SEPTA will raise fares by nearly 30% through January and prepare to close dozens of routes after the state Legislature refused to approve increased funding for the beleaguered agency.
These measures are expected to result in a 23% drop in ridership and revenue and lead to a “death spiral” of further fare increases and service reductions that will make public transit “irrelevant” in Philadelphia and the region, Chief Operating Officer Scott Sauer he said on Tuesday.
“We have been pushed into a situation where we are dealing with the collapse of SEPTA, a public transportation system that serves one of the largest metropolitan areas in the country and powers the economy of our region and the Commonwealth,” Sauer said at a news conference.
“While other states invest in new services and infrastructure, we will suspend the operation of our vehicles and close stations. Rail lines will become so sparse that they will be useless to most of our customers,” he said.
The five-county transportation agency has warned for months that the end of federal pandemic relief aid would leave it with a $240 million annual budget gap that would lead to higher fares and less service unless the state steps in with a enduring funding boost.
In February, as part of his annual budget negotiations, Gov. Josh Shapiro proposed allocating more sales tax revenue to transit agencies across the state, including $161 million more annually for SEPTA.
The Republican-led state Senate has refused to take up this measure or the alternative idea of funding transit and transportation through a fresh tax on video slot machines. The last scheduled day of parliament’s session this year is Wednesday, making it unlikely that parliament will present a rescue plan at the last minute.
“It’s the result of passivity. This is the result of the lack of a long-term financing solution,” Sauer said. “All of our stakeholders and all of our legislative allies have worked extremely hard to see a solution through to the end. It didn’t happen.”
The decision was made amid a possible strike by SEPTA, organized by the transit workers’ union, whose contract expired last week. The agency wants to reach an agreement on a “fair contract,” Sauer said, but cannot do so without the promise of more state funding.
Some regional rail lines will be suspended
SEPTA was already planning a relatively modest fare escalate, the first in seven years, that will raise fares by an average of 7.5% on December 1. The escalate announced on Tuesday will raise ticket prices by an additional 21.5% from January 1.
The combined effect will be to escalate the price of rides within Philadelphia to $2.90, up from $2.50 for the current base fare and $2 when paying with a SEPTA key or app. Weekly TransPass will escalate from $25.50 to $31, and monthly TransPass will escalate from $96 to $116.
For regional rail, single-trip weekday fares will escalate from $4 to $5 for Zone 1, from $5.50 to $6.50 for Zone 2, from $6.50 to $7.75 for Zone 3 and from $7.50 to $8.75 for Zone 4. Trailpass ticket increases include a fresh $69.75 price for weekly Anywhere pass and $255 for a monthly Anywhere pass, down from $204 Now.
SEPTA dispatched full list of proposed increases before planned public hearings on the changes. They will be held on December 13 at 10:00 a.m. and 4:00 p.m. at the Pennsylvania Convention Center.
Given the expected decline in ridership, the higher fares will escalate SEPTA revenue by $23 million in fiscal year 2025 and $45 million the following year, officials say. They will take the agency through the year, but they will not close the structural budget gap.
Sauer, who will become SEPTA’s interim CEO later this month after current agency leader Leslie Richards steps down, said the 20% service reduction is still being finalized and will be announced in early 2025.
“Dozens of routes will be eliminated, and those that remain will operate with much less frequency,” he said. “I’m not just talking about bus routes or even train routes. It’s everywhere. The cuts will happen across the system, in every mode and in every county we serve.
“We will continue with some version of each mode, but… depending on the severity of the cuts, some customers simply won’t be able to utilize it. And the service that was left could be so crowded that there would be no room for everyone. So we also have the effect that whatever we put out there will be so popular that we will leave people behind,” he said.
Democratic state Rep. Ben Waxman, who represents part of Philadelphia, said he expects at least two regional rail lines to be completely turned off and several others will be shortened and fewer trains will run. Community activists in Northwest Philadelphia expressed concern Chestnut Hill West Line may be the first to leave as it has had low passenger numbers in the past.
