This Wednesday, October 16th, at 10:00 am and 4 pm, SEPTA will hold a public hearing on its proposed 25% fare hike. The Hearing will occur in SEPTA’s Board Room at its headquarters, 1234 Market St, Philadelphia, PA. If enacted, the 25% fare hike will raise $14.4 million in annual revenues or .8% of SEPTA’s operating budget of $1.74 Billion and 2.5% of the amount of SEPTA’s $650 million Fare Stabilization Fund. Because this is a public hearing, as opposed to a public meeting, State Law requires SEPTA to answer “Reasonable and legitimate questions.” If you have questions, by law, you are entitled to get answers at the Public Hearing. If you cannot attend, as there are no evening sessions, you can participate “online” by registering with SEPTA.
SEPTA has proposed raising fares mid-year rather than in its annual operating budget because: “While the state budget includes a small additional distribution to SEPTA, it is less than one-fourth of what the Authority originally requested, and the need for a permanent solution grows more urgent by the day.”
Based on Governor Shapiro’s proposed budget, SEPTA had been projecting a 161 million dollar increase in State Funding. As in previous years, the governor was either unable or unwilling to demand the state budget, which included money for public transit systems across the state.
Instead, the Philadelphia Delegation to Harrisburg was able to get $51 million for SEPTA, and the City of Philadelphia increased its funding by $7 million, for a total of $58 million.
The shortfall, the difference between what SEPTA expected and what it has received in additional funding, is 161 million less than 58 million or 103 million.
SEPTA has taken steps to cut costs and projects, saving $20 million. It has also started collecting parking fees again in SEPTA-owned parking lots, which had been suspended during the pandemic. $4 million is projected to be collected.
Needed: $161 million From the State
Received: $51 million From the State
Received: $7 million From the City
Projected parking fees: $4 million Drivers
Cost savings: $20 million Not hiring workers
STILL NEEDED: $79 Million Shortfall
SEPTA has not announced the amount currently in its “Fare Stabilization Fund,” created to “ensure long-term fiscal stability for SEPTA’s operating budget; maintain service levels through ups and downs of funding levels; mitigate the risk of future budget crises. ”
As of June 30th, 2023, the fund had $539.2 million, projected to grow to over $650 million by August 1st, 2024.
SEPTA has not announced how a 25% fare hike will affect ridership. Historically, large fare hikes have led to lower ridership. Because the pandemic has changed so much of how people live, it is hard to project the effect the fare hike will have. However, SEPTA has made some projections, and it is unclear why it has not shared with the riders what is to be expected.
We know that the fare hike falls most heavily on the City Transit Division, whose riders, based on SEPTA’s studies, are more likely to live in Philadelphia and experience poverty than the regional rail riders.
The average City Transit SEPTA “key card” rider will see fares go from $2.00 to $2.50, a 25% increase. A weekday zone 1 “key card” rider will see a 6.6% increase, and a zone 3 rider will see a 13% increase.
In addition, SEPTA continues to eliminate bus trips while increasing regional rail trips. City Riders will continue to see service cuts and much higher fare hikes, while regional rail riders will have more trains and lower increases.
What is also clear is that SEPTA, based on its own projections, doesn’t need the fare hike. If SEPTA were to use 2.5% of the Stabilization Fund, it would balance its budget without a fare hike and still have enough for future years.
Based on what SEPTA has presented, even if the state doesn’t provide additional money until 2027, there is enough money in the Stabilization fund to continue service without fare hikes or service cuts.
Stabilization Fund: $650 million FY 2025
Budget Short Fall 2025: $83 million Remaining $ 567
Budget Short Fall 2026: $100 million Remaining $ 467
Left in Fund 2027: $ 467 million
Suppose SEPTA raises fares and shows it is willing to force riders to accept double-digit fare hikes. How likely are the Governor and State Legislative Leaders to find the money to ensure SEPTA continues service at these fares and levels?
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