Metra budget forecast shows $221 million fiscal cliff coming in 2026
Metra has released a no-surprises $1.1 billion 2025 budget proposal that would increase operating expenses by 4% and keep fares stable.
The drama comes in 2026 when the agency will likely be confronted with a $221 million budget hole as COVID-19 aid runs out, officials said at a Thursday meeting.
Executive Director Jim Derwinski said 2025 could be “the calm before the storm,” unless the Illinois General Assembly can solve the so-called fiscal cliff.
Chief Financial Officer John Morris told directors Metra has about $330 million left in pandemic federal funding. The agency will use $238 million of that to close a revenue gap in 2025.
That leaves just $93 million for 2026, which will likely be spent by the second quarter, leaving a $221 million shortfall, Morris noted.
Metra isn’t alone. Pace and the Chicago Transit Authority are facing similar revenue crises in 2026 caused by a ridership slump when COVID-19 hit in 2020.
The state Senate Transportation Committee held hearings this summer and fall on reforming transit governance. Meanwhile, the Regional Transportation Authority’s “Transit is the Answer” plan suggests options like raising various taxes or fees to generate funds.
But there’s no definitive action on the looming crisis.
“We have significant challenges in front of us ... financially, politically,” incoming Metra Chair Joseph McMahon said. “And I know that by continuing that collaboration (with) ideas from Metra employees, ideas and leadership from the board, that we’ll be able to work through these challenges.”
Metra analysts expect ridership to reach about 37 million in 2024 and hit 39 million in 2025, equaling $184 million from fares. In comparison, there were 74 million passenger trips in 2019.
Some economic positives are lower diesel prices and steady growth in sales tax revenues, Morris said.
Some additional expenses in 2025 derive from inflation, salary increases, cybersecurity protection, new federal training requirements for employees, and automatic braking system upgrades.
Metra’s 2025 capital plan is $366.4 million and includes bridge reconstruction along the Union Pacific North Line, buying or rehabbing locomotives and rail cars, and station improvements at locations like the Pingree Grove stop in Crystal Lake.
Budget hearings will be from 4 to 6 p.m. Nov. 6 and 7 across the region. For details, go to metra.com.