Gov. Shapiro announces $153 million for SEPTA to avoid service cuts and another fare hike

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

Shapiro announced the funding on Friday morning, alongside Philadelphia Mayor Cherelle Parker, at the Frankford Transportation Center.

Shapiro, a Democrat, said the $153 million can help SEPTA avoid service cuts and steeper fare increases until he can come to an agreement on a wider transportation funding deal with state lawmakers. It's expected to keep SEPTA funded through July.

The cash from the state means SEPTA can avoid a proposed increase of 21.5% and major service cuts in 2025.

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

Shapiro also said Philadelphia and its four suburban counties had agreed to boost their contribution to SEPTA.

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

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

Shapiro: SEPTA funding won't impact highway projects

Shapiro said shifting the federal highway funding won't jeopardize or stop any ongoing highway projects.

Shapiro said the federal highway dollars had been slated 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 and I-83 in York County - that have not been bid out yet and that he pledged to still get done on time.

Diverting highway funds is allowable 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 spars with state Republicans over SEPTA funding

SEPTA lost out on about $161 million when the Republican-controlled state Senate didn't go along with Shapiro's proposal for $283 million in new state aid to public transit.

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

Republican lawmakers have said that Shapiro must come up new money to pay for more transit aid and that extra transit aid must come packaged with more money for highway projects that will 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 that SEPTA has structural problems that it must fix and criticized his move to divert highway money from Republican-represented areas of Pennsylvania.

"The action by the governor today will do nothing but harm millions of hard-working 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 would be expected to bring in an additional $23 million for this fiscal year and $45 million per year starting in 2026.

Shapiro's announcement comes as many transit agencies are in a severe financial crunch.

Federal COVID-19 relief for transit agencies is phasing out and SEPTA and other major transit agencies around the country are struggling to regain ridership after the pandemic.

The Associated Press contributed to this report.