After legislative failure, Gov. Shapiro should ensure transit funding success

Gov. Josh Shapiro and Senate Republicans in the General Assembly have failed to reach a deal on critical transit funding before the end of the legislative session. Without a solution, the commonwealth’s 57 transit agencies — carrying almost a million daily passengers — face double-digit service cuts and fare increases.

Fortunately, the governor still has several powerful levers he can pull to provide much — though not necessarily all — of the funding. Failure to deliver would be disastrous for transit agencies across the state and the local economies they support.

More than 700,000 daily SEPTA passengers alone rely on public transit; many of those riders do not own a car. Millions more who don’t use public transportation benefit from state transit spending through reduced road congestion, higher property values for those near transit services, and the millions in agency procurement spending that supports thousands of jobs in communities throughout the state.

However, state transit systems, with SEPTA chief among them, have yet to fully recover from the pandemic-era dip in ridership. As federal COVID-19 relief funding ends, the budget shortfall is steep.

» READ MORE: Properly funding SEPTA is essential to Philadelphia’s economic future | Editorial

Shapiro proposed and House Democrats passed $283 million in funding for the Public Transportation Trust Fund to help fill the gap. However, Senate Republicans and the governor could not come to an agreement to appropriate more funding for transit, which may have also included increased investments in highways, roads, and bridges. Senate Republicans had linked transit funding to an unrelated push to regulate and tax new “skill games,” which is reportedly where the negotiations fell apart.

While not ideal, Shapiro can now act on his own to help public transit.

Pennsylvania received about $4 billion in formula funding from the federal bipartisan infrastructure law through several different programs. While this funding is often lumped together as “highway funding,” the Federal Highway Administration guidelines permit state governments to flex — or reallocate — this funding toward transit and multimodal capital projects overseen by the Federal Transit Administration. Though flexed funds can’t generally be used directly for operations, they can free up transit agency capital funds for use in operating budgets.

The governor can flex funds from an arcane alphabet soup of nearly a dozen formula funding pots. The flex option is also available to metropolitan planning organizations (MPOs) like the Delaware Valley Regional Planning Commission (DVRPC), which oversees some project selection and prioritization, as well.

Shapiro has multiple appointees on DVRPC’s board who can influence decisions there. MPO boards would need to vote to support certain changes, and political support from state representatives and constituents could help make it happen. A waiver request from the Shapiro administration or DVRPC could be approved within as little as three months, according to the Federal Highway Administration website.

Pennsylvania has already flexed about 2% of this formula funding to transit projects since 2013, but other states have been much more aggressive. Leading the way, New Jersey has flexed 15% of its highway formula funding to transit.

Nobody wants to be caught in a transportation Hunger Games scenario, yet there are significantly more projects on the Statewide Transportation Improvement Program list than there is money to fund them. How does PennDot prioritize the most worthwhile projects in this constrained environment?

PennDot decision-making has been something of a black box, lacking an explicit and transparent strategic framework to guide prioritization like Virginia’s SMART SCALE program. While the agency presents its choices with the veneer of engineering science, inertia and politics are the more powerful forces determining what gets funded.

The pressing political question for Shapiro is this: Why should transit infrastructure bear the full brunt of funding and service cuts while highway funding is held harmless?

» READ MORE: SEPTA’s return to treating fare evasion as a criminal offense is good for riders — and its bottom line | Editorial

It would be one thing if every state road project was beyond reproach, but the rationale for many of these is controversial. For example, there has been significant opposition to widening I-95 through Center City and South Philadelphia, as it would worsen the original mistake of cutting these neighborhoods off from the Delaware waterfront. In Harrisburg, the I-83 Capital Beltway Project has been opposed by the city on livability grounds.

Canceling or delaying even a dozen of these gigantic and controversial projects could close the transit funding gap next year.

In the medium term, the governor should establish a strategic framework that rigorously assesses social costs and benefits to guide how the administration prioritizes transportation projects in general, countering the inertia and political horse trading that currently directs our limited transportation dollars.

Among all projects on the commonwealth’s agenda, key transit investments offer some of the highest ridership and economic development returns per user.

Shapiro can and should push these projects to the front of the line for funding.

Jon Geeting is the director of engagement at Philadelphia 3.0. Alex Armlovich is a senior housing policy analyst at the Niskanen Center.