SEPTA and some Philly Dems want the state to let counties raise taxes for public transit

HARRISBURG — With increased attention to public transportation since the Interstate 95 bridge collapse, SEPTA and other transit agencies want the General Assembly to allow counties to raise local funds so they can apply for federal grant money and build up their transit systems.

Billions of federal dollars are available to transit agencies from President Joe Biden’s $550 billion infrastructure package from 2021. But agencies must be able to provide local funds to receive the competitive grants. And without more investment from the state, SEPTA and transit agencies in Southwestern Pennsylvania want to be able to raise their own funds.

Rep. Joe Hohenstein (D., Philadelphia), who described himself as a “lifelong transit rider,” discussed his bill on Tuesday to allow counties to levy local taxes to generate funds for public transit, including potential taxes on liquor, rental vehicles, or property transfers. State law prohibits counties from raising taxes for public transportation.

“As we have seen this past week, when a transportation crisis occurs, we lean on our public transit system,” Hohenstein said during Tuesday’s news conference. “SEPTA has stepped up with increased services while I-95 is being repaired. Now we need to step up and give it funding flexibility.”

Hohenstein and Rep. Ben Waxman (D., Philadelphia) were joined by SEPTA leaders and transit users on the state Capitol steps Tuesday in support of the proposal.

Leslie Richards, SEPTA’s general manager and CEO, noted how the Southeast Pennsylvania transit system has increased capacity and services in the wake of the collapse of I-95 near Cottman Avenue. Ridership increased by 12% on some Regional Rail lines.

But if a disaster such as this happened next year, SEPTA wouldn’t be able to handle it unless it received more funding, she said.

SEPTA has relied on federal COVID-19 relief dollars over the last few years as ridership dropped during the pandemic. Those funds are set to dry up by the end of next fiscal year, and Richards has already warned that service cuts and fare increases are imminent if the agency doesn’t find more funding sources.

Federal infrastructure grants are available only for the next three years, meaning that the clock is ticking if transit agencies are going to win any of the billions in federal competitive grants.

“We want to compete,” Richards said. “We have good projects. We will win competitive grant money.”

Hohenstein’s bill is one way to improve the transportation system, but not everyone is sold on it — including fellow Democrats.

Lisa Schaefer, the executive director for the County Commissioner’s Association of Pennsylvania, agrees that a new funding solution is necessary, but says more state investment is needed instead of just tossing the costs to counties to raise funds.

Even if Hohenstein’s bill passed through the General Assembly soon, transit systems such as SEPTA would still be waiting. County governments would need to decide how they’d raise local taxes to generate funds, and then actually do so.

Rep. Ed Neilson (D., Philadelphia), who chairs the House Transportation committee, said his committee will likely have hearings this summer on a similar bill that’s not “ready for prime time yet.”

Neilson noted that cities such as Philadelphia already have massive annual budgets, and he wants to ask: “What are they doing to help local transit?”

Philadelphia and suburban counties such as Bucks and Montgomery already contribute a local match toward SEPTA’s federal funding, but they cannot raise their own revenue for transit. Earlier this year, SEPTA approved a $1.7 billion budget, which includes a $240 million structural deficit that agency leaders are unsure how they’ll fill.

Other transit authorities and small airports should have local funding options, too, Neilson said.

“They need local funding options as well to get some big projects,” he added.

Neilson acknowledged that SEPTA and other transit authorities need a local funding stream to access the federal infrastructure funds. But he was noncommittal on whether his colleagues’ approach is the right one.

But it’s still urgent that lawmakers find a solution soon for transit authorities as federal COVID funds run out, Neilson said.

“[SEPTA] will be out of money,” Neilson said. “We have to figure out how to fix that.”

Staff writer Gillian McGoldrick contributed to this article.

DaniRae Renno is an intern with the Pennsylvania Legislative Correspondents’ Association.