A state funding plan to close SEPTA’s budget deficit is in sight – but very, very slowly, lawmakers and transportation advocates say.
A intricate and controversial agreement on modern gambling taxes is still being negotiated. Some lawmakers may not want to take a difficult vote ahead of the upcoming presidential and legislative elections, and after the elections, the state House and Senate have only two more session days scheduled this year.
“I have no idea what legislation is being written or what the pending legislation is,” said Anselm Sauter, who handles state affairs for the Greater Philadelphia Chamber of Commerce. “This isn’t the first time they’ve tried to do this either. Doing this within the limited number of trading days that are available is therefore extremely complex and very difficult.”
“A lot depends on progress this week and next,” SEPTA spokesman Andrew Busch said Wednesday.
SEPTA says that without a larger, eternal infusion of funding, it will have to not only raise ticket prices by as much as 30%, but also reschedule buses and trains to less repeated frequencies and even suspend some transit routes altogether.
“It will impact everyone in all modes,” Busch said. “This is what we are desperately trying to avoid – the ‘services cut off’ bit.”
Raising fees and eliminating services would first require months of public hearings. So to ensure that the resulting savings arrive on time and prevent the transit agency from running out of money, it should begin contingency planning soon.
For SEPTA workers, transit riders and their employers, the lack of a resolution could mean a terrifying Halloween — as well as Thanksgiving, Christmas and beyond, through January and maybe February — until the Legislature finally adopts a sweeping transportation funding agreement.
SEPTA is already planning relatively diminutive ticket price increases come into force in December. If an increase in long-term funding isn’t confirmed quickly, “we’ll have to change something, probably early next year, and that would be a much more drastic plan,” Busch said.
You are looking for “skill games” to get some relief
Republicans who hold a majority in the state Senate have for months refused to accept Gov. Josh Shapiro’s funding proposal. He wants to increase the amount of annual sales tax revenue devoted to mass transit statewide by $283 million.
SEPTA and other transit authorities he never fully recovered before immense drops in ridership during the pandemic and emergency federal aid drying up, leaving holes in their budgets. Shapiro’s proposal would give SEPTA an additional $161 million a year and, combined with money from other sources, would aid it reduce its $240 million annual deficit. SEPTA’s total operating budget is $1.69 billion.
But GOP leaders want to combine those funds with additional money for roads, bridges, airports and other transportation infrastructure. They are a higher priority in their neighborhoods, many of which have little transportation.
They also say that although the Pennsylvania government has multi-billion budget surplusit is spending tax revenues faster than they come and must offset any modern expenditures with modern sources of cash.
They want to cover higher transport expenses by regulating and taxing arcade games, the so-called legally insecure slot machine-like video games which are becoming an increasingly common sight in bars and convenience stores.
This means that the fate of SEPTA and the broader transit funding debate are now tied to unrelated disputes within the Republican Party over the structure of these taxes.
Previous efforts to legalize skill games have failed due to concerns about encouraging gambling, fears it could lead to crime, proposed singles tax rates and opposition from casino operators.
A waiting game, Republicans say
According to Rep. Ben Waxman, who represents part of Philadelphia in the Democratic-led House, essentially regulating skill games is a demand that at least some Republicans want in exchange for agreeing to more transportation funding.
But the GOP has yet to introduce a bill, leaving Democrats and their transit-dependent constituents biting their nails and watching time pass as SEPTA prepares for doomsday.
“The transit agreement now has to do with the Senate’s inability to compromise and its inability to get its own members to support what we were supposedly going to trade,” Waxman said. “The action now depends solely on the Senate, and from this side of the building you can only hear crickets. We’re in a really precarious place.”
“As I understand it, there is some division in Republican circles about which proposal to propose,” said Sen. Sharif Street. “They can’t agree within their club on how we should finance it. “I’m a little frustrated that I don’t sense enough of a sense of urgency from the Senate Republican caucus.”
Electronic gaming terminals are also controversial among Democrats. In March, the Democratic-led Philly City Council voted to ban them from premises that do not have a immense catering area and a casino or alcohol license. The state Supreme Court is currently considering whether they should be considered unlicensed gaming machines.
But in his state budget proposal earlier this year, Shapiro proposed legalizing and taxing them, saying they would bring in $150 million this fiscal year and double that amount in the future. Spotlight PA reported. The governor recently reiterated his support for legalization, and Street said Democrats have enough support to pass the bill.
“Under the right circumstances, I might vote for legislation to regulate skill games,” Street said. A package of bills that implements necessary reforms in the industry while also generating revenue from transit and transportation “makes a lot of sense,” he said.
‘I’m desperately trying to avoid’ service cuts
Given the lack of action in the Senate, transportation advocates say they are concerned about the real possibility that SEPTA will have to make deep cuts to service, such as by closure of the Chestnut Hill West Regional Rail linewhich in the past was characterized by low passenger numbers.
Once a line is suspended, restarting it can be costly and “extremely difficult,” said Busch, the SEPTA spokesman.
“You’re talking about a lot of maintenance on vehicles, tracks and other infrastructure that you really have to deal with every day and you know you’re going to be able to fund it,” he said. “We’re really desperate to avoid this.”
Some members of the Chamber of Commerce are concerned about a doomsday scenario in which SEPTA cuts off-peak service as it did during the pandemic, which would make it harder for many workers to get to work, Sauter said.
“If that happens, and it’s certainly an assumption that many employers have made, it could impact the way they make investments in Pennsylvania, it could impact their ability to access talent and it could actually require them to make decisions about their employment. business locations,” he said.
State Sen. Nikil Saval said that ample and productive mass transit will be indispensable in 2026, when the sesquicentennial celebration, the FIFA World Cup, the MLB All-Star Game and other events are expected to draw millions of tourists to Philadelphia.
“How will we have this celebration on the scale we want if SEPTA lines are cut and service is reduced? This is unacceptable,” he said. “If management and administration are unable to reach an agreement regarding [funding]the consequences will be enormous.”
At the same time, Sauter and others said there is good reason to expect lawmakers and the governor will eventually reach an agreement and that even if SEPTA begins planning deep service cuts, it will have time to rescind them before they take effect.
SEPTA budget battles often end in last-minute drama. In 2013, the transit agency announced plans to cut as many as nine Regional Rail lines early Law 89 came into force in November and ushered in a period of relative financial stability. In 2007, just like today, SEPTA went public a fair increase of 31% is possible. and massive layoffs before House Bill 44 was approved allowed billions in highway toll revenue to flow to transit.
