Shapiro’s SEPTA bailout is officially approved

The Delaware Valley Regional Planning Commission on Wednesday approved flexing $153 million in federal dollars designated for Pennsylvania highway infrastructure projects to bail out SEPTA, delivering the lifeline Gov. Josh Shapiro promised last month.

Along with that money, SEPTA will receive $23 million in new money from Philadelphia and its four suburban counties for the transit agency’s immediate operating needs. Shapiro had asked local governments for a match to pair with the larger sum.

With the move, SEPTA will be able to avoid — for a little more than six months — a potential “death spiral” of deep service cuts and massive fare increases caused by a recurrent budget deficit.

“This is a stopgap,” said Ariella Maron, executive director of the planning commission. State lawmakers will still need to “address the core funding issue.”

Stretched by the pandemic and a resulting drop in ridership, along with rising costs, SEPTA faces a $240 million deficit next fiscal year, which begins July 1. Shapiro said he intended the flex to buy time to work out a more sustainable way of bringing new state funding to transit agencies in negotiations with the legislature.

As the federally designated metropolitan planning organization that sets priorities for all transportation projects in the region, DVRPC amended the state’s Transportation Improvement Program to make the switch, which amounts to a kind of public-financing bank shot.

The state Department of Transportation, at the governor’s request, proposed moving $153 million budgeted for seven interstate projects around the state that have not begun construction or even been awarded contracts.

The Federal Highway Administration, which sent that money to the state, approved the maneuver, and the money will be transferred to a Federal Transportation Authority program that provides money for preventive maintenance to local transit agencies.

SEPTA can use that money to support salaries and other costs associated with operations, officials said.

The flex option, rarely used on a large scale in Pennsylvania, has sparked anger from Republican lawmakers in Harrisburg and raised deeper questions about gaps in the way that the state pays for both highway infrastructure projects and public transit needs.

Christine A. Reuther, a member of the Delaware County Council, said the county was glad to help with a stepped-up contribution for SEPTA, but called it a stretch. She noted the council passed a budget with a 23% property tax increase this week, reflecting increased needs, including the SEPTA share and stagnant property values.

“We cannot keep doing this,” said Reuther, also a DVRPC commissioner.

“The way Pennsylvania requires counties to fund their government puts us in a position where we have no choice but to do substantial [property] tax increases,” she said. Delaware County has pushed for action on pending state legislation that would allow counties to enact a special tax or fee to pay for transit or other needs, relieving the burden on property owners.

“To put this all on the property tax is just not sustainable,” Reuther said.

SEPTA’s $153 million will come from seven different interstate infrastructure projects across the state, said state Transportation Secretary Mike Carroll: on I-79 in Mercer County; I-80 in Columbia County; I-95 in Philadelphia; I-83 in York County; two I-80 projects in Jefferson County; and I-70 in Washington County.

State Senate Republicans have blocked Shapiro’s proposal to raise $1.5 billion over five years for transit operations by allocating more sales tax revenue to the Public Transportation Trust Fund. SEPTA, as the largest system, would receive about $161 million annually under that plan.

GOP leaders have called for a comprehensive package that would tie more money from roads and bridges and to use other sources of revenue besides the sales tax. Shapiro has said he’s open to that but nothing was enacted this year.

The state House, which has a Democratic majority, passed bills to provide that money three times, but they have stalled in the Senate in part because of internal disagreements among the Republicans who control the chamber about how to pay for it.