SEPTA to receive $153 million in "flexed" state highway funds, covering budget shortfall
Pennsylvania is redirecting or "flexing" $153 million in federal highway money to SEPTA, enough to cover its deficit, officials announced Friday.
Gov. Josh Shapiro, speaking at Frankford Transportation Center in front of several state and local political leaders, announced the money would come from seven highway projects that had not yet been put out to bid.
The funding will help keep SEPTA afloat until the next state budget deliberations in the summer.
Shapiro said that the counties served by SEPTA will also be increasing their contributions.
As SEPTA faced a budget shortfall due to expiring COVID-19 pandemic relief funds, Shapiro had been called upon to help fund the transit agency that serves the Philadelphia region before drastic proposed service cuts and fare hikes were implemented. Shapiro had been under fire as SEPTA's budget shortfall remained and no annual funding increase was passed before state legislators went on recess until January.
A podium was set up flanked by two SEPTA buses. On the digital sign where the bus would normally display its route number was text that read "SEPTA Thanks Governor Shapiro."
"Thank you for not just talking the talk but walking the walk and delivering on today," Philadelphia Mayor Cherelle Parker said.
The federal money will stave off a 21.5% rate hike and 20% in service cuts SEPTA had planned to go into effect on Jan. 1. Still in effect, however, is a 7.5% fare hike for Regional Rail routes and the removal of the discount for SEPTA Key users.
Shapiro, a Democrat, wanted to allocate an additional $282 million per year to public transit agencies across the commonwealth, including an additional $161 million for SEPTA, with revenue coming from a tax on skill games. The state House, narrowly controlled by Democrats, passed the measure, but the Republican-controlled state Senate did not.
"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 said in the news conference. "I've made clear that I will not let SEPTA fail."
The money will prevent the service cuts and fare increases SEPTA had posed when faced with the funding gap.
"There is no reason to keep that money on our balance sheet in the state when we can invest it in SEPTA right now and help this community," Shapiro said.
Democrats say transit funding needs to be a priority when they return to Harrisburg next year, but Senate Republican leaders criticized Shapiro's move.
Senate Majority leader Joe Pittman released a statement, saying in part, "Rather than making prudent, sensible changes, they have chosen to politicize and pillage critical infrastructure projects for other districts. The bottom line is that there must be a significant overall re-examination of the SEPTA delivery model and mass transit."
On Wednesday, SEPTA reached new labor agreements with unions that had threatened to strike. The infusion of federal dollars also funds the increases in salaries and pensions for those workers.
In a press conference announcing the first of those labor deals, SEPTA Interim General Manager Scott Sauer identified the agency's deficit as $153 million — the same amount that was redirected Friday.
While Friday's announcement had a celebratory mood at SEPTA's Frankford Transportation Center, it also came with a warning.
"This was the solution we needed to plug the hole in the boat this year, but it comes back July 1," Sauer said.
"Flexing" of funding follows resolution from Philadelphia City Council
A resolution introduced in City Council last week and passed Thursday called on the Shapiro administration to do what was announced Friday: "flex" federal highway funding from the Bipartisan Infrastructure Law toward SEPTA.
Council President Kenyatta Johnson explained more about the resolution in a thread on X.
Thank you to my @PHLCouncil colleagues for approving Resolution # 241075, calling on Governor Josh Shapiro & @DVRPC to stave off fare hikes & service cuts to @SEPTAPHILLY by flexing federal infrastructure funds from state highway projects to local transportation authorities.
— Kenyatta Johnson (@CouncilmemberKJ) November 21, 2024
Councilmembers said the move would help bolster SEPTA's plan-for-the-future capital budget and free up money that could be used for the day-to-day operations budget, which is where the funding issue was.