Southeastern Pennsylvania Transportation Authority (SEPTA) will increase subway, trolley and bus fares by 7.5% starting Dec. 1.
The move, proposed in September, was approved by the Board on Nov. 21, SEPTA reported. It is the first of two fare increases the transit agency has recommended to help address a $240 million annual budget deficit as federal COVID relief funds run out. The second increase, which SEPTA proposed earlier this month, would see fares rise 21.5% across all modes and methods of payment starting Jan. 1, 2025. SEPTA said that it will hold public hearings Dec. 13 regarding the second proposal, which the Board could vote on Dec. 19.
“This historically high fare increase would be paired with major service cuts, which SEPTA expects to announce and hold public hearings on in early 2025,” the transit agency reported. “While some details of the service reduction plan are still being finalized, it would result in an overall 20% cut in service across all modes.”
SEPTA said that together, the two fare proposals would generate nearly $50 million in new revenue annually, but “ridership losses likely due to the combined effect of higher fares and declining service levels” could lower that number.
SEPTA’s last fare increase was in 2017. Planned fare increases in 2020 were deferred due to the pandemic, the transit agency said.
SEPTA previously reported that like many other transit agencies nation-wide, it has hit a “fiscal cliff” as a result of the pandemic. One-time federal COVID relief funds were used to help cover the everyday expenses of running the system—maintaining service during the pandemic and supporting the post-pandemic recovery—and those funds were exhausted this past spring, according to SEPTA. That has created a $240 million annual budget deficit in the current fiscal year and beyond.
“SEPTA’s ridership continues to grow every month, as more people return to in-person work,” the transit authority noted. “But increased fare revenue cannot cover all the costs that SEPTA has had to take on over the last few years to enhance cleaning, safety, and security for riders and employees. In addition, inflation has resulted in increased costs for fuel, power, supplies, and other items that are needed for day-to-day operations, adding to budgetary pressures.”
In July, SEPTA received a one-time infusion of $46 million in additional state support, which combined with $7 million in local match, bridged the budget gap until the fall. “Even with the additional fare revenue and some savings from service and cost-cutting, SEPTA still expects it will have to take more actions to close the budget deficit for the current fiscal year, which ends June 30, 2025,” the transit authority has reported.
A number of austerity measures to cut costs are being pursued, according to SEPTA. Among them: “expanding an existing hiring freeze to include all open management and administrative positions that are not safety- or operations-critical and reducing contract and consulting services.” Other cost-cutting measures are being examined, it said, and will be put in place before the end of December.
“For two years, we have been warning about the dire consequences facing SEPTA—and our region—due to the looming fiscal cliff,” SEPTA Board Chair Kenneth E. Lawrence Jr. reported on Nov. 21. “With no prospect of a statewide solution to help fund the everyday operating expenses of public transportation systems, we have no choice but to continue plans to confront this stark reality.”
“This is not a position we ever wanted to be in,” added SEPTA Chief Operating Officer Scott Sauer, who will serve as interim General Manager when Leslie S. Richards steps down Nov. 29. “We have been investing carefully in service enhancements and customer and employee safety initiatives to improve service and bring more riders back to the system, and those efforts are paying off. We need a funding solution that will ensure SEPTA can provide the level of service our region needs and deserves.”
