Governor Shapiro Announces $153 Million for SEPTA to Avoid Philadelphia-Area Service Cuts and Another Fare Increase

PHILADELPHIA (WPVI) — Gov. Josh Shapiro said he will redirect more than $150 million in federal highway funding to provide a one-time injection of cash into SEPTA to help it avoid short-term service cuts and delay fare increases.

Shapiro announced the funding Friday morning with Philadelphia Mayor Cherelle Parker at the Frankford Transportation Center.

Shapiro, a Democrat, said the $153 million could help SEPTA avoid service cuts and steeper fare increases until he can agree on a broader transportation funding deal with state lawmakers. That’s expected to keep SEPTA funded through July.

The money from the state means SEPTA can avoid a proposed 21.5% hike and major service cuts in 2025.

However, the 7.5% fare increase approved by SEPTA’s board Thursday will still take effect on Dec. 1.

Shapiro also said Philadelphia and its four suburbs had agreed to increase their contributions to SEPTA.

SEPTA will still need the state legislature to pass a long-term funding solution this spring.

The nation’s sixth-largest mass transit system, SEPTA, faces an annual structural budget deficit of $240 million.

Shapiro: SEPTA funding won’t affect freeway projects

Shapiro said moving the federal highway funding will not bring or stop any ongoing highway projects.

Shapiro said the federal highway dollars had been earmarked for seven projects — on Interstate 95 in Philadelphia and I-80 in Columbia County, I-79 in Mercer County, I-80 in Jefferson County, I-70 in Washington County and I- 83 in York County – which hasn’t been put out to bid yet, and which he promised would still be finished on time.

Diversion of highway funds is permitted under federal law. Former Gov. Ed Rendell did it in 2005 and 2010 to help transit agencies, while shifting the money is routine in some other states.

Shapiro is sparring with state Republicans over SEPTA funding

SEPTA lost about $161 million when the Republican-controlled state Senate did not agree to Shapiro’s proposal for $283 million in new state aid for public transportation.

Instead, lawmakers approved a one-time payment to the state’s trust fund for transit systems, of which SEPTA received $46 million.

Republican lawmakers have said Shapiro must come up with new money to pay for more transit aid and that extra transit aid must be packaged with more money for highway projects that would benefit the rest of Pennsylvania.

On Friday, Shapiro blamed the Senate’s Republican majority, saying he agreed to their demands but that “the Senate was never able to get it done.”

Republicans bristled at Shapiro’s characterization, suggested SEPTA has structural problems it needs to address, and criticized his move to divert highway money from Republican-held areas of Pennsylvania.

“The governor’s action today will do nothing but hurt millions of hardworking Pennsylvanians by depriving their areas of critical infrastructure,” Senate Majority Leader Joe Pittman, R-Indiana, said in a statement.

The Democratic-controlled House of Representatives passed Shapiro’s plan last March.

SEPTA last raised fares in 2017, and the proposed increase is expected to bring in an additional $23 million for this fiscal year and $45 million annually starting in 2026.

Shapiro’s announcement comes as many transit agencies are in dire financial straits.

Federal COVID-19 aid to transit agencies is being phased out, and SEPTA and other major transit agencies around the country are struggling to regain ridership following the pandemic.

The Associated Press contributed to this report.