Note: Discretionary and earmarked funds include Projects of National and Regional Significance (PNRS) or FTA New Starts, as well as high priority projects. Higher funding levels in 2009 are due to ARRA. Revenues are in nominal dollars.
Source: Chicago Metropolitan Agency for Planning analysis of Federal Highway Administration and Regional Transportation Authority data.
State motor fuel tax
As people's driving habits have changed and cars have become more fuel-efficient, revenue from the state MFT has gone down. Vehicle miles traveled (VMT) -- a measure of how much people are driving -- have been relatively stable since 2008 after many years of growth. Coupled with improvements in vehicle fuel economy for cars on the market today, fuel consumption in Illinois is down. Accordingly, estimated state MFT revenues flowing to northeastern Illinois have dropped. CMAP anticipated this decline in our 2014 revenue projection.
Motor vehicle registration fee
GO TO 2040 included a forecast of motor vehicle registration fee revenues being spent in northeastern Illinois, with an annual 3-percent growth rate intended to account for growth in registrations as well as periodic increases in the fee rates. However, statewide growth in registration counts has flattened in recent years, which has coincided with slower rates of state population growth and slower growth in vehicles per capita, particularly for passenger vehicles.
Revenue growth in this category has been stagnant. Because rates vary by vehicle type, registration counts do not directly correspond to revenues. Over the past 15 years, compound annual growth in motor vehicle registration revenues was 0.7 percent.
GO TO 2040 assumed annual increases in toll revenue throughout the planning period based on forecasts published periodically by the Illinois State Toll Highway Authority. Toll revenues have increased in part due to increases in toll rates approved in 2012, as well as a slight increase in total transactions. However, toll revenues for 2015 were 1.7 percent lower than those forecasted in GO TO 2040, in part because toll revenues per transaction were lower than projected.
Transit ridership fees
While regional transit fare revenues have gone up in recent years, they have not increased at the levels predicted in the GO TO 2040 financial plan. Specifically, projected fare revenues for Chicago Transit Authority (CTA) and Metra were lower than anticipated, which can be partially attributed to declining ridership. According to CMAP analysis of Regional Transit Authority (RTA) ridership data, after ridership peaked in 2012, the RTA system experienced three consecutive years of system ridership losses through 2015, primarily due to declines in CTA and Pace bus ridership. However, ridership is stabilizing system wide due to growth in CTA rail ridership over the past couple of years. In 2016, RTA system ridership is projected to increase by 0.6 percent.
RTA sales tax
Total sales tax revenues for the six-county RTA service area exceeded GO TO 2040 revenue forecasts, increasing by 9.0 percent from 2013-15. These increases were primarily attributable to higher revenues generated within Cook County. Cook County sales tax revenue increased 9.5 percent during the period of 2013-15. The RTA sales tax has a history of steady growth, at an average pace of approximately 4.5 percent since 2009, while GO TO 2040 assumed a 3-percent growth rate.
Several transportation revenue sources have not met GO TO 2040 assumptions for growth in recent years. Moreover, failure to implement new revenues, such as an increase to the state MFT rate, has further eroded the available transportation funding resources anticipated for northeastern Illinois. CMAP is working with partners to finalize a revenue forecast for ON TO 2050, including all expected available sources between 2019-50. Initial forecasts indicate that current sources of revenue are insufficient to meet expected expenditure needs, meaning that the region will need to prioritize investments in the transportation system and implement policy changes to bring more revenue to the region.