Photo by Derek Yu via Flickr
A response to Guy Ciarrocchi — SEPTA is, in fact, broke
In a recent column, Guy Ciarrocchi argues that SEPTA is “broken, not broke”. I disagree and believe that Mr. Ciarrocchi’s piece is missing crucial information and details around SEPTA’s operations and the funding crisis, so I am writing to set the record straight: SEPTA is broke, not broken.
In his piece, Mr. Ciarrocchi writes that the current budget crisis for SEPTA is due to poor planning and poor administration on SEPTA’s part, that SEPTA is currently sitting on $400 million dollars, and that SEPTA and the Democrats have manufactured this crisis because of the insubstantial idea that they just want more money.
Let us break this down one by one.
SEPTA’s budget crisis is caused by one thing and one thing alone: a lack of funding. However, let us entertain the idea, for the sake of argument, that SEPTA is inefficient. This idea is wrong. SEPTA is one of the most efficient transit organizations in the United States. SEPTA has the highest “ridership per dollar” ratio in the US. It beats out New York’s MTA, Chicago’s RTA, and Washington D.C’s WMATA.
SEPTA is able to transport the most people per dollar of any transit organization in the US. Another example of SEPTA’s efficiency and wise use of money is seen in its reuse and refurbishment of old catenary poles for the Wawa extension and old trolley cars for the G Line.
So, with all this efficiency, why does SEPTA have a budget crisis? It’s simple. SEPTA struggles with the same inflationary rise in prices all Americans have been struggling with, and most importantly, public transit has less sources of funding within the Commonwealth of Pennsylvania today than it did five years ago. Over the course of this crisis, SEPTA naysayers have conveniently forgotten that public transit funding through Act 89 was slashed from $450 million dollars to $50 million dollars. This cut in funding aligns perfectly with the start of the budget crisis and is the culprit of the budget crisis. The idea that this crisis was caused by inefficiency is simply false.
Mr. Ciarrocchi says that SEPTA is sitting on $400 million dollars, which they refuse to use to fund operations. In truth, SEPTA already does use this money to fund operations. The $400 million dollars that he refers to is the stabilization fund. The purpose of this fund is to cover any operational emergencies, avoid taking on high interest debt, pay contracts, and manage day-to-day cash flow. As a rule of thumb, SEPTA keeps three months of operating expenses in the fund and is the reason why the August cuts are reversible compared to the possible apocalyptic cuts in January. This fund allows SEPTA to efficiently maintain day-to-day operations and maintain financial stability. Asking SEPTA to use the fund to keep its current service levels is asking SEPTA to risk its future solvency and create an even larger crisis down the road.
Lastly, Mr. Ciarrocchi suggests that SEPTA and the Democrats manufactured this crisis just because they just want more money. To Mr. Ciarrocchi, SEPTA has no plan for the money; they just want it for no reason. This is, once again, false. Both SEPTA and the Democrats want the money —with a dedicated source of funding — to avoid service cuts and to take important public transit funding out of the realm of political games. That’s it. Furthermore, any assertion that even with a dedicated method of funding, SEPTA will be back asking for even more money next year is wrong. What SEPTA wants is the same dedicated funding it used to have through Act 89. It truly is that simple.
SEPTA allows for the quick and efficient transportation of passengers in Southeastern Pennsylvania. Thanks to SEPTA, roads are less clogged, there is less pollution in the air, and people are able to easily traverse the city. SEPTA is also great for the economy; with every dollar SEPTA receives, three to five dollars are generated in economic activity. Given these points, funding SEPTA and public transit as a whole is a no-brainer. SEPTA and public transit help us create a more beautiful and economic commonwealth. In short, it helps us create a commonwealth for the common wealth.
Zachary Reaves Brownlee is a local Philadelphia urbanist and activist with a particular interest in the economic impact of both transit, real estate, and tax policy.
Crime is the biggest reason that Mr. Brownlee’s article is not persuasive. He carefully avoids the subject. Instead, Mr. Brownlee demands that we in the suburbs act as enablers of Philadelphia’s crime and SEPTA’s crime.
A statistic you’ll never read is the massive number of Philadelphia businesses that have closed because of crime. West Philadelphians stream into Delco’s grocery stores and appliance stores by necessity.
Image a world without SEPTA: West Philadelphians would demand of their Democrat leaders that grocery stores should open in their neighborhoods. Democrat politicians would be forced to crack down on crime – and the rebirth of Philadelphia would begin.
Lots of talk back and forth – can anyone tell us the cost per vehicle mile for each mode of transport in SEPTA (rail, subway/elevated, bus) and then the revenue per vehicle mile for each. That would be the basic operational expense. Then we could look at capital expense, maintenance expense and – wait for it – overhead. That could tell us whether or not the system is broke or broken. I really don’t care if SEPTA is more efficient than the others, I am concerned about how efficiently SEPTA uses its rider revenue. Once we have that they we can speak to the need for governmental subsidy and the amount.
