(The following article by Larry King was posted on the Philadelphia Inquirer website on December 15.)
PHILADELPHIA — SEPTA plans no fare hikes or service cuts for the next several months, but riders should not breathe easy.
“The storm is coming,” General Manager Faye Moore warned yesterday.
It could arrive July 1, in the form of a $120 million to $140 million budget deficit for fiscal year 2008 – and unprecedented financial pain and inconvenience to those who rely on buses, trains and trolleys.
Absent an infusion of new state funding by then, fare increases could exceed the 40 percent hikes proposed during SEPTA’s last financial crisis in 2004, not to mention the 20 percent service cuts proposed in weekday routes.
“It’ll be much worse than it was before,” said SEPTA board chairman Pasquale “Pat” Deon.
Amid all the doomsday talk, SEPTA has crafted a six-month reprieve.
In what has become an annual ritual in local transit, SEPTA announced yesterday that it planned to balance its operating budget through June by diverting money earmarked for capital projects. The SEPTA board will formally vote next Thursday on the idea, which then is subject to approval by the Pennsylvania Department of Transportation.
SEPTA’s operating deficit for fiscal 2007 is projected at $36.8 million. Shifting that money from the capital budget means projects such as installing security cameras in subways, automating fare collection, and retooling ancient subway stations and Regional Rail power stations will be delayed for at least a year.
The current shortfall, however, is peanuts compared to the hole as deep as $140 million predicted for the fiscal 2008 operating budget.
Unless the state comes through with some much-needed cash, the hit for riders could be more draconian than the one proposed in December 2004, when SEPTA needed $62 million to close out its fiscal 2005 operating budget.
At the time, officials projected that the higher fares and service cuts would prompt one in five riders to abandon the public transit system, and that 800 SEPTA jobs would be lost.
That scenario was averted two months later, when Gov. Rendell transferred enough federal highway money to bail out SEPTA through the end of this month.
A state commission Rendell assembled reported last month that transit systems throughout Pennsylvania need an additional $760 million annually to balance their books and maintain their infrastructure. Whether legislators will fulfill such needs in time to avoid higher fares and service cuts is anyone’s guess.
At yesterday’s budget committee meeting, board member Thomas Babcock asked SEPTA budget director Richard Burnfield about the chances of the legislature’s acting by July.
Before Burnfield could answer, board chairman Deon quipped: “What are the chances of the Eagles winning the Super Bowl this year?”
Chuckling, Burnfield said, “I was going to bring my crystal ball. But it’s broken.”
The early signals out of Harrisburg have not been good.
Rendell recently announced that he was shopping the Pennsylvania Turnpike to private interests as an option for raising an overall annual infusion of $1.7 billion for the state’s roads, bridges and transit systems.
Some lawmakers said Rendell’s move seemed an acknowledgment that there was little political appetite for raising gas taxes or increasing real estate transfer fees and vehicle licensing fees. Those were among the measures the governor’s Transportation Funding and Reform Commission suggested in November.
SEPTA spokesman Richard Maloney said riders and local officials should not be lulled into complacency by SEPTA’s six-month pause on fare hikes.
“It ain’t hunky-dory, and it gets dramatically worse next year,” Maloney said. “The story today goes well beyond fare hikes and service cuts; it is about the survival of the system.”
SEPTA has long been hamstrung by the lack of a reliable, dedicated source of funding. Constant financial crisis – often resulting in raids on the capital budget – makes it difficult to plan for, let alone implement, improvements to the system.
“Your plans are shifted year after year,” Moore said.
Case in point: the slashed projects in this year’s capital budget.
The Girard, Spring Garden and City Hall subway stations – which have had no major upgrades since 1928 – will wait another year.
So will plans to install security cameras and fiber-optic lines. That delay, in turn, will stall a new fare-collection system that would have incorporated the fiber-optic technology.
Modernization of two aging Regional Rail power substations will be delayed. One, at 30th Street Station, “has had a spotty history of reliability, to say the least,” Moore said.
That substation failed at the height of the November 2005 SEPTA strike, stranding hordes of rush-hour riders on the crowded Regional Rail lines – the only major SEPTA division still operating during the strike.
Purchases of new buses will also be put off, thwarting SEPTA’s goal of junking buses after 12 years of use.
“You wind up having to keep them longer than you should,” Burnfield said.