(The Center Square) — SEPTA leaders waved a distress flag during the agency’s first public hearing in four years, warning of a steep fiscal cliff and the difficult decisions that lie ahead.
The Philadelphia-region transit system — one of the largest in the country — proposes a $1.69 billion budget for fiscal year 2024, a figure that represents a 4.7 percent increase to account for inflation, higher costs, and the impending end of federal pandemic-era subsidies.
“The budget proposal expands ongoing efforts to restore service and ridership to as close to pre-Covid levels as possible,” Erik Johanson, senior director of budgets and transformation, said in his public hearing testimony at SEPTA headquarters on Tuesday.
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The system’s ridership collapsed during the Covid-19 pandemic, though officials set a goal to recapture 80 percent of the usage it lost by next year. Missing that target will only deepen its budget crisis.
Johanson said the conditions halved the agency’s self-generated revenues it counted on to fund roughly 35–45 percent of its operations.
“For the last three fiscal years since the beginning of the pandemic, operating revenue has covered just twenty percent of operating expenses,” he said. “This increased reliance on subsidies is a fundamental fiscal challenge moving forward.”
SEPTA CEO and General Manager Leslie Richards said the agency is “doing absolutely everything” it can to offset costs. In total, SEPTA’s Efficiency & Accountability program identified more than 140 initiatives that could generate $102 million in recurring annual value by the end of 2024.
The budget proposal notes an increase in ridership revenue, from $265.6 million in 2023 to $280.7 million in 2024, and a significant $16 million increase in investment income — but it’s not enough to offset a significant future shortfall.
The current system is not just fundamentally flawed, it is disingenuous and unjust. The riders don’t have a say.
“Starting with fiscal year 2025, SEPTA is projecting a sustained structural deficit of approximately $240 million per year, representing fifteen percent of SEPTA’s annual operating expenses,” Johanson said.
The deficit “will render substantial fare increases and service cuts unavoidable,” he noted, with fare increases in the realm of twenty percent to 30 percent. Other transit agencies in New York City, Boston, Chicago, and Washington, D.C. face similar problems as ridership numbers and higher costs plague public transit nationally.
SEPTA’s public comment period on its budget will extend through May 31 and can be submitted by email at email@example.com or by phone to (215) 580-7772. Some, however, criticized the process.
“Who is representing the riders at these hearings? The truth is these are not hearings,” said Lance Haver, a consumer advocate and co-founder of the Philadelphia Hall Monitor. “There is no one representing the riders. No resources for riders to hire our own experts or our own lawyers.”
Three people, including Haver, spoke at the Tuesday morning hearing with fewer than a dozen in attendance. SEPTA officials said Monday’s two sessions were sparsely attended, too.
“The current system is not just fundamentally flawed, it is disingenuous and unjust,” Haver said. “The riders don’t have a say.”
Anthony Hennen is a reporter for The Center Square. Previously, he worked for Philadelphia Weekly and the James G. Martin Center for Academic Renewal. He is managing editor of Expatalachians, a journalism project focused on the Appalachian region.
This article was republished with permission from The Center Square.