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SEPTA wants more state sales-tax revenue to avoid ‘draconian’ service cuts next spring

A change in the law would give SEPTA an additional $190 million from the state sales tax each year to run its buses, trolleys and subways.

Travelers wait for the train at the South City Hall station on Tuesday, September 7, 2021. Broad Street line SEPTA bus service is in its own redesign process, with any proposals to change nomenclature or graphics to come later Using fewer full English sentences and words is key to helping users make the right decisions faster, Powers said.Tuesday, September 7, 2021.
Travelers wait for the train at the South City Hall station on Tuesday, September 7, 2021. Broad Street line SEPTA bus service is in its own redesign process, with any proposals to change nomenclature or graphics to come later Using fewer full English sentences and words is key to helping users make the right decisions faster, Powers said.Tuesday, September 7, 2021.Read moreJOSE F. MORENO / Staff Photographer

In an effort to secure desperately needed funding, SEPTA officials are lobbying for a proposal in Harrisburg that would increase by about 45% the annual share of state sales-tax revenue devoted to paying for public transportation.

If their efforts are successful, the state’s Public Transportation Trust Fund would receive 6.4% of the money generated by the sales tax, up from 4.4%, generating an additional $295 million annually for public transit operations across the state. The sales tax itself would not increase.

SEPTA estimates that it would get an additional $190 million annually, with a $65.6 million increase for Pittsburgh Regional Transit and $38.8 million more for other systems, based on the state’s funding formula, which allocates dollars to transit agencies.

“We’ll really be able to prevent a draconian service reduction and extraordinary fare increases,” SEPTA CEO Leslie S. Richards said Wednesday when asked about the proposal. “That is what we will be left with when we get to next spring, if we don’t see a way out of this looming fiscal cliff.”

The additional funds generated by the sales tax proposal would not plug SEPTA’s entire operations budget gap, estimated to be $240 million a year, but it would go a long way, she said.

State governments recently stepped in with more money to help the New York and Boston transit systems avoid the looming fiscal cliffs in their jurisdictions. Transit agencies around the country have been facing budgetary challenges as they spend the last of the $69 billion handed out in three rounds of pandemic aid. Nationwide, ridership has not bounced back to its pre-pandemic levels.

The sales tax proposal, which SEPTA officials have been building support for in the legislature over the last several years, could be enacted quickly if it is included as part of the fiscal code, legislation that accompanies the state budget and directs how its spending is financed.

“We’re in a window right now over the next 30 to 45 days … to fix this,” Pasquale “Pat” Deon, the longtime SEPTA board chairman, said in a meeting with The Inquirer Editorial Board on Tuesday. “Now is the right time to do it.”

Legislative leaders in Harrisburg are currently negotiating the state’s fiscal code, which did not get passed with the rest of the $45.5 billion budget, as usual, earlier in the summer. It’s unclear where things stand. The House is due back in session on Sept. 26, after a special election in a Pittsburgh-area district. The Senate is controlled by Republicans. Democrats hold the leadership positions in the House and Gov. Josh Shapiro, of Montgomery County, is a Democrat.

The politics of the situation are not easy, but Deon said Senate leadership has told him they’re open to the idea and he’s optimistic — as long as someone in House leadership pushes for it. Southeast Pennsylvania has a large delegation there, which Deon says has a “vested interest,” knowing well the value of SEPTA to the region.

“When it comes down to the brass tacks, they’re all afraid to be the first one on the floor saying ‘We want this,’” Deon told the Editorial Board. The typical legislative deal making could require a lawmaker to trade away another cherished priority, he explained.

Without the change, the sales tax is expected to generate about $648 million for transit in the 2024 fiscal year, which begins next July and runs through June 2025. With the increased allocation, transit would get $943 million. The sales tax is the largest source of revenue for the state transit trust fund, administered by PennDot.

“We are looking for someone to champion our cause,” Pamela McCormick, SEPTA’s director of legislative affairs, said in an interview Wednesday. “We have a lot of friends [in the legislature] and people who understand our challenges — so we just hope that the leadership will find a way forward.”

Connor Descheemaker, coalition director for Transit Forward Philadelphia, a pro-transit group, said advocates haven’t seen a clear picture of what is happening on negotiations over the sales-tax proposal in the developing fiscal-code legislation.

“Some people say it’s not going to happen, some say it’s in there and some say it’s 50/50,” Descheemaker said. “We’re focusing our advocacy on ‘Please God, fix it.’ We need both operating revenue and capital money. Both are time-sensitive.”