SEPTA’s 2024 Budget: The Good, The Bad, and The Ugly

SEPTA’s Board has passed its operating budget. There is some alarming news hidden between the press releases and positive changes.

But first, the good news for riders.

The budget keeps fares at the same level and adds another free transfer for Key Card users. If you use a Key Card, the first and second transfers are free. For those that buy a weekly or monthly trans pass, the new budget gives you access to all Zone 1 Regional Rail Line stops and to the airport.

SEPTA offers its transpasses to businesses and universities so more employees and students can use public transportation. The goal is to make it easier for people in Philadelphia to travel, to take cars off the road to improve the air quality, reduce traffic, and increase SEPTA’s revenues. In its attempt to keep riders safe, SEPTA is hiring more police officers and developing a “virtual” police force through cameras and “real-time” monitoring of the cameras. They have also contracted with eight outreach teams in an attempt to help struggling people find better solutions than living in Subway or El stations.

Last year, SEPTA began operation of its second offsite solar farm, doubling its solar power capacity. It now generates 20% of the electricity it uses from solar energy. SEPTA had so much cash on hand that it was able to pay down its $300 million line of credit loan and save interest, and enough surplus cash to place $383 million in a “fare stabilization fund” that is expected to grow to over $480 million by August 1st of this year.

The troubling news in the budget is harder to find, but it’s there. SEPTA ridership has dropped since the COVID shutdown as more commuters began to work at home. The adopted budget doesn’t project reaching Pre-COVID levels. Despite rising costs, the budget calls for a 4.7% increase in spending; SEPTA projects that it will be unable to match the number of people riding the system pre-pandemic. SEPTA’s General Manager said, “SEPTA anticipates that farebox revenue will continue to fall more than 30 percent below Pre-COVID levels for the foreseeable future. “

According to General Manager Leslie Richards, it’s not just the loss of riders; “Major crime on SEPTA has nearly doubled, and the increase in antisocial behavior, people evading fares, smoking in subway cars, abandoning trash — plus the persistent presence in train cars of people experiencing mental illness, homelessness, and addiction burden the system and make it harder to grow ridership.”

That is why an in-depth examination of the budget would have been helpful. SEPTA is balancing its budget with Federal COVID dollars that will disappear after this year. In Fiscal Year 2024, the Federal Subsidy is expected to cover 20.6 percent of SEPTA’s operating expenses, a significant increase over pre-pandemic fiscal years.

SEPTA reported at its hearing the “budget shortfall will be insurmountable without the federal subsidies and/or without additional funding.” Without new sources, SEPTA claims it will be forced to raise fares by 30% and cut services by 20%. The service cuts and fare hikes will fall most heavily on the working poor. 50% of SEPTA riders have HOUSEHOLD INCOMES BELOW $34,000 A YEAR.

Faced with all these problems and challenges, a meaningful hearing on SEPTA’s proposed budget would have been helpful. Instead, SEPTA’s Hearing Examiner refused to force SEPTA to answer questions about its fare stabilization fund, refused to provide riders with representation at the hearings, and wrote only three pages to support spending $1.69 Billion, or $564 million per page.

There should be no doubt that SEPTA faces real challenges now and in the future. But is the best way to overcome those challenges to put $485 million in a bank account? Or would it be better to spend the money to make SEPTA safer, cleaner and increase ridership? Is it best for SEPTA to spend millions on a “Bus Revolution” that will not work if service is cut? Or should any of that money be spent to warn riders of the pending 30% fare hikes and 20% service cuts coming next year? Would it be more just for some of that money to be used so that un and under-banked riders don’t have to pay three times as much for a SEPTA ride as a rider with a Key Card instead of planning a bus revolution that cannot work if service is cut? Or should all that money be saved so that when the federal money disappears, there will be a “slush fund” to draw from if SEPTA and its supporters fail to get additional funding? Is it really best to plan for SEPTA to plan to fail?

A real hearing would have allowed the public to understand the choices.

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