Management & Operations

Pennsylvania report urges immediate action to address funding crisis

Posted on April 2, 2019

Transit agencies were notified that their state capital funding will drop dramatically next year, and operating funds will remain stagnant while system costs rise each year.
Transit agencies were notified that their state capital funding will drop dramatically next year, and operating funds will remain stagnant while system costs rise each year.

The Southeast Partnership for Mobility, a collaboration between Southeastern Pennsylvania Transit Authority (SEPTA) and the Pennsylvania Turnpike Commission (PTC) in coordination with the Pennsylvania Department of Transportation (PennDOT), issued a sweeping report that calls on state and local officials to act now to address the looming transportation funding crisis driven by changes coming to Act 44 of 2007. The report can be found here.

"There are two challenges addressed in this report: First, the current statewide funding system is just not sustainable; second, even at current funding levels, economic growth is limited," said SEPTA Chairman Pasquale T. Deon Sr. "A statewide solution to Act 44 is needed. Southeast Pennsylvania and local communities need enabling legislation to help raise regional revenues to invest in transit and Turnpike projects to accommodate and accelerate regional growth."

In recent weeks, risks to state transit funding have been recognized across the commonwealth, along with concerns about the impact of pending litigation and untenable debt at the PTC. Transit agencies were notified that their state capital funding will drop dramatically next year, and operating funds will remain stagnant while system costs rise each year. Reduced and unstable funding will lead to more project and procurement delays and ultimately impact service levels for SEPTA riders.

A cross-sector Advisory Council of regional business and civic leaders, major employers, elected officials, and transportation agencies guided the development of the report. Members of the council emphasized the importance of a robust public transportation network that can meet current and future needs.

The report also details how the region is a critical driver of the statewide economy and the role that SEPTA plays, noting that southeast Pennsylvania generates 41% of the state's total economic activity and is home to 32% of its population on just 5% of its land. The Philadelphia region has grown by more than 100,000 new residents since 2010. This level of density and economic productivity is only possible with a high-capacity, efficient network to keep the region moving.

Act 44 required the PTC to provide PennDOT with $450 million annually for highways, bridges, and public transit, and Act 89 of 2013 modified the payments to dedicate the full amount to transit. In 2022, PTC payments to PennDOT for transit will be cut to $50 million and then $450 million will be provided from the state's General Fund. The report makes it clear that the state's current system for financing transit statewide, which is dependent on Turnpike tolls, is at risk. The PTC needs to provide relief to its customers from excessive toll hikes and make critical investments in new interchanges to power economic growth across the state.

As a result of Act 44, the PTC has been forced to raise toll rates for 11 straight years and driven the agency's debt levels to more than $11 billion. In addition, the agency has reduced its rebuilding program by 13% and cannot consider potential expansion projects, including new interchanges in Bucks, Chester, and Montgomery counties.

Last spring, trucking and motorists' groups challenged Act 44 in federal court. Due to the uncertainty that the litigation created, the PTC has not made a payment since last April. While PennDOT has used reserves and reprioritized projects in the current fiscal year, SEPTA has had to put 40 projects on hold.

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