Plan of Action for Regional Transit — Sales Tax Analysis
As the Chicagoland region faced a projected $730M+ annual transit funding shortfall, CMAP engaged our firm to provide the analysis needed to inform legislative recommendations to the Illinois General Assembly.
Chicago Metropolitan Agency for Planning (CMAP)
Tax Projections, Fiscal and Economic Impact Analysis
Chicago Region, IL
With COVID-19 significantly reducing ridership, the region faced a serious budgetary crisis. SB Friedman analyzed the costs, benefits and broader implications of potential sales tax reforms and increases on the RTA and communities throughout the Chicagoland area to support CMAP's legislative recommendations.
Work Completed
Projected revenues for multiple scenarios related to increasing the RTA sales tax rate
Reviewed goods and services taxed in peer and neighboring states to assess precedent and implications of introducing or modifying a sales tax on services
Identified high-growth, emerging sectors within Illinois currently exempt from sales tax
Projected potential revenues from expanding the sales tax base to include high-growth service sectors and increasing the existing RTA sales tax
Prepared a key recommendations report and technical memo summarizing findings
Results
We modeled multiple scenarios under consideration by CMAP, informing proposed legislative actions to address the looming transit fiscal cliff. The findings were incorporated into the final Plan of Action for Regional Transit Report, submitted to the governor and Illinois General Assembly in December 2023. Illinois passed the Northern Illinois Transit Authority (NITA) Act in December 2025. The NITA Act included a 0.25% increase to the existing RTA sales tax and will increase transit funding by a projected $1.2 billion.
