Will Harrisburg be able to fix SEPTA’s financial crisis?

While Gov. Josh Shapiro temporarily stopped SEPTA from falling into a “death spiral” by redirecting federal roadway funds to the nation’s sixth-largest public transit system, the fight in Harrisburg to secure a reliable state funding stream is just getting underway.

State lawmakers will spend the next several months deal making to help SEPTA avoid a fiscal crisis, including major rate increases, temporarily stalled by Shapiro’s efforts, for nearly 800,000 residents who use public transportation on a daily basis in Philadelphia and the surrounding counties.

Who is to blame for SEPTA’s funding crisis and why lawmakers couldn’t come together sooner to reach a solution is an ongoing disagreement among top legislative leaders in the GOP-controlled Senate and narrow Democratic majority in the state House, with disagreement from each party on how to move forward.

For top Democrats, including Shapiro, it’s the failure of Senate Republicans to work on the issue. For Senate President Pro Tempore Kim Ward (R., Westmoreland), SEPTA’s funding woes are a “crisis of [Shapiro’s] own making,” instead prioritizing public education dollars over public transit in budget negotiations earlier this year. And according to Senate Majority Leader Joe Pittman (R., Indiana), Senate GOP members are being thrown under the bus by Democrats, instead of proposing realistic solutions.

“If the governor and House Democrats feel they need to use us as a scapegoat, so be it,” Pittman said. “But the reality is, it takes all parties to come to the table to identify solutions to the issues.”

Shapiro put a bandage on the issue last week when he announced he would take the extraordinary step to flex $153 million in federal funds intended for eight roadway projects as a holdover for SEPTA. Without it, top SEPTA officials planned to raise fares by 21.5% across the board and cut services to try to address its $240 million annual deficit that’s a result of fewer people using public transportation post-pandemic.

Shapiro, a Democrat from Abington, made a promise not to let SEPTA fail, after it was clear how much the transit agency would need to raise fares and cut services to stay afloat. Earlier this year, Shapiro proposed increasing the share of how much public transit receives under the state’s sales tax — but not increasing the tax itself — as a dedicated funding stream intended to give transit agencies some stability. Democrats in the state House passed this plan and others on three different occasions, all of which Senate Republicans have yet to act on, said House Majority Leader Matt Bradford (D., Montgomery).

“If they want us to come up with other ideas, we can talk about other sources but frankly, we moved the Rubik’s Cube three times without any meaningful response other than what appears to be moving the goalposts at a time when workers, employers, and the economy are in danger because of the Senate’s inability to act and to govern,” Bradford added.

» READ MORE: SEPTA being hard to fund is nothing new. Here’s how we got here

GOP leaders in the state Senate bucked the plan, however, stating they would not support public transit funding without pairing it with infrastructure funding and cited the state’s structural deficit, in which the state is projected to spend more than it brings in every year for the coming years.

Pittman proposed regulating skill games — which are legally ambiguous, slot-machine look-alikes that have proliferated around the state in restaurants, bars, and corner stores — as a potential new revenue stream, but not all Republicans or Democrats in either chamber have a consensus yet on how to tax and regulate the industry.

“The reality is what the governor and House Democrats proposed is simply taking away revenue from our General Fund to pay for transit, and all that does is make our structural deficit even worse,” Pittman said. “I think frankly, the Democrats’ mindset is, ‘We can just spend more money on transit, and we don’t have to worry about where it comes from.’ And that’s the point of view that our majority in the Senate is not willing to accept.”

Top lawmakers and Shapiro failed to reach a deal as part of the final budget agreement this summer, only setting aside a fraction of what SEPTA and other transit agencies said they needed from the state and only after Philadelphia’s delegation to Harrisburg stepped in to ensure SEPTA got some of the funding it needed to survive the short term until a final deal was reached. Lawmakers left Harrisburg earlier this month without ever coming to that final deal, sending SEPTA into its “death spiral.”

Democrats and Republicans previously showed a willingness to come together on issues regarding SEPTA, with the creation of a SEPTA special prosecutor.

Shapiro will likely pitch a solution as part of his budget proposal in February, but it’s unlikely that a dedicated funding stream would be approved until this summer, when lawmakers and Shapiro are constitutionally required to pass the state’s annual budget. This puts transit agencies across the state, including SEPTA, in limbo until a final fix is reached.