Southeastern Pennsylvania Transportation Authority (SEPTA) on Nov. 22 reported that it will “postpone” the proposed 21.5% fare hike across all modes that would have taken effect Jan. 1, 2025, following Pennsylvania Gov. Josh Shapiro’s announcement of “stop-gap funding” that will help the transit agency fill its operating budget deficit for this year.
The fare increase was proposed by SEPTA in early November, and public hearings had been set for Dec. 13. It was the second increase the transit agency had recommended to help address the budget deficit.
The SEPTA Board on Nov. 21 approved the agency’s first fare increase, which will up subway, trolley and bus fares by an average of 7.5% starting Dec. 1. That fare increase, which is slated to generate an additional $14.4 million in annual revenue for SEPTA, is not impacted by the Governor’s announcement.
Like many other transit agencies, SEPTA has reported hitting “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 the agency. That created a $240 million annual budget deficit in the current fiscal year, which ends June 30, 2025, and beyond.
Gov. Shapiro on Nov. 22 directed PennDOT Secretary Mike Carroll to begin the process of transferring $153 million in federal highway capital funds to SEPTA to prevent the planned 21.5% fare increase, as well as immediate service cuts. This action temporarily reallocates funds from projects not yet under way, according to the Governor’s Office, which noted that it is “a standard practice in Pennsylvania and across the nation,” and will allow SEPTA to “maintain critical operations” through at least July 2025.
The $153 million being “flexed” to SEPTA covers the agency’s projected operating budget gap through the current fiscal year, SEPTA reported. However, it said, “SEPTA still faces an annual, structural budget deficit of at least $240 million without a permanent solution to Pennsylvania’s public transportation funding crisis.”
“The Governor’s continued support for SEPTA and public transportation is greatly appreciated, and it gives us a lifeline,” commented SEPTA Chief Operating Officer Scott Sauer, who will begin serving as interim General Manager when Leslie S. Richards steps down from the position Nov. 29. “SEPTA will continue to focus on providing safe, clean, and reliable public transportation while taking steps to cut costs and enhance efficiency throughout the organization.”
SEPTA reported that it will “continue to work with its funding partners in Harrisburg on a long-term funding solution in the coming months.” In the meantime, the agency added, it “will have to prepare for the possibility of large fare increases and service cuts starting in summer 2025 if new funding is not in place.”
