With less than two weeks to go until the theoretical deadline for passage of the state budget, it’s still very uncertain that legislators will approve spending the hundreds of millions of additional dollars that SEPTA and other transit agencies say they need to avoid ruinously deep service cuts.
It is clear, however, that the thousands of pro-transit emails that riders have sent legislators, the town halls that senators and representatives have been holding, and the rallies staged in Harrisburg and elsewhere are having an effect.
“The continuous statewide advocacy for public transit has helped bring the issue to the forefront of many, many legislators’ minds,” said Sen. Nikil Saval, a member of the Senate transportation committee who represents Center City and part of South Philly.
The advocacy has gotten the attention of the Senate Republicans whose support is essential to passage of a spending package.
Senate Majority Leader Joe Pittman, who has suggested transit shouldn’t receive any additional funding, contends the agency and advocates are trying “to manufacture a crisis.” Sen. Cris Dush, from central Pa., sent out a mass email response last week complaining about an unfunded highway project in his district, and chastising SEPTA riders who “have the luxury of being able to sit on a bus or train catching up on work or social media while our folks must pay attention to the road ahead to avoid deer and other drivers.”
“We don’t have the money for what you are asking. I will not take from the infirm, the elderly to provide money for SEPTA … I hope and pray all of you in the SEPTA service area find solutions within your communities,” Dush wrote.
Beyond the rhetoric, it’s hard to know what’s actually happening in the closed-door negotiations between legislative leaders and Gov. Josh Shapiro where details of the budget are being worked out. Political experts, and even lawmakers like Saval, say they don’t know for sure that there will ultimately be more money for transit or which proposed revenue-raising measures might win approval.
One of the few things they generally agree on is that the budget probably won’t get a final vote by the June 30 deadline — although it likely will be done before August 24, when the first of SEPTA’s planned deep service cuts are scheduled to hit.
They also say any deal will need to boost funding for the kind of rural, red-district road and highway projects Dush was referring to.
“I can tell you that it’s very important to me to talk to my colleagues and get an understanding of their infrastructure needs in their district,” said Sen. Joe Picozzi, a SEPTA booster and one of Philadelphia’s few Republican elected officials. “There’s a lot to be done. There are a lot of needs, and I think there’s a lot of people who really care about seeing them addressed.”
The “worst” budget fight in decades
SEPTA periodically has dramatic financial crises, when its operating costs and capital needs start to exceed its state funding. The most recent ones, in 2007 and 2012, came with familiarly dire predictions of route shutdowns and a diminished system, and were fixed by shifting turnpike tolls and other state funds to mass transit.
The system’s current problems, however, come at a particularly difficult moment of political division and fiscal uncertainty, experts say.
State Senate President Pro Tempore Kim Ward described the fight over this year’s budget as the “worst one” she’s seen in her 17 years in office, in part because of potential federal funding cuts. “I don’t remember us being in … this bad of a financial position,” the Republican lawmaker said in a TV interview Sunday.
Gov. Josh Shapiro has proposed increasing the state budget about 8%, to $51.5 billion, for the fiscal year that starts in July, with more money for education, health care, economic development and transportation. He would put an additional $292 million in sales tax revenue toward transit. Senate Republicans essentially rejected a similar transit proposal last year, triggering SEPTA’s latest crisis.
For the governor’s budget to work, the state would have to spend down its surplus and rainy day funds and also approve new sources of revenue. It depends on the legalization and taxation of both recreational marijuana and skill games, a type of quasi-legal video gambling device often seen in corner stores and American Legion posts.
That plan faces serious hurdles. While the state has an $11 billion surplus, Pittman and other Republicans argue Shapiro’s proposal threatens to drain it within a couple years. The skill games proposal is mired in disputes over how high to set that tax, and legalizing pot appears to be a long shot.
“Marijuana doesn’t seem like it’s going to go anywhere,” said Anselm Sauter, vice president of state government affairs at the Chamber of Commerce for Greater Philadelphia.
Rural vs. urban, GOP vs. Dem
There are other confounding issues as well, such as efforts by President Donald Trump and congressional Republicans to slash Medicaid spending, which would put pressure on the state to aid residents who lose their health coverage.
As a result, while residents and elected officials in Philadelphia, Pittsburgh, the Lehigh Valley and other relatively transit-heavy areas are urgently focused on keeping their agencies running, Republicans from many other parts of the state that have little or no transit are much more concerned about balancing the books.
“The biggest thing for Republicans is that 51.5 billion number. They want it below 50, however we get there. That’s kind of where their opening salvo is,” said Samuel Chen, a Republican political strategist and political science professor who lives in Allentown.
They’re also concerned by Shapiro’s inclusion of the new marijuana tax; it seems unlikely to happen, meaning “we’ve lost a half billion dollars of revenue that was planned for this,” he said.
