Updates

What Will New Funding Mean for SEPTA?

March 20, 2014

According to figures released last week  by the American Public Transportation Association (APTA), transit ridership across the US in 2013 was at its highest point in 57 years. Here in Greater Philadelphia, SEPTA has seen a significant uptick in usage over the past decade, with ridership growing nearly 15% between 2002 and 2012. This works out to an average annual growth of about 1.3%, which is in line with growth on peer systems during the same period. And while the most recent APTA estimates show minimal change for the agency over the past year, officials anticipate that ridership figures will continue to grow in the years ahead.

 

To its great credit, SEPTA has managed to accommodate this growth despite being hamstrung by deep and persistent underfunding. Comparatively speaking, SEPTA’s annual capital budget has been less than half that of select US peer agencies (see graph below). With such limited resources, SEPTA has not been able to keep up with critical repair and replacement needs, giving rise to a ballooning backlog of deferred capital projects across its system. Estimated today at $5 billion, this backlog has become an albatross that threatens to compromise service and place the agency’s overall viability in jeopardy.

 

Last year, the situation reached a critical stage: as SEPTA ridership hit a 23-year high, its annual capital funding was at a 15-year low. With ridership and funding trends headed in opposite directions, something had to give. So in September, with the Pennsylvania legislature stuck in an apparent deadlock on a long-debated statewide transportation funding package, SEPTA General Manager Joe Casey announced that without additional funding from the Commonwealth, the agency would be forced to make dramatic cutbacks in service. The “Doomsday Plan,” as SEPTA’s system realignment proposal came to be called by the media, called for the elimination of nine of SEPTA’s 13 commuter rail lines among other cuts that would together have reduced system ridership by an estimated 40 million riders per year.

 

Fortunately, this scenario never came to pass. With the surprising final-hour victory of Act 89 in November, SEPTA has put the Doomsday Plan on the shelf. By the time it is fully phased-in in 2018, Act 89 will provide close to $500 million in additional annual funding for transit systems across the state. And while Pennsylvania transit operators won’t see this level of funding immediately, the funds will scale up quickly: $60 million in additional statewide transit dollars in the fiscal year ending in June 2014 will rise sharply to $355 million in FY 2015. From there, the legislation indexes revenues to CPI growth, so funding levels will rise with inflation.

 
Putting New Funds to Use

 

As the state’s largest transit agency, SEPTA will receive approximately $340 of the total $500 million expected by 2018. With a capital budget more than double what it has today, the agency will be in a position to make major critical investments to shore up and improve its deteriorating system. Since the passage of Act 89, SEPTA has moved quickly to ready for the deployment of these new dollars. Last month, the agency held an open house to present its proposed capital plan “Catching Up,” which outlines capital investments in five phases over approximately ten years. Highlights of “Catching Up” include:

 

  • New vehicles. Vehicle replacement needs account for nearly $2 billion of SEPTA’s $5 billion capital backlog. On the Regional Rail system, SEPTA plans to move ahead with the replacement of aging locomotives that compromise service reliability and add bi-level coaches to increase system capacity. The aging fleet of Silverliner IV cars will be systematically be replaced with new Silverliner VI vehicles. SEPTA will also move forward with the long-overdue replacement of its trolleys. This will be a welcome change: at 32 years old, the average SEPTA trolley is nearly twice the age of the average light rail vehicle in the US.

  • Station improvements. SEPTA is also prioritizing station reconstruction and accessibility projects at the multimodal 69th Street Station, the Exton and Levittown Regional Rail stations, and the Margaret-Orthodox Station on the Market Frankford line. Also included in the proposed plan, though in a latter phase, is the massive overhaul of the century-old City Hall station, the dilapidated centerpiece of SEPTA’s system.

  • Structural fixes. Underlying these visible improvements, the new funds will also allow SEPTA to advance critical below-the-radar structural fixes that will increase the system’s efficiency and reliability. The Regional Rail’s Media-Elwyn line will see reconstruction of four viaducts whose condition likely would have forced SEPTA to impose service restrictions within the next two years if funding for their upgrade had not been made available. The Norristown high speed line’s Bridgeport viaduct - which was closed temporarily last summer for stopgap repairs to avoid safety risks - will also undergo a comprehensive upgrade. In addition to track work, power substations and catenary structure across the rail system will also see extensive upgrades.

Of course, completing all of these upgrades will take time, and the exact phasing of projects will be finalized as more is understood about how and when Act 89 revenues will be disbursed. That said, there’s little question that SEPTA finds itself in a much better position thanks to Act 89.

 

Going Beyond Act 89

 

Yet, even with the additional funds SEPTA will be forced to grapple with a gap between capital needs and available dollars. During the