Chicago last week staved off yet another looming transit doomsday, and for a mere half billion dollars in new taxes.

So guess what big Illinois city needs more money for transit already?

As far as El-pocalypses go, this would have been a doozy. Saying they were out of money, transit authorities in Chicago were prepared to cut 160 bus routes and idle about a third of their buses. They’d have raised some cash fares to more than $3, and they were guessing they’d lose 250,000 or so daily riders.

Now, never mind. Governor Blagojevich imposed a deal and lawmakers took it. The sales tax set aside for transit in Chicago and surrounding counties is going up. There’s a new tax on home sales. Downstate Illinois will send more money to prop up a system “which is of no value to them,” as state Rep. Mark Beaubien, a dissatisfied part of the Republican minority, put it. All told, it comes to about $530 million in new taxes this year.

It includes free rides for anyone over 65, added by the governor to sweeten the deal. Mr. Beaubien, who represents part of Chicago’s northern fringe of suburbs, qualifies. So, he points out, does every late-career bank VP rolling into the Loop on the morning Metra from Lake Forest. “I need a free ride on the RTA or the CTA or the Metra like I need a hole in the head,” he says, especially since oldsters already get a discount. For the tax price, it’s not a good deal.

Yet even that price didn’t satisfy. “To get transit right will cost at least $1 billion more per year than what state government just decided to spend,” wrote Jack Davis of Chicago Metropolis 2020, a government-business-labor think tank, in a newspaper last weekend.

The head of the Regional Transit Authority says it could cost $10 billion over a decade just to fix existing rail lines, $57 billion over the next 30 years. Another newspaper essayist, encouraged by the tax-hiking mood, suggested it’s time to dig subway tunnels for the city’s elevated lines and turn the century-old structures into bicycle expressways. No cost estimates available on that.

This isn’t just in Chicago. It seems everyone’s public wheels need more money. In New York, transit authorities are raising fares to snag a couple hundred million more a year, though that at least comes with the promise of new service. And in New York, the money is coming from those using transit, while in Chicago, it’s from everyone, including the nine out of 10 commuters who drive.

Federally, a study commission told Congress last week it should at least double the tax on gas to maintain mobility. Its recommendations seemed to keep mentioning transit, which now gets about 20% of gas tax money though nationally it bears less than 5% of travel. U.S. Secretary of Transportation Mary Peters dissented, saying gas taxes are high enough. She’s onto something. It’s common in government but particularly visible in transit that when there’s more money to be had, there’s always something new to soak it up. It’s as if there were a transit-tax version of Say’s Law, supply creating its own demand. The more money there is, the more holes there are for it to flow into.

Chicago shows the grafty side of this. As Steve Stanek, who follows tax issues for Chicago’s Heartland Institute, puts it, “You have a city where corruption is a way of life.” It’s not surprising that a report by Illinois’ auditor general found that maintenance was routinely deferred. Money coming in from existing transit taxes was going to featherbedding and lavish staff benefits — lifetime coverage after three years’ service, so forth.

The deal to raise taxes imposes some pension and benefits reforms, but Mr. Stanek has his doubts. “If you can bring in more revenue, then you don’t have to get serious about weeding out the corruption,” he says. “You don’t have to get serious about what your core functions are.”

So, in a transit network that hasn’t offered a lot of new service — Chicago has added only one new commuter line and only one new rapid transit line in the past two decades, mainly extending commuter lines incrementally — costs have been rising 6.5% a year while tax revenue has been rising 2.2%. Ridership and market share have fallen. Haven’t these been signals to rationalize costs? No, not when you’re due a guaranteed share of every sale in the retail hub of the Midwest and you’re confident the governor can assemble a majority to raise that share.

“We need to expand (transit) very rapidly,” and the old sales tax wouldn’t cut it, said Richard Harnish, head of the Transit Riders’ Alliance, last fall. What kind of tax would? He didn’t say. The critical thing was to get more: “It’s just the step of the community making the commitment,” and now that’s happened.

More such steps presumably will follow. State officials say the free rides offer was so popular, the state’s adding a second hotline to take the calls. Meanwhile, Chicago’s bidding for the Olympics, usually a party that requires lots of new rails. Mr. Beaubien says that giving in to demands for a higher rate of transit tax has unleashed something.

“We can’t stop them,” says the lawmaker, dismayingly. “Who knows how much they’ll tax?”

Mr. McIlheran is a columnist for the Milwaukee Journal Sentinel.