With Pennsylvania’s budget impasse dragging into its second month, SEPTA is preparing to slash service starting Aug. 24 after lawmakers failed to agree on a plan to close the transit agency’s $213 million budget gap.
Without new state funding, SEPTA says the cuts will be followed by fare hikes and a hiring freeze in September, and a second round of reductions in January that would ultimately trim service by 45 percent.
The Republican-controlled state Senate on Tuesday passed a funding bill sponsored by Sens. Frank Farry (Bucks), Tracy Pennycuick (Montgomery), and Joe Picozzi (Philadelphia) that would use money from the Public Transportation Trust Fund to cover SEPTA’s operations for two years. The plan also includes safety improvements, stronger fiscal oversight, and biennial progress reports. Supporters say the trust fund’s projected $3.7 billion balance by 2030 leaves room to cover both operations and capital projects.
Democrats, who control the House, blocked the measure in committee Wednesday, calling it a “raid” on capital funding. They favor a House-passed plan to increase the share of the state sales tax going to transit agencies and issue $600 million in bonds for road construction to address Senate GOP concerns.
With the state budget impasse dragging on for more than a month, it appears SEPTA won’t get the funding it has requested. The transit agency plans to implement drastic service cuts starting Aug. 24.
SEPTA asked the legislature to fill a $213 million budget deficit. Otherwise, the cuts to service will be followed by fare hikes and a hiring freeze in September. Another round of cuts in January would follow, totaling an eventual 45 percent reduction in service.
The plan from Republicans Farry, Pennycuick, and Picozzi, HB257, failed to pass in the Democrat-controlled House. That funding plan overall exceeds the governor’s plan and would result in fully funding SEPTA’s operations for the next two fiscal years, the trio said in a press release.
In addition to addressing SEPTA’s funding crisis, House Bill 257 also improves safety for commuters and workers and holds SEPTA more fiscally accountable through greater oversight, both of which SEPTA clearly needs, they said.
The Public Transportation Trust Fund (PTTF) currently has over a $2.4 billion balance. Over the next five years, the proposed capital projects for all mass transit in Pennsylvania total $1.28 billion. The fund’s projected revenue in the next five years, without interest, is over $2.5 billion, and the estimated fund balance heading into 2030 is over $3.7 billion, even after funding capital projects for the next five years, Farry, Pennycuick, and Picozzi said. That plan was approved Tuesday along party lines in the Republican-majority Senate. Some $3.9 billion would be left in the fund balance.
“These are the facts. These are PennDOT’s own numbers. This fund balance allows for even more capital projects to be funded in the future,” the senators said.
Democrats have slammed the proposal as amounting to essentially a transit cut by “robbing” the capital fund, and a State House committee voted along party lines to reject it Wednesday. House Democrats, with the support of some Delaware Valley Republican representatives, had passed a bill to increase SEPTA funding.
Late last year, Gov. Josh Shapiro announced that he was shifting federal highway funds to SEPTA. Philadelphia, Montgomery, Bucks, Delaware, and Chester county officials also offered to pay more toward SEPTA. A program that gave SEPTA some funding from Pennsylvania Turnpike tolls ended in 2022.
SEPTA’s ridership is still below pre-pandemic levels. Meanwhile, labor and operating costs have grown. SEPTA officials claim they have already done all they can to solve the issue on their own, including freezes on management pay, a fare hike, and the return of paid parking at regional rail lots. The only solution left, the transit agency says, without new cash, is to cut service.
SEPTA’s other problems include crime, reliability, and cleanliness.
Picozzi seeks to reconcile differences. The freshman state lawmaker proposed new accountability measures for the agency. Under Picozzi’s plan, SEPTA would have to report on progress toward fiscal stability every other year. It would also seek to curb fare evasion, encourage more public-private partnerships within the agency, and place SEPTA under a state-mandated improvement plan if it fails to make progress.
Scott Sauer, SEPTA general manager, spoke favorably about the proposal, and a spokesperson for SEPTA reiterated that in a statement. “Safety and security, accountability and transparency, and efficiency and innovation are central to our stewardship of SEPTA,” he said. “We have a number of efforts already underway that are consistent with the measures outlined in this bill, and we look forward to a future where we can do more – rather than enacting devastating service cuts and dismantling the transit system.”
Picozzi told DVJournal he thinks his proposal has been instrumental in making progress with colleagues who are worried about funding SEPTA with no strings attached. “I think that people in Northeast Philadelphia, and I also think my colleagues in the Senate, want to see safety and accountability as part of any deal,” Picozzi said. “And my hope is the work that I’ve done on this issue can be what breaks us free and gets this done.”
The House on Monday, in a bipartisan vote, passed a nearly $300 million proposal to increase the amount of funding public transit receives from the state’s sales tax, along with $600 million in bonds for road construction as a nod to Senate Republican concerns. The chamber also passed some transit accountability measures, like combating fare evasion, a sign Picozzi’s proposal was gaining steam.
But the deadlock remains.
Sauer said the Senate proposal would cause problems down the road if they had to transfer capital funding to operations. That claim led to a rebuke from House Minority Leader Jesse Topper (R-Bedford/Fulton).
“No solution is going to be perfect,” he said. “But when SEPTA is offered funding and then proceeds to tell the House of Representatives that it will shut down operations because the funding solution is not perfect, it shows how disingenuous folks in this process have been about their real desire to avert calamity.”
On Aug. 24, SEPTA plans to eliminate 32 bus routes and alter many others. On September 1, a fare increase will take effect, along with a hiring freeze later that month. On Jan. 1, 2026, five regional rail lines would be eliminated along with 18 other bus routes, plus a 9:00 p.m. curfew on all rail service, amounting to a 45 percent cut in service.
Baruch Feigenbaum, senior managing director of transportation policy at the Reason Foundation, has extensively researched the pandemic’s effect on transit agencies across the U.S. He said most are facing financial headwinds similar to SEPTA’s, but the Delaware Valley transit agency is unique in that it relies primarily on the state for funding rather than local governments.
“In most places, it’s actually the counties or the cities that provide, if not the majority, a large amount of funding,” Feigenbaum said. “The logic being if transit is primarily a local service, it should be something local folks are paying for.”
Feigenbaum added that none of the six major U.S. transit agencies have adapted well to the post-pandemic landscape, which he said will have lower ridership than 2019 for many years to come. He believes better solutions than just more funding or service cuts include redesigning service networks, increasing opportunities for advertising revenue, and cutting labor costs.
“And there probably will need to be some increases in funding and decreases in service, but you can mitigate both of those by using some more creative practices,” Feigenbaum saidbably will need to be some increases in funding and decreases in service, but you can mitigate both of those by using some more creative practices,” Feigenbaum said.