Without commenting on whether the CTA is underfunded or spending the money on the wrong things....
As a relatively new daily user of the CTA (buses and trains, both) it is immediately apparent to me that pretty much the entire infrastructure needs to be ripped out and replaced from the get go. The differences in the CTA experience and those of the DC Metro, the London Tube, BART, even the NYC system and on and on are just plain shocking. The rail stations are old, the tracks are falling apart, everything is filthy.....but I'm not saying anything you all don't already know. I've actually been pleased and surprised at how well the Chicago Card Plus system seems to work - the CTA can get some things right. Now, why does the CTA lack basic things (like signs that tell you when the next train is expected or signs in the cars that tell you the next stop and on which side of the train the doors will open) that are just taken for granted on every other system I regularly ride.
I'm not sure how many of the really bad buses are still in out there, but there was certainly a period of time where the CTA was buying used buses from other cities that had declared them unfit for future service.
The current great hope is that we'll see a huge infusion of money in connection with the Olympics, but it is just as likely that the dismal circumstances of the CTA will actually turn out to be one reason that we don't get them.
There are actually two needs, an infusion of infrastructure money combined with adequate money to fund the daily operations. I doubt we'll see either out of Springfield.