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Pennsylvania Transit Coalition |
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Contact Us (215) 880-6142
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Delware Valley Association of Rail Passengers Pennsylvania Alliance of Public Transit Advocates
An alliance of groups like the PTC that are working
together to fight for more funding for public transportation.
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The Transit Funding Crisis SEPTA’s Budget and Deficit For the fiscal year that began on July 1 (Fiscal Year 2005) SEPTA’s proposed budget is $920 million. Without service cuts, fare increases, or additional funding from the state, SEPTA faces a deficit of between $62 and $65 million. And this figure does not include the costs of a reasonable settlement with the Transit Workers Union during the contract negotiations that must take place this year. The other transit agencies in the state, large and small, are also facing severe deficits. The Fiscal Crisis is Real
In part because it has not been as open and
responsive to citizens as it should have been, and in part because it has
unfairly taken the brunt of criticism for service cut backs and fare increases,
SEPTA is not always trusted by people in the Greater A look at SEPTA’s budgets over the last seven years shows an average increase of only 2.4% per year, lower than the inflation rate. Like other state agencies and private businesses, SEPTA has had to face substantially increased costs for health care during that time. And while the agency did reduce some service over the last seven years—such as the recent cuts in R8 mid-day service—it established some new routes as well. Pennsylvania Shortchanges Public Transportation Every major public transit system in the country is heavily subsidized by city and state governments. But SEPTA receives a smaller subsidy than most of the other, large public transit systems. This can be seen by looking at two important measures of public support for mass transit. The first measure is the percentage of the operating expenses accounted for by fares. In highly subsidized public transportation systems, a relatively smaller portion of the operating costs will fall on those who buy tickets and tokens. As the following chart shows, in 2002, transit fares paid for 41.9% of the operating expenses of SEPTA. Only in four systems did fares account for a higher percentage of the operating expense. In fifteen of those systems, fares accounted for less than 30% of the operating expenses of the system.
A second important measure of support for public transit is the percentage of the operating expenditures paid for by state and local governments or by regional taxes collected by the transit organization itself. As the following table shows, SEPTA does worse by this measure than twenty of the twenty-five largest transportation systems in the country.
Note that the source of
these monies varies from state to state. In some states, local governments
provide much of the support for public transportation or the regional
transportation authority is empowered to receive taxes from people in its area
of operation. In other states, the state government pays the largest share.
These variations from state to state reflect broader differences in the fiscal
practices of the states that, in turn, are tied to political differences between
the states. For example, in some states like Pennsylvania, a higher percentage
of transportation costs are funded at the state level while a lower percentage
of education costs are funded by the state. In other states, such as Finally, a third important measure of public support for mass transit is the percentage of the operating budget that comes from dedicated funds. (Click here to learn more about why dedicate funds are so important to transit systems.) The following table shows us that nineteen of the twenty-five largest public transportation agencies receive a higher percentage of support from dedicated funds than does SEPTA. And, in two cases, that of PATH and the Washington Metro, transit agencies are assured of funding from funds that are independent of transportation.
Note on data sources: All of the information in the above tables are drawn from the 2002 National Transit Database. Links to this data can be found here. We will make 2003 or 2004 data available here as soon as they are posted on the National Transit Database website. We do not think that later data will be much different. If anything, we expect that SEPTA’s relative public support has declined in the last two years. The Failure of the 1991 and 1997 Plans for Dedicated Funding of Public Transit In 1991 the legislature enacted Act 26 which created Public Transportation Assistance Fund (PTAF). It was meant to provide dedicated funding for SEPTA. Funds for this purpose were initially to come from a car rental tax, a $1 tax on tires, a tax on periodicals and a portion of the Public Utility Realty Tax (PURTA). Soon thereafter a small (.0053%) portion of sales tax revenues were dedicated to the PTAF to replace the periodical tax which was difficult to collect. Receipts from PURTA declined from $60 million to $14.4 million as a result of deregulation of the electricity industry. A Utility Gross Receipts tax replaced about $18 million of the lost revenues from PURTA. In 1997, Act 3 dedicated an addition 1.22% of sales tax revenues to PTAF. This amount was mean to replace Federal public transportation operating subsidies. When PTAF was first created, legislators expected that dedicated funding for public transportation would increase by 3% a year. Had this occurred, SEPTA would be receiving an additional $66.2 million in this fiscal year, more than enough to eliminate the projected deficit (although not enough to expand and improve service). Instead, over the last 13 years, dedicated funding has gyrated up and down. In a few years it went up by over 8%. But in other years, it has declined by as much as 6%. General Funds for Public Transportation In addition to the dedicated funds provided, the Commonweath of Pennsylvania provides funds for public transportation out of general revenues. Here, too, public transportation has been shortchanged. Not only have general funds for public transportation not increased, they have kept pace with inflation. Between 1985 and 2005, general funds for transit increased by an average of only 2.7% a year while inflation averaged 2.9% a year. Thus support for transit decreased by .2% a year. In the last ten years, the situation is worse. General funds for transit have increased by an average of 1.0% a year while inflation has averaged 2.3% a year for a net decrease of 1.3% per year. The Need is Clear If the state government
does not take action to provide more funds for SEPTA by the end of this year,
devastating cuts in service or equally problematic increases in fares will be
necessary. Public transit users and the whole greater Maintenance of Service is not Enough Our task, however, is not just to prevent a catastrophic decline in the quality of public transportation in this region. It is to secure the funds necessary to expand and improve SEPTA. If we want to create vibrant, diverse, and prosperous communities in our region, we must build on our existing infrastructure and create an attractive, efficient, wide-ranging, and inexpensive transit system. |