Celebrating Earth Day by Discussing Dedicated Ways to Fund Transit

Two years ago, in commemoration of the 40th anniversary of Earth Day, transportation officials and stakeholders in Chicago joined together to outline a plan to improve residents’ quality of life and protect the environment by strengthening transportation infrastructure.  Officials from the Chicago Metropolitan Agency for Planning (CMAP), the Regional Transportation Authority (RTA), Metra, Pace, the Chicago Transit Authority (CTA), Illinois Department of Transportation (IDOT), and The Illinois Tollway acknowledged that spending on transportation accounts for a significant portion of a household’s annual income and that efficient transportation will reduce this financial burden, generate job growth, and contribute to the long-term health of the environment.

The goals outlined in the 2010 accord will never come to fruition without consistent funding, however, and even Mayor Rahm Emanuel’s new Infrastructure Trust may be able to finance new projects, like transit, but we’ll still need a dedicated way to maintain and upgrade them down the road. So, this past Monday, April 23, I attended the Earth Day Transportation Summit to discuss financing options for regional transportation.

During breakout sessions, all attendees were asked to discuss a set of funding options and rate each according to soundness of public policy, ease of implementation, feasibility of enactment, and potential for growth. Based on those criteria, here are the ideas that were most popular:

- Indexing taxes to inflation was the revenue option that most people supported. Currently, the state motor fuel tax (MFT) is 19 cents per gallon for gasoline, a price that has remained unchanged since 1991. Raising the MFT to reflect inflation would result in a tax of 32 cents per gallon, almost double the current rate.  Even a small raise in the MFT would generate a significant sum: according to CMAP’s GO TO 2040 plan, an increase by eight cents, with a subsequently applied inflation index, would generate $19.4-billion dollars in revenue by 2040.

- Congestion pricing received the second highest ranking among summit attendees. Under congestion pricing, drivers would be required to pay a toll when entering or leaving the city or designated zone (cordon pricing); to pay an increased toll during preset rush hours regardless of traffic (fixed pricing); or to pay fluctuating tolls based on real-time congestion.  Commuters would have to then choose to spend more on transportation, find an alternate (non-toll) route, or (the optimum goal) utilize public transit.  GO TO 2040 estimates that revenue from congestion pricing could generate up to $12 billion dollars by 2040.

Photo by Joe Bergantine

Is congestion pricing the best way to fund transit? Photo by Joe Bergantine

- A surprise winner, in third place, was increasing parking fees. If parking fees are higher, drivers can weigh the costs of parking when they decide on travel options.  If driving is the chosen mode, they are less likely to stay in one spot for extended periods of time, thus reducing street congestion caused by drivers looking endlessly for a parking spot.   But, since street parking in Chicago is currently leased to Chicago Parking Meter LLC, this measure would primarily affect parking lots and suburbs where the RTA has the authority to raise fees in parking lots associated with malls, movie theaters, and private garages.  Parking fees are easily implemented, however, and the idea garnered widespread support.

All of the methods we discussed for creating a dedicated transportation revenue stream are feasible.  The biggest roadblock is a lack of political will from our leaders.  My hope is that the new focus on how we pay for infrastructure—brought about by discussion of Chicago’s new Infrastructure Trust—will keep these issues on the table and embolden our political leaders to start making difficult but important decisions about funding our transportation system for the long run.