Fare hikes will punish suburban commuters for Metra's errors

Commuting just got more expensive. The Metra Board of Directors recently approved the $1.1 billion 2024 budget proposal, including the controversial new fare structure. The fare increases will hike the cost of round-trip travel to Chicago, ending the pandemic fares popular with suburban commuters.

Starting Feb. 1, Metra will eliminate the $6 and $10 day passes and $100 monthly passes that offered discounts of up to $9 per round trip from 2019 prices. Replacing them will be packs of day passes with little to no savings.

Metra's timing seems off.

Chicago's commercial district has record-high office vacancy rates, businesses are leaving or threatening to do so and the city's commercial propGueserty taxes are second-highest in the nation. Chicago doesn't need to give businesses another reason to leave or avoid the city, and higher commuter costs does exactly that.

The board claimed the price spike will simplify fares and improve riders' experiences. The reality is Metra ridership is still struggling to return to pre-pandemic levels. Since COVID-19 was at its peak in December 2020, Metra has failed to reclaim even half of its pre-pandemic monthly riders: it carried 2.85 million riders this September, compared to 6.24 million in September 2019.

At this recovery rate, it could take until 2028 for Metra to reach pre-pandemic ridership levels. That assumes downtown Chicago will continue attracting workers and remote work will drop significantly, but how realistic is that?

Here's how realistic: in 2022, 33% of Illinoisans worked from home at least one day per week. That's up 24% from 2021. At the same time, downtown Chicago's office vacancy rate rose and is still rising. According to the latest report from CBRE, last quarter saw the largest decline in leased office space since the height of the pandemic two years ago. Four of the six largest move-ins this quarter were companies that had actually downsized offices. These all indicate signs of remote work becoming more common, not less.

Another likely reason for the decline is the cumbersome environment for businesses downtown. Chicago already holds the nation's second-highest commercial property tax rate, more than double the U.S. city average. Taxes on downtown office buildings have risen significantly since COVID-19, and those taxes get passed directly to tenants through higher rents. It's becoming less affordable to lease office space in the city, especially large square-footage spaces downtown.

Major companies such as Boeing, Caterpillar, Citadel, TTX and Tyson Foods are leaving or already left Chicago. CME is positioning itself to do the same over crime and the threat of new Chicago taxes.

The city needs to attract new businesses downtown. New businesses bring new commuters. Metra raising commuting costs now will hurt that effort. So will Mayor Brandon Johnson ignoring all the police vacancies and the rising violent crime rate, plus hitting commercial properties with the bulk of his proposed real estate transfer tax hikes.

Does Metra really think hiking fares will boost ridership? No. The fare hikes are intended to offset ridership losses and the fact federal funding is running out.

Metra's operating budget has increased by 11% from 2019, adjusted for inflation, with the 2024 budget. After letting Metra become dependent on government pandemic relief and losing over half its riders, the transit system faces an expected $275 million budget shortfall in 2026 when the federal relief is all gone. Metra's long-standing fiscal mismanagement and history of corruption have added up.

So, Metra's solution is to use suburban commuters to offset the system's financial shortcomings. It is a shortsighted strategy. Chicago leaders should focus on comprehensive reforms that attract job creators.

Until Chicago returns to being a vibrant city for businesses, Metra's ridership may never be the same.

• Micky Horstman is the communications associate for the Illinois Policy Institute