Nine months ago, Tom McKone and Julie Kirschbaum, who run transit in Chicago and San Francisco, came to my Forum to describe the same emergency from opposite coasts. The federal aid that had carried American transit through the pandemic was nearly gone, and beneath it sat a structural hole that predated COVID. Both agencies were a budget cycle from a cliff.
What they described was not retreat. Through the worst of it, each had been rebuilding. Chicago poured service into the midday and weekend hours where riders actually came back, hired five thousand people to run it, and took three budget scenarios to public town halls.
San Francisco rebuilt speed and reliability on the street, with faster buses, evener headways, and a subway whose delays it had cut sharply. Both were making the case, in service and in public, that transit was worth saving.
That groundwork paid off. Illinois passed a landmark funding bill, and Chicago climbed off the cliff. San Francisco's answer is now headed to its voters in November.
Listen to the full conversation on Spotify:
Tom McKone is the chief financial officer of the Chicago Transit Authority, the steady hand behind its finances and a champion of its modernization, from the $2.2 billion Red Purple rebuild to the leanest overhead in the industry.
Julie Kirschbaum runs the San Francisco Municipal Transportation Agency; the first woman to serve as the city's permanent transportation director, she took Muni to its highest customer satisfaction on record during COVID and still calls herself an operations-planning nerd.
What follows is why the cliff is structural, why you cannot cut your way off it, how better service becomes a revenue strategy, how each city found its money, and what to do if your own cliff is still coming.
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The Cliff Was Always There
Chicago faced a structural shortfall of $451 million; San Francisco a $307 million operating deficit that grows toward $430 million by 2030. What matters is not the size of the gap but that it grows every year.
A growing gap cannot be closed with one-time money. Reserves and relief funds each buy a single year and leave the gap bigger the next. Federal aid never fixed the structure; it paid the structure’s rent for four years, and then the lease ran out.
So both cities went hunting for permanent revenue that grows over time.
The Diversification That Wasn’t
“We talk about diversified revenue sources,” McKone said, “but they’re not really diversified if they all move in the same direction in response to the same things.”
San Francisco is the textbook case. Muni draws on fares, the city general fund, and parking. Three legs on paper, but all three are tied to downtown, and when downtown emptied they fell together. Inflation-adjusted fare revenue is now less than half its 2014 level, and one downtown garage, across from a nearly empty mall, fell from $20 million a year to about $6 million.
The lesson for any agency rebuilding its funding: count correlations, not sources. The risk is not how many revenue streams you have; it is whether they fall at the same time.
Same Riders, Fewer Trips
Ridership is down from 2019, which is real and also misleading. CTA serves the same number of unique people over a four-week period as before the pandemic. The riders did not leave; the trips did.
And they are coming back. By spring 2026 Muni was posting its strongest months since the pandemic, and Chicago’s weekend demand is back near 2019. In Chicago, Aloisi noted, “more people are using CTA for mobility of care purposes than they are to get to work,” the medical visits and school runs of daily life. For the quarter of Chicago households without a car, transit is the only way those trips happen.
Plan for the rider who is still here, and follow that demand without stranding the low-ridership routes that transit-dependent riders rely on.
You Can’t Cut Your Way Off a Cliff
The reflex in a crisis is to trim. Both leaders explained why that cannot work.
By CTA’s own benchmarking (FTA National Transit Database), its administrative overhead is the lowest in the industry, 11.2% of operating expense, against 18% or more at the MBTA, LA Metro, and WMATA. Two-thirds of its budget is labor, which is the service itself: the operators and mechanics who move the buses. In San Francisco, 77% of the budget goes to the people who run the service.
So Kirschbaum says it plainly: “There is no scenario where public transit can cut our way out of the fiscal cliff.” Once overhead is at the bone, the only thing left to cut is service, and cutting service starts the death spiral: fewer trips, longer waits, riders who give up, less revenue, deeper cuts.
Service Quality Is the Revenue Strategy
If you cannot cut and cannot conjure money overnight, what can you do?
Make the service you run better with the money you have. Service quality is itself a revenue strategy: Chicago’s riders said they would rather pay more than lose service, and Muni posted record satisfaction in the middle of the crisis. That is what a fare case, and a legislator’s or a voter’s yes, is built on.
