Gov. Josh Shapiro will step in to save SEPTA from a potentially crippling set of fare increases and service cuts, transferring $153 million in state highway funds to the cash-strapped transit agency, he announced Friday in Philadelphia.
The governor said he would divert money from seven highway projects still in the planning stages, allowing SEPTA to rescind a 21.5% fare raise in January and cancel plans to close some regional rail lines and reduce bus and train frequency.
Shapiro said his decision to make funding “flexible” creates a “bridge” for SEPTA for about seven months. The Legislature now has until next June, when the state budget for fiscal year 2026 is finalized, to agree on a indefinite raise in transit funding.
“There is no reason to keep this money on our balance sheet in the state when we can now invest it in SEPTA and help this community,” he told a crowd of elected officials and SEPTA employees at the Franklin Transportation Center, referring to the highway project funding. “And to Pennsylvanians in one of these communities affected by the transfer of these funds, we continue to assure you that your projects will be completed on time.”
Mayor Cherelle Parker and officials from Montgomery and Delaware counties praised Shapiro for reallocating the funds.
“On behalf of the people of Philadelphia and, frankly, the 790,000 residents of southeastern Pennsylvania who rely on SEPTA, thank you not only for the conversation, but for walking and delivering today,” Parker said.
Common calls to flex
SEPTA faces a $240 million annual deficit related to the expiration of a state program that sent highway revenue to the agency, rising costs and the end of federal pandemic aid. The deficit for the current fiscal year is $153 million.
The transit coalition Transit for All PA has been calling for weeks on Shapiro to “reallocate” highway funds to SEPTA, the then-governor said. Ed Rendell did this during previous transit funding crises in 2005 and 2010.
Such moves have drawn criticism from Republican lawmakers who say they pit rural, highway-dependent districts against transit-heavy urban areas. As recently as Tuesday, Shapiro seemed skeptical of the transfer option, calling it a “stopgap measure” that won’t fix structural deficits at SEPTA and other carriers.
Supporters bombarded Shapiro with thousands of phone calls and emails, and Philadelphia council members and area lawmakers publicly urged him to take action to prevent ticket price increases and service cuts. Late Wednesday, the governor’s and Parker’s offices announced they would be making a major announcement regarding SEPTA.
Southeastern Pennsylvania officials gathered in the frosty bus bay at the terminus on Friday – including several city council members, Philadelphia Schools Superintendent Tony Watlington, elected officials from Montgomery and Delaware counties, House Speaker Joanna McClinton and other top party legislators Democratic. Market-Frankford El.
With two buses parked behind him and a group of unionized SEPTA workers standing nearby, Shapiro characterized the funding move as the latest example of his “get on with it” approach to infrastructure and economic development. He also emphasized that transportation includes transportation in addition to the roads and highways that drive most of Pennsylvania.
“I’m aware that for some people when they go to church, for some people when they go to school, and for some people when they just want to go home for dinner, their journey doesn’t take them over the country bridge,” he said. “Instead, it requires riding a bus and living in a community where getting on a trolleybus, regional rail or subway is the only way to get around and the only competent way to get to and from where you need to go.
“So, just as we repair and maintain our roads and bridges in rural and suburban communities, I think we owe it to the good people of Pennsylvania who rely on mass transit to be there for them and their families, too,” he said.
Shapiro and other speakers also noted the contributions of SEPTA’s largest union, the Transit Workers Union, Local 234. Shapiro’s office helped TWU and the transit agency reach a contract agreement this week and narrowly avoid a potentially devastating strike.
We are waiting for a fix
Shapiro’s statement was quickly criticized by Senate President Pro Tempore Kim Ward, a Republican, who called the event a “self-made crisis” and “another example of how simply ‘showing up’ is not enough to solve complex problems.”
Ward tried to tie SEPTA’s problems to an unrelated dispute over private school voucher funding, which the governor initially supported but vetoed earlier this year. “Gub. “Shapiro and House Democrats chose education over mass transit by approving the largest-ever budget increase for a traditional education system that continues to trap Philadelphia’s children in failing schools,” she said.
Meanwhile, Democrats and their allies praised the governor for the transfer of funds, while promising to work with Republicans to find a indefinite funding source during next year’s state budget negotiations.
“This good man today bought us another six months,” state Rep. Matthew Bradford, D-Montgomery County, said at a news conference in Frankford. “We intend to spend the next six months in the most serious way possible to bring this matter to an end and we will not let party or regional politics get in the way.”
Philadelphia City Council members Kendra Brooks and Nicolas O’Rourke praised Shapiro for taking action and said “every level of government” must prioritize finding sustainable revenue for SEPTA.
“Like many Philadelphians, we remain concerned about impending interest rate increases and the structural deficit SEPTA faces,” they said in a statement. “We must use the coming months to find solutions that increase ridership and ensure the sustainability of SEPTA for all Pennsylvanians.”
A smaller tariff raise is still on the way
The cash infusion means SEPTA will no longer hold hearings next month on the proposed 21.5% fare raise and will not announce proposed route closures early next year as planned.
SEPTA Chief Operating Officer Scott Sauer called the transfer of funds a “lifeline” for the agency.
“That fixes us this year,” Shapiro said after Shapiro’s remarks. “In the spring, when we start talking about our fiscal 2026 budget, which goes into effect on July 1 next year, we’ll be right back at it to talk about price increases and service reductions. This money now causes them to procrastinate.”
However, SEPTA will still implement a separate set of fare increases on December 1 that will average 7.5% systemwide.
For in-town passengers who pay with Key cards or apps, the fare will raise from $2 to $2.50. There will also be increases for Key card payments on regional rail and fares paid at kiosks, ticket counters and on trains in Zones 2, 3, 4 and New Jersey. Ticket prices will remain unchanged.
In the past, the agency raised prices about every three years, but skipped the 2020 raise to avoid a edged drop in ridership during the pandemic. The last raise took place in 2017.
SEPTA also put on hold a long-planned bus revolution that would have simplified bus routes and increased service frequency on some routes and was scheduled to begin next summer. Sauer said he remains on hold pending more information about a indefinite raise in state funding.
