Summary
The city should implement smart fare reforms to make public transit more affordable and accessible. Reducing economic barriers to transit will provide access to more opportunities for economically disconnected people, and will also encourage people to shift modes. Fare reforms would effectively expand the reach of our existing network by integrating separate services and making transit a more cost-effective option. Providing incentives via tax benefits would encourage more people to switch to transit, which is the most efficient, environmentally friendly and equitable form of transportation.
Regionally Integrated Fares
Chicago’s three transit providers (CTA, Metra and Pace) are all administered by the Regional Transit Authority. But each has a separate fare structure with limited integration between services. Riders are forced to choose suboptimal transit routes due to price differences and limited options. For example, Metra has over 70 stations in Chicago that provide rapid transit to downtown. Despite serving the same geography as CTA, rides from these stations can cost 2-3 times the ‘L’ fare. Additionally, there are no discounted transfers between the systems. This failure to integrate the systems disproportionately affects the South Side where Metra could fill a real gap in rapid rail service.
Recommendation: Fully integrate the CTA, Metra and Pace fare systems to all use the same fare medium (most likely the Ventra card), and so that services serving similar areas are priced similarly. Also, create reduced fare transfers between systems. By making these services more affordable and convenient, the city can effectively expand the reach of existing transit services without adding any capacity.
Commuter Benefits
The IRS offers tax-free benefits to assist employees with their commuting costs—it allows employees to pay for their transit costs with pre-tax dollars that have been set aside (up to $255 a month). Because these dollars aren’t subject to federal income tax, participants can save as much as 40 percent. Unfortunately, only a relatively small number of employers offer this benefit in Chicago. Other cities around the country—such as New York, San Francisco and Washington D.C.—have required that all employers over a certain size (usually 20 employees) offer this low-cost benefit.
Recommendation: The city should fully support HB2533, which would require all employers over 20 people to offer pre-tax transit commuter benefits to their employees. If HB2533 fails, the city should implement a local ordinance requiring all employers with at least 20 employees in Chicago to provide access to the IRS’s pre-tax transit commuter benefits program.
Affordability
Low-income households spend a higher percent of their earnings on transportation. Lowering the financial burden of transportation drastically improves a person’s mobility, increasing access to employment, education, healthcare, and more.
The CTA offers discounted rides for children, students, the elderly and people with disabilities. However, there are no means-tested reduced fare programs for anybody outside of these groups. Thirty-one percent of CTA riders are from households earning less than $40,000 per year, and 10-15 percent come from households below the federal poverty line.
Recommendation: In collaboration with the CTA, the city should study and then implement a means-tested fare program in Chicago. Depending on how the program is structured, it could require state approval.
Timeline
100 Day Actions
- Announce a commitment to developing more equitable fares and more integrated transit service.
- Create task forces to study fare integration and means-tested fares.
- Actively support HB2533 in Springfield
First Year Actions and Goals
- Determine the best course of action for means-tested fares and begin legislative action at the appropriate level
- Begin a fare integration pilot program between CTA and Metra along the Metra Electric District, which would price Metra service along this route closer to CTA ‘L’ fares, and allow for discounted transfers between CTA buses and Metra
- If HB2533 fails, work with the City Council to introduce a local ordinance that would require employers of a certain size to provide pre-tax benefits
First Term Goals
- Working with the RTA, fully integrate the fare systems of CTA, Pace and Metra
- Implement a means-tested fare program for low-income Chicagoans
- Pass legislation at the state or local level requiring employers in Chicago to provide pre-tax commuter benefits
Additional Considerations
Why the time is right
The post-recession success of the Loop is a story that should be celebrated, but we must also recognize that the recovery has not been universal. With income inequality and racial segregation on the rise, now is the time to address the role transportation plays in connecting people in different parts of the city to employment and educational opportunities.
What it will take
- Fare integration will require a great deal of cooperation between the three transit service boards and the RTA. The city can play a role by facilitating these conversations and breaking down institutional and bureaucratic hurdles.
- The city must fully support and lobby on behalf of Rep. Theresa Mah’s commuter benefits bill, HB2533. Opposition will likely come from the business community, which views the requirement as a burdensome regulation. If HB2533 fails, the city should investigate the local authority they have to implement a similar requirement.
- For means-tested transit fares, the city should work with the CTA to study the cost and feasibility of different program structures, then pursue the necessary legislative actions (either local or state). If state action is required (such as the amendment of the RTA Act), the city should build support in the legislature.
Alignment with other Initiatives and Priorities of City or Partners
- RTA’s Invest in Transit strategic plan details the need for sustainable revenue to bring our region’s transit infrastructure into a state of good repair. Fare integration and means-tested fares will be seen as a revenue cut to transit agencies, so these programs must be developed in a way that doesn’t affect their ability to maintain and operate the existing system.
- The City of Chicago’s Vision Zero effort seeks to eliminate injuries and fatalities from traffic crashes. Metro areas with higher public transportation use have lower traffic fatality rates.
- The Chicago Department of Health’s Healthy Chicago 2.0 identifies active transportation as a key solution for increasing regional health. Objectives include increasing those who bike, walk, and take public transit to work
- Participate in systems change efforts related to Elevated Chicago, a program that targets station area improvements around 7 CTA rail stations.