(The following article by Larry King was posted on the Philadelphia Inquirer website on November 20.)
PHILADELPHIA — Last summer, SEPTA said it didn’t want to cry wolf, yet again, to its crisis-weary riders.
So when the transit agency’s board approved an operating budget with a $50.3 million deficit, no plans were announced for filling the hole through higher fares or scaled-back service.
That was a switch from previous years, when SEPTA threatened such measures, only to get final-hour state bailouts.
Now the wolf is at the door.
The projected deficit has shrunk since July to $37 million, but SEPTA still must wrestle it down before the fiscal year ends June 30.
Officials remain reluctant, however, to concede that fare hikes are inevitable, or to guess how high they might go.
“We want to look at different options before we look at putting it on the backs of riders,” said Joseph Casey, SEPTA’s chief financial officer.
Until last Monday, agency officials had held out hope that a state transportation commission might recommend a short-term fix to the lame-duck legislative session after the elections. Gov. Rendell established the Transportation Funding and Reform Commission in early 2005 in part to suggest ways of avoiding annual transit funding crunches.
But when the commission issued its report, it included no short-term provisions, putting SEPTA’s immediate budget crisis front and center.
Before considering fare increases or any other in-house remedies, SEPTA officials say they first need to sound out allies in Harrisburg and see whether any stopgap loot can be had there.
“The only thing I could see is [Gov. Rendell] fronting them some money out of the general-fund surplus,” said State Rep. Rick Geist (R., Blair), chairman of the House Transportation Committee. Shifting federal highway money into transit bailouts, as Rendell has done before, is unlikely, Geist said.
Another option, Casey said, is shifting money from SEPTA’s capital budget – a maddening but familiar ploy that slows plans to expand or improve the transit system’s infrastrucure.
“That would be preferable to a fare increase,” said Jettie Newkirk, who as one of two Philadelphia representatives on the SEPTA board has fought previous fare increases. “But it would still be robbing Peter to pay Paul.”
Any proposal for making up the deficit, Casey said, would not be handed to SEPTA’s board until next month, at the earliest.
If higher fares are part of that plan, a two- to three-month series of public notices and hearings would follow, pushing the issue into the spring.
That would leave little time to make up the deficit.
“Thirty-seven million is a big number,” Casey said. “I’m not saying there will be a fare increase, but if there is, the later in the year we do it, the higher it would have to be.”
SEPTA has managed to whittle down some of the deficit from the original $50 million through changes made in prescription plans during last year’s labor negotiations, and by holding off on hiring, budget director Richard Burnfield said. Strong ridership and higher-than-expected advertising revenues have also helped.
Whether the deficit might grow or shrink further depends in part on the winter weather. Snowstorms can be budget-killers.
“We have $2 million budgeted for snow removal,” Burnfield said. “The last few years we haven’t had much snow, but if you have a 20-inch snowstorm, you could spend $2 million in one weekend.”
Fare hikes also harm ridership, sometimes before the fact.
“When you start to talk about fare increases or service cuts, that starts to make the riders a little uneasy,” he said.
Despite falling gas prices, October ridership figures were the strongest in almost 20 years, said John McGee, SEPTA’s revenue, marketing and sales chief. Most of the recent gains have been on Regional Rail trains.
News of impending fare hikes would probably affect the newest riders first, McGee said.
“Given that we have had recent dances with fare increases that didn’t occur,” McGee said, “the public will not react until they are pretty convinced it is going to happen.”