Subscribe | Advertise | Editorial Calendar | Archives | Contact Us                                                                         March 2009 issue - Vol.9, No.6

...continued  Game of hardball with Chicago pols results in big bucks for downstate transit

County is not alone. State funding of mass transit had become a problem under former Gov. Rod Blagojevich, according to Grogan. Transit districts were supposed to receive 55 percent of their operating budgets from the DOA. But in a move to balance the state’s budget, Blagojevich kept allotments to downstate transit districts level from year to year, and swept the remainder into the general fund to pay for other programs. With rising costs of everything from salaries and wages to gasoline, the state allotment fell further and further below the 55 percent level.
In 2007, the CTA was in financial distress. It had maxed out its statutory authority to levy taxes and was looking at what Chicagoland papers were referring to as Doomsday - a massive cutback in service and layoffs of employees. The CTA needed action by the state legislature to amend its enabling legislation and allow it to increase its tax levy. Despite the need for quick action, the bill became a political football in the legislature and self-imposed deadlines came and went.
The stumbling block was the Downstate Democratic Caucus, chaired by Rep. Tom Holbrook, a Democrat from Belleville. The caucus is made up of Democratic party representatives from throughout the state of Illinois, outside of the city of Chicago and its surrounding collar counties.
“I called them together and I told them that this is an opportunity for us to demand our fair share of our taxes that we pay,” Holbrook said. “We made a deal with all of the suburban Chicago people, all of the city of Chicago people and with the governor’s people that we wanted the full 55 percent of operating costs in the first year. And we said the next year we wanted 65 percent of operating expenses.”
Driving such a bargain wasn’t easy, according to Holbrook. Essentially, downstate representatives were demanding a portion of tax money that would be raised in the Chicago area in return for their votes to save the CTA.
“We demanded it and we held the process up for almost four months,” Holbrook said. “When they realized that they couldn’t get it done without our votes, they capitulated. It’s

in effect today and it’s worth millions, tens of millions of dollars for downstate people. We are now going to receive the full benefit of the sales tax that we’ve been paying into mass transit - and we will also realize a major increase in funding for our transit districts when they’re most in need."  The CTA bailout bill allowed the CTA to raise its sales tax by 0.25 percent in Chicago and by 0.5 percent in the collar counties. It also allowed the city of Chicago to increase the real estate transfer tax from $7.50 per $1,000 to $10.50 per $1,000. The 40 percent increase in transfer tax went into effect April 1, 2008. It means that the seller of a $200,000 home in the city of Chicago now must pay $2,100 in transfer tax.
These tax increases in the Chicago area, in part, go to replenish the DOA fund and is the reason there is so much more state money going to downstate transit districts. The other reason, according to Grogan, is that the bill also made it a continuing appropriation so that the money continues to flow without further appropriations by the legislature. This provision safeguards the funds from the type of thing that Blagojevich was doing - sweeping funds from transit to help balance the general fund.
The St. Clair County Transit District’s allotment from the Downstate Operating Assistance fund will be nearly $32 million this fiscal year, compared to less than $18 million last year. Madison County Transit will receive almost $13 million, compared to less than $10 million last year. These increases in funding have been garnered without any increase in taxes downstate, Holbrook points out. They are also why the SCCTD was able to loan money to Metro to maintain MetroLink service in Illinois despite cutbacks on the Missouri side.

vice president/coo: Alan J. Ortbals
  email: aortbals@ibjonline.com

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