Gov. Josh Shapiro will route $153 million in federal highway funding to SEPTA to help the struggling transit agency avoid — at least temporarily — deep service cuts and unprecedented fare hikes.
Shapiro’s announcement Friday came less than two weeks before the agency said it would follow through on the first stage of a fare hike that would dramatically increase hundreds of thousands of riders' costs. By the start of 2025, SEPTA had planned, for instance, to increase fares by almost 50% for people using the system's key card to ride buses, trolleys, and subways.
But routing highway dollars to SEPTA is a temporary solution that won’t be enough to close the agency’s $240 million deficit. The rest, SEPTA has warned, will be covered by service cuts that would begin on July 1, 2025, unless it secures more funding.
Transit advocates warn that these cuts could cause the agency to enter free fall, as worse service begets reduced ridership, leading to further financial troubles.
Pennsylvania currently provides almost $2 billion to 50-plus public transit agencies across the commonwealth. SEPTA is a prime beneficiary: It received $757 million in state sales tax money in 2023 to cover operating costs like salaries.
Still, facing high inflation, reduced ridership because of remote work, and the end of federal pandemic aid, the agency has said it needs more funding to be sustainable and complete some planned service revisions.
Shapiro’s temporary funding solution takes advantage of funds that come primarily from the federal gas tax. They numbered almost $2 billion in the 2022-23 fiscal year, and the 2021 federal Bipartisan Infrastructure Law boosted them even higher.
This isn’t the first time a Democratic governor has used executive power to sidestep the legislative process on transit funding. General Assembly Republicans have chafed at the practice in the past, arguing that flexing highway dollars pits rural drivers against urban transit riders.
Republicans who control the state Senate, however, say they are open to a transit deal. At a news conference earlier in November, President Pro Tempore Kim Ward (R., Westmoreland) said her caucus’ priority is making sure “every area of this commonwealth for transportation is addressed, not just one sector.”
It’s also a top issue for Democrats, including Shapiro who called for more annual transit funding in his budget address this year. That push was unsuccessful due to internal GOP disagreements on how to fund it. Instead, state House Democrats secured a one-time boost of $80.5 million for transit in hopes of a fall deal — which was not reached.
Late last legislative session, Shapiro and the split General Assembly attempted to negotiate a complicated bargain to patch up all state transit agencies’ budgets and also provide new funding for roads and bridges by regulating and taxing thousands of gaming terminals that have popped up in bars and corner stores across the commonwealth.
They failed to reach a deal before the end of session, but have indicated the issue will be back on the table in the new year.
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