Cost per vehicle mile is not a good way to measure efficiency. This is because the CPVM can be higher for some transit agencies than others. The usual culprit of this is aging infrastructure. With all else being equal, a new transit agency is more likely to have a lower CPVM than an old one due purely to the fact that the new CPVM has newer, more efficient infrastructure and rolling stock.
I differ respectfully Mr. Brownlee.
You assert ” SEPTA is one of the most efficient transit organizations in the United States” Your source, r/Washingtondc, posts his “data” on reddit. Reddit is the digital analogue of Hyde Park’s speaker corner where every loon with a vocal cords can prattle their unique observations. Not exactly credible peer review standards one want for public policy.
In re PA Act 89, why should the Commonwealth defray the cost of a focal service provided? Why should the citizens of Coudersport, Wellsboro and Frackville pay for free SEPTA for the full and part-time employees of Philadelphia?. The free market concept of Adam Smith works well at efficiently allocating resources in society. Why not have the consumer of the good or service pay the cost of the good or service?
I found your statement “with every dollar SEPTA receives, three to five dollars are generated in economic activity.” Interesting. Is it just SEPTA spending that generates downstream economic activity?
Linking to that Reddit post was the choice of the Managing Editor, however the chart within the post comes from a prominent and credible transit activist.
Also, Act 89 did not just pay for SEPTA. Act 89 helped pay for all local transit agencies in Pennsylvania, which there are many. Citizens of more rural counties should care because this spending a prosperous Pittsburgh and SEPA region is beneficial to them. A prosperous Pittsburgh and SEPA region means more tax revenue and more revenue that can’t be spent on roads and school funding for them and their kids.
The philosophy of Adam Smith, who lived 300 years ago, should have little bearing on decisions of the modern age. I agree free markets are good for something, but we live in a much more complex society compared to 18th century England. That is most economists in the modern day subscribe to a more Keynesian economic philosophy.
As for SEPTA generating 3-5 dollars of economy activity, yes some of that activity is caused directly by SEPTA spending, but I would argue do to the multiplier being so high that most of it comes from local business sales and people being able to efficiently and quickly get to their jobs.
Making SEPTA more efficient and giving it a more stable funding stream, faces numerous roadblocks. (1) Why are the politicians who serve on SEPTA’s board dead set against both performance and financial auditing? Is it that sunshine into operations will reveal nasty surprises? Why have there been no revision to operations to meet financial realities? (This is not the knee jerk cutting of routes and times, that is the ploy to be used as a shake-down for more state taxpayer money). Time to admit that taxpayer revenue is used to keep the ridership fares from reflecting the true cost of operation, it also helps hide covering the cost of routes that are no longer viable.
SEPTA is not against being audited. The CFO has said so and the agency is audited multiple times by certain government agencies. The idea that SEPTA doesn’t want an audit is pure propaganda. Furthermore, SEPTA does want to reevaluate the bus routes. This reevaluation named the “Bus Revolution” was cancelled because of this funding crisis. Furthermore, no piece of transportation infrastructure within Pennsylvania reflects true cost to build and maintain. If taxpayer subsidies for roads and highways were stopped and the users were forced to bear the entire brunt of their maintenance costs, they would revolt. The truth is that the government has a vested interest in the efficient transportation of people because it’s good for the economy. In the rural areas it’s public roads for cars and in the urban areas it’s public transit.
Zachary Brownlee,
SEPTA is part of the Democrat far-Left clown show. SEPTA usually provides a service to transport Eagles’ fans to watch the Eagles’ event. Those fans already spent hundreds of dollars on for tickets to said event, and will spend almost $20 for one (1) single beer at said event.
So… did SEPTA increase their price for a ride back and forth from that show to what a single beer would cost? Nope. Doesn’t even occur to them to price according to demand. Instead they decided to “take their ball and go home” and planned to reduce service roughly 75%. What?!? Hahahaha, of course they are going out of business. Hahahaha. Who but a communist would make a decision like that? But the leaders were afraid of those innocent fools that make up the mob, so they blinked. And then they proclaimed they partnered with FanDuel and magically were able to restore the Express service. No one believes a word these crooked politicians say nor what SEPTA says about the matter. How much do they pay you?
Urban transit in the US has not turned a profit since WWII and the exodus of people from the cities to the suburbs, but that doesn’t mean mass transit doesn’t have value. SEPTA exists because the different private transit companies in the Philadelphia region went bankrupt, but the government understood that Philadelphia can’t function without them.
That mindset is why public transit in the US is PUBLIC and supported by the government. It doesn’t need to turn a profit because it’s providing a service that people pay their share to use. Creating surge pricing on SEPTA during rush hour or sporting events would be like PECO raising the cost of electricity the more people use it, or the Philadelphia Water Department raising rates during the summer when people are trying to cool off. When a public good is raising prices arbitrarily to make more money, it’s not a public good anymore.
SEPTA charging more to go to an Eagles game would make them no different than Uber and alienate riders. Think about the workers at the stadiums who would have to pay out the nose just to get home after work. You clearly don’t understand how any of this works, do some research, read a book and listen to people who have a clue how transit works