Asked whether the agency would also lay off any staff at its headquarters on Market Street in Center City, Sauer said “nothing is out of the question at this point,” including layoffs and pay cuts.
No “flex” financing for the rescue
Democratic lawmakers and transit advocates have been expressing increasing concern for several months about the dwindling prospects for a state budget amendment to SEPTA.
On Tuesday, council member Jamie Gauthier blamed Harrisburg Republicans for the crisis and called on them to “prevent this irreversible death spiral.”
“My constituents in West and Southwest Philadelphia rely on SEPTA to get to work, school, health care and other essentials. Reliable public transport is absolutely vital to the economic success of both my constituents and the Commonwealth. “I shudder to think of the catastrophic damage that will be done if SEPTA’s proposed fare increases and service price reductions go into effect,” she said.
She urged the Senate to pass House Bill 2625, which passed in the Democrat-led House. It would escalate the percentage of sales and utilize tax collections that go to the state’s public transportation trust fund from 4.4% to 6.15%, as Shapiro proposed.
Shapiro spokesman Manuel Bonder said the House of Representatives has passed the funding plan three times this year.
“The Governor believes it is time for the Senate to send these funds to his desk to support mass transit across the Commonwealth, spur economic growth and ensure Pennsylvanians get to their destinations safely and efficiently,” he said.
As a short-lived measure, Transit forward in Philadelphia a coalition of advocates says Shapiro should utilize his executive power to shift some federal highway funding to transit, as Gov. Ed Rendell did in 2005 during the previous budget impasse and threatened to do in 2010.
The group says the money could be added to SEPTA’s budget for capital projects and free up some dollars for operations, which would allow the agency to postpone price increases and service reductions.
Bonder declined to comment on whether Shapiro was considering “making more flexible” federal funding, and Sauer said he had not heard of any such plans.
“I am aware that something like this occurred many years ago, but I am not aware of any specific information coming out of Harrisburg at this time,” he said.
He said that the budget crisis will not have a direct impact on already financed investment projects, such as: Contract worth $724 million to exchange cars at Market-Frankford El.
‘Heartbreaking’ decline in popularity of public transport services
SEPTA has previously said fare increases and service reductions won’t be announced until 2025 unless Shapiro and the Legislature agree to a budget escalate. The announcement was made the same day as the Senate held its first session since the election, but Sauer said it was not the time to pressure the Legislature to take action.
“I’m not here to deliver a message. I’m here to tell our clients and advocates, and anyone else who wants to know, that this is the result. This is the fiscal cliff we’ve been talking about for several years. This is the end. Without a permanent funding solution, this will happen early next year,” he said.
Sauer noted that he started working for SEPTA as a rail operator 34 years ago, and his father also worked for the agency.
“This is a family business. That’s what my family does. That’s what a lot of SEPTA families do,” he said. “I wouldn’t be here in front of you today if it weren’t for SEPTA, and there are so many people like me, so it’s very heartbreaking to see us in this state of decline. This doesn’t have to happen.”
He argued that SEPTA employees “have done everything we can” to address various challenges in recent years, including maintaining service during the pandemic, cleaning and safety efforts to combat the escalate in crime and disorder in the system and to deal with inflation, which increases the costs of fuel, energy and supplies.
Serious crimes are down, customer service scores and passenger numbers are up compared to the pandemic, and the agency is pursuing long-term initiatives such as the redesign of the Bus Revolution network – although these will now have to be scaled back, he said. It reduced costs and increased revenues by reintroducing parking fees at Regional Railway station parking lots.
“We want to provide our customers with a more reliable service. We want to develop. We want to do the opposite of what we are proposing today,” Sauer said.
“Allowing SEPTA to exceed the fiscal cliff and force massive fare increases and service reductions will result in a net loss to our society,” he said. “A less transport, less economically productive, socially just and environmentally sustainable region will not help anyone.”
