After months of warnings about the “fiscal cliff” facing transit agencies when COVID-19 relief money expires, Metra leaders provided a stark hypothetical Wednesday.
“The number we are throwing around mathematically is a 40% reduction of service to meet the budget hole in 2027,” Executive Director Jim Derwinski told board directors at a meeting.
His remarks came after directors asked if the commuter railroad was readying for 2026, the year federal pandemic aid runs out for Metra, Pace and the Chicago Transit Authority.
The agencies should know in early 2025 whether Gov. JB Pritzker and the General Assembly will step in to avert a crisis, Derwinski noted.
“Part of the strategy is really looking at the leading indicators,” he said. “Typically, the governor puts out his budget proposal in February. That will be the leading indicator of whether or not … this board and staff have to start (undergoing) the arduous work of looking at how to reduce expenses to fill in that hole.”
The General Assembly also could include transit funding in the budget, he added.
If no solution emerges by the end of May, “we’ll absolutely will have to begin looking at how to reduce expenses in our 2026 budget,” Derwinski said.
COVID-19 decimated public transit ridership and Metra is still below 2019 levels of passengers and fare revenues.
The discussion Wednesday came as the board approved a nearly $1.14 billion balanced budget for 2025.
Metra’s share of federal funding will dry up between April and June 2026, leaving a $221 million budget gap, CFO John Morris said. That will deepen to a $332 million shortfall in 2027.
In 2026, budget cuts and fare increases could be options if there’s no other source of revenue.
“These conversations are real — there’s a short runway between now, and eventually, votes that are going to be very difficult for a lot of people in this state,” Derwinski said.
“Is there a game plan in place here for the fiscal cliff?” Director Stephen Palmer of LaGrange asked administrators.
It’s “something we talk about multiple times every single day with the other service boards,” Derwinski said, adding he and staff also are in discussions with state Senate and House leaders.
“No, we don’t just sit back and hope for the money, we absolutely are out there advocating for the needs of our passengers and certainly engaged in conversations about where that money’s going to come from.”
Metra riders climb abord the train at the Palatine train station in downtown. Officials say massive service cuts loom unless the state addresses a pending budget shortfall.
Paul Valade/pvalade@dailyherald.
Metra leaders are warning of service cuts of up to 40% in 2027 if a pending “fiscal cliff” materializes.
Brian Hill/[email protected], July 2024