In order to help the beleaguered transit organization escape severe service cuts and significant fee increases, at least temporarily, Governor Josh Shapiro will direct $153 million in federal highway cash to SEPTA.
As buses flashed a thank-you message to Shapiro, he said Friday in Philadelphia, “Just like we prepare and maintain our roads and bridges in those rural and in those suburban communities, I think we owe it to the good people of Pennsylvania who take mass transit to be there for them and their families as well.”
Shapiro’s announcement, according to SEPTA, enables the organization to avoid a 30% fare increase scheduled for January 1.
The Philadelphia-area organization will, however, carry out its plan to do away with a discount for passengers who board buses, trolleys, and subways using the system’s Key card. The adjustment effective December 1st translates into increased fares for commuter rail users and a 50-cent hike for transit users.
Transferring highway funds to SEPTA is only a short-term fix that won’t be sufficient to reduce the agency’s $240 million deficit. Board Chair Ken Lawrence issued a warning that unless SEPTA obtains additional financing, additional service cuts would start on July 1, 2025.
That schedule coincides nicely with the June 30 deadline for the state budget. To create a budget plan, lawmakers usually spend the most of the month in Harrisburg. In February, Shapiro’s budget address will kick off negotiations.
Currently, Pennsylvania contributes about $2 billion to more than 50 public transportation organizations around the Commonwealth. One of the main beneficiaries is SEPTA, which in 2023 got $757 million in state sales tax revenue to pay for salaries and other operating expenses.
However, the agency has stated that it needs additional funds to be viable and finish some planned service improvements because of rising inflation, decreased ridership due to remote employment, and the termination of government pandemic aid.
Future cuts, according to transit advocates, could send the agency into free fall since lower ridership results from poorer service, which would further strain its finances.
Eric Rivera, a commuter, said he was not aware of the possible fare increases as he headed up to the El platform at the Frankford Transportation Center on Friday. Though he was concerned about other people, he believed he could afford it.
According to Rivera, “even people who are smart with their money might have to take multiple buses to work; if ticket prices go up, the cost of those transfers could quickly compound.”
The primary source of money for Shapiro’s short-term funding solution is the federal gas tax. The 2021 federal Bipartisan Infrastructure Law increased them even further, and they reached over $2 billion in the fiscal year 2022–2023.
A Democratic governor has previously circumvented the legislative process on transit funding by using executive power. Republicans in the General Assembly have previously criticized the practice, claiming that it pitted rural vehicles against urban transit users.
Shapiro proposed allocating $1.5 billion in additional state funding to public transportation over the following five years as part of his 2024 budget proposal. Republican leaders stated that they could only support the plan if there was a reliable source of funding. Their inclination is to tax and regulate skill games, which resemble slot machines and have become commonplace in social clubs, convenience stores, and taverns.
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In the hopes of reaching an agreement in the fall, state house Democrats managed to gain a one-time budget boost of $80.5 million for transit. Such an arrangement ultimately fell through due to internal GOP disputes, but lawmakers have said the matter will be revisited in the next year.
Republican support is necessary for any agreement. Additionally, Democrats may have to compromise on other policy objectives in order to win GOP support, as the state faces a structural deficit that could deplete its surplus by 2026.
State Senate President Pro Tempore Kim Ward (R., Westmoreland) described SEPTA’s financial difficulties as “a crisis of [Shapiro’s] own making” in a statement released on Friday. She maintained that during this year’s budget process, Democrats ought to have given transportation more funding rather than public education.