Another complicating factor is a broad sense of resentment among many non-urban residents and legislators who feel that their priorities are continually neglected, Chen said. That’s in a range of areas, from transportation — as reflected in Dush’s email — to education funding and next year’s celebrations of the nation’s 250th anniversary.
“Easton was where the Declaration of Independence was originally read. Allentown is where the Liberty Bell and the Declaration were stored during the Revolutionary War,” he said. Yet so far, the commemorations planned for the Lehigh Valley “have received nothing, not a penny from the state. And the people here are livid.”
“There is a notion among Republicans and Democrats across the state that Philadelphia and Pittsburgh get all the attention,” he said.
Lots of ideas, but no breakthroughs
While a full budget bill has yet to be introduced, a bunch of different measures have been proposed related to transit and state revenues.
On Tuesday the Democrat-led House once again approved a bill endorsing Shapiro’s idea of spending more sales tax revenue on transit. The measure would also borrow $500 million for road projects, in an effort to satisfy a key Republican demand.
A measure authorizing state-run marijuana shops passed in the House last month but died in the Senate. Other legislators have said they will introduce bills to legalize and tax commercial pot sales — among them Philadelphia Sen. Sharif Street, who has teamed up with Republican Sen. Dan Laughlin of Erie County — but it’s not clear when they will do so and how the proposals will fare.
Shapiro wants to set the skill games levy at 52%, close to the rate at which casinos are taxed, while Pittman and other Republicans have proposed 35% and another bill would set it at 16%. The state’s casino industry is pushing for the higher rate; game maker Pace-O-Matic is arguing for the lowest figure, which Chen said “is not going to happen.”
Saval co-sponsored what supporters are calling the Transit For All funding package. It would create a statewide 6% fee on Uber and Lyft rides, raise a fee on car rentals from $2 to $6.50 per day, and boost the tax on leased cars from 3% to 5%. But Saval last week said he wasn’t sure those bills would advance in the legislature.
Sauter said the only transit funding idea that has made any real progress so far is Shapiro’s plan to simply spend more sales tax revenue, although he said skill games could still happen.
“The pathway for that is challenging, to say the least, and there’s a reason that they haven’t been able to do this for a couple of years,” he said. But among the different revenue proposals, it’s “the one that has, at least, the best chance.”
“I would put that at 50-50,” Chen said. “It really depends on if they can get the funding formula correct.”
The question now is whether someone will break the impasse over transit funding, and how.
Will Pittman let the skill games bill he co-sponsored come up for a vote? Will the $500 million in bonds for roads and highways satisfy legislators with rural constituencies? Will transit agencies get all the money they need, or not quite enough? Is there something else Republicans need, perhaps a SEPTA fare hike or some additional cost-cutting, so they can feel they’re protecting their constituencies?
Or will the challenges individual bills face and the parties’ broadly divergent priorities in Harrisburg lead to inaction on transit again, as they did last year?
They very well could, according to Chen.
“Kicking the can down the road is what the legislature does best,” he said. “The calculation is going to come down to, what kind of deal can we get? What kind of political capital do we have to spend?”
Spreading the good word about SEPTA
Republican lawmakers have put out memos with other ideas they say would help SEPTA, although they don’t come with any funding and have yet to be introduced as bills.
One would require SEPTA to contract with a private company to run its buses; the sponsors contend “this would likely generate additional savings to SEPTA.” Another, from Picozzi, talks generally about the benefit of “public-private partnerships,” updated bus routes, sales of advertising and naming rights, a crackdown on crime and fare evasion, and increased state fiscal oversight.
His bill would set “metrics and timelines for SEPTA to meet necessary benchmarks,” and “specifically require better enforcement” of quality-of-life crimes, among other requirements, his memo says.
In an interview, Picozzi praised the work SEPTA general manager Scott Sauer is already doing to improve the system, and said his goal is to bring forward the concerns of the many SEPTA riders he has spoken with. They want the system to be safer and more reliable, and for agency leaders to be responsible stewards of public dollars, he said.
“We want to set goal posts and make sure they’re accountable to actually deliver on that progress,” Picozzi said.
His broader aim is to promote a long-term “forward-looking” vision of the agency, he said. He’s been educating fellow legislators about the importance of stabilizing the transit authority’s budget so it can move ahead with big projects like the Bus Revolution, which aims to make bus routes more efficient, and Reimagining Regional Rail, an initiative to modernize the commuter rail network.
“I’ve explained to a lot of my colleagues who might not be as familiar with SEPTA as I’ve become — as I am as a lifelong rider — what the Bus Revolution is and what SEPTA is looking to do, and how there’s a level of clarity that they’re looking for to be able to implement some really positive changes,” he said.
As for the overall state budget, the first-term legislator declined to comment on the status of closed-door negotiations, but said, “There needs to be a revenue conversation.”
“Something should get done on the skill games issue,” he said. “In terms of what that exactly looks like and how much of it goes to mass transit, I can’t really say what the final picture is going to look like.”