It sorts into three moves.
One, follow the demand that came back. Chicago’s Frequent Bus Network guarantees 10-minute-or-better service from 6am to 9pm on weekdays and 9am to 9pm on weekends, aimed at the off-peak and weekend trips that recovered first.
Two, make the bus competitive on the street. San Francisco’s Muni Forward added more than 75 miles of transit lanes and signal priority, the low-capital infrastructure that wins back the time a bus loses to traffic.
Three, manage headways, not timetables. SFMTA keeps buses evenly spaced and gives each operator a live read on the gap to the bus ahead. That is the real fix for bunching, the reason three buses arrive together after a long wait. Paired with closing the subway early one night a quarter for deep maintenance, it cut long delays in half and shorter delays by 70%.
They Built Political Capital First
Better service earns the ask; someone still has to make it. Before Chicago asked for a dollar, it built the case. The agency published three budgets, cliff, baseline, and growth, and ran town halls before releasing any of them. Riders said they would rather pay a little more than see service cut, which made both the fare case and the legislative case concrete.
Town halls and budget scenarios are not service moves. They are how a rescue becomes legible to the people who vote on it.
Chicago Got Its Answer
That fall, Illinois passed SB 2111, a roughly $1.5 billion transit package that includes about $1.2 billion a year in new operating money for CTA, Metra, and Pace, funded mainly by redirecting the state motor-fuel sales tax to transit and raising the regional sales tax a quarter point. The transferable lesson is the structure, a recurring regional tax paired with reform, rather than the specific source, which depends on your state’s law.
The CTA board then passed a 2026 budget with no fare increase, no cuts, and no layoffs, and flipped from defense to offense: it is expanding its high-frequency bus network from 20 to 30 routes, moving the Orange Line to 24-hour service, and adding unarmed Safe Ride Ambassadors.
The bill also replaced the fragmented Regional Transportation Authority with a single Northern Illinois Transit Authority empowered to set fares and coordinate service region-wide. The lesson for any legislature is to price reform into the check while the emergency still delivers the votes.
San Francisco Goes to the Voters
San Francisco’s fight is scheduled rather than settled. Wiener and Arreguín’s SB 63 authorized a five-county regional sales tax, a full cent in San Francisco and a half-cent elsewhere, to raise about $1 billion a year for transit. After the regional board declined to place it, backers qualified it for the November ballot the hard way, gathering more than 305,000 signatures; alongside it, San Francisco asks its own voters for a $150 million parcel tax for Muni.
Spreading the ask across five counties and two instruments is the point: a base whose legs do not all fall together.
Two honest caveats. Sales taxes are regressive, so the design question is whether the riders who depend on transit most are also asked to fund the largest share. And this is a harder bet than Chicago’s: a legislative majority in one building is easier to win than a majority of voters across five counties. Kirschbaum’s bet is that the fear is front-loaded. Congestion pricing, she notes, proved “only controversial before you do it”; she expects that once voters are at the ballot, they will fund the service they already rely on.
If Your Own Cliff Is Still Coming
Three moves travel to any agency, and none needs a statehouse.
First, stress-test your revenue. Pull each line, fares, sales tax, parking, state grant, for the last two recessions. Any two that fell together both times are really only one, and the diversification that survives is tied to something that moves differently, a parcel tax, a registration fee, a state formula grant.
Second, build the three-budget table, cliff, baseline, growth, with a dollar figure and a service consequence on each. It turns “we have a deficit” into “here is what $40 million buys, or costs, in trips,” the only language a board or a legislator acts on.
Third, re-time the service you already run to the trips that came back, before you ask for a dollar.
And start early. Chicago’s win and San Francisco’s campaign both rest on months of town halls, testimony, and a named revenue ask.
The Optimism Is Earned
The cliff was built quietly, over years of underfunding, and it will not be solved quietly. Both cities used the emergency to force reforms that should have come a decade ago.
Rescue does not simply arrive. The agencies that get rescued are the ones running the service worth saving.
–Jinhua
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Jinhua Zhao
Professor of Cities and Transportation, Massachusetts Institute of Technology
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