Reductions in Metra commuter train service might not happen next year after all, even if the Illinois General Assembly fails to come up with new funding to avoid the fiscal cliff.

The Metra Board of Directors was told on Wednesday that, according to a presentation, the
“goal is to avoid 2026 service reductions; reductions needed in 2027 and 2028.”

Chicago’s three transit agencies, Metra, CTA, and PACE, have been projecting a combined $771 million shortfall next year, as federal COVID relief dollars are used up, and have been saying that could mean up to a 40% service reduction over the course of 2026.

However, sales tax revenue, which helps fund transit, is coming in surprisingly higher than expected, a $35 million bump for Metra. The higher revenue is generated by more online purchases being taxed.

Metra board member Ken Koehler said “it’s important to realize how important sales tax revenue is to us.”

And there is still some unspent COVID relief money available.

In fact, Metra has stretched those dollars a lot further than anyone expected. The COVID money was first expected to run out in 2024.

Plus, the Regional Transportation Authority, which oversees funding, is requiring Metra, CTA, and PACE to increase fares by 10% early next year.

With all of those extra revenues, Metra’s share of the fiscal cliff for 2026 is now projected at $85 million, which presumably the agency believes can be covered without cutting service.

RTA is requiring each service service provider to prepare two separate budgets … one assuming no additional state funding for the fiscal cliff, and one incorporating the extra state assistance.

Metra’s Chief Financial Officer John Morris said that if the “no fiscal cliff funding” model happens, there would possibly have to be another fare hike in the second half of 2026.

If the state lawmakers come up with money to cover the fiscal cliff, Morris said there might even be “targeted service additions.”

However, Metra CEO Jim Derwinski said “without a solution from the state, in 2027 Metra is going to have to make some serious reductions in expenses, and that is obviously going to come from train service.”

Absent state help, Metra’s 2027 cliff is projected at $283 million.

The latest 2026 projections might seem to take some of the pressure off of the legislature to come up with an immediate solution when they return to Springfield next month.

But Derwinski said Metra needs a stable and predictable long-term funding solution.

He also said that it’s critical for lawmakers to fix a problem which few people know about outside of the General Assembly and the transit industry, something called the “farebox recovery ratio.”

Illinois requires transit agencies to cover 50 percent of their expenses from ticket sales.

When ridership plummeted during the COVID pandemic, the state waived that requirement …but the waiver runs out at the end of this year.

“We have to get relief” from a return to the 50/50 ratio, Derwinski said, or the results could be drastic.

There may also be a behind-the-scenes battle brewing between the City of Chicago and the suburbs.

There was discussion at the board meeting that Chicago Mayor Brandon Johnson might refuse to implement the RTA-mandated 10% fare hike on the CTA.

If that happens, and it’s just speculation right now, the RTA could reject the CTA budget, and a “now what?” scenario could be in the cards.

Metra, CTA, and PACE are supposed to present their budgets to the RTA next month.

All three agencies serve Evanston.