Philadelphia, PA (December 14, 2006) — Following many years of financial uncertainty, 2007 could be an historic year of decisions for SEPTA. It could be the year that Pennsylvania will decide whether public transportation will continue to serve its vital role in the economy of southeastern Pennsylvania, or whether it will be crippled by massive reductions in service and increases in fares. While this outcome is not yet known, one thing is certain. The years of confusion, frustration, repeated crisis and uncertainty about SEPTA financing could possibly come to an end. Have we reached our final crisis?
Governor Rendell and the State legislature are facing extremely difficult decisions regarding the future of public transportation. However, we are optimistic about the future because of the deliberate and serious manner in which the transportation dilemma has been approached by several arms of State government.
For the last 18 months, the bipartisan Pennsylvania Transportation Funding and Reform Commission, established by an Executive Order of Governor Rendell, has conducted one of the most thorough and professional studies of all aspects of public transportation in Commonwealth history.
The Commission’s key finding regarding public transportation in the State is succinct:
The financial underpinning of the Commonwealth’s transit program is inadequate and the program structure is dysfunctional. The program and revenue streams need to be completely revamped.
Some of the Commission’s key findings specific to SEPTA are equally succinct:
- SEPTA delivers efficient operations compared to peers its size.
- SEPTA is keenly focused on management of its operating budget.
- SEPTA’s aging infrastructure demands are not being met
Hopefully, the future of public transportation funding will be addressed by the Governor and Pennsylvania legislature during 2007. However, the SEPTA Board must prepare for all contingencies. (SEPTA is required by state law to have a balanced budget adopted on or about June 30th.)
The SEPTA Board must address two separate budget issues: resolve the remaining $36.8 million deficit in the FY 2007 Operating Budget and the deficit (anticipated to be between $120 to $140 million) in the FY 2008 Operating Budget, which begins July 1, 2007.
Given our current situation, and with great reluctance, staff will recommend at the December 21st Board meeting to resolve the FY 2007 deficit by deferring $36.8 million in Capital projects and transferring those funds to the Operating Budget. This method of “robbing Peter to pay Paul” is counter-productive and debilitating to the maintenance of SEPTA’s extensive infrastructure. It is, however, a reversible action if additional funding is received.
While the above action would balance the FY 2007 Operating Budget without any cuts in transportation services or fare hikes, it would stall important projects such as the modernization of the fare collection system, modernization of the Regional Rail electrical substations and rehabilitation of stations on the Broad Street Subway, among others.
Pending legislative relief for transit funding, SEPTA staff must prepare for all contingencies for the upcoming Fiscal Year 2008 Operating Budget. Without new revenue, it would be impossible to balance the budget without devastating cuts in service and a monumental hike in fares. Specific recommendations on the FY 2008 Operating Budget will not be made until March 2007. Public hearings, as required, would be conducted in April, with staff recommendations presented to the SEPTA Board in May.
The debate in Harrisburg over transit and highway funding is going to be long and difficult during the next few months. There are no easy answers or inexpensive solutions. We believe, however, that the report of the Transportation and Funding Commission has established a comprehensive base of information from which to begin the public discussion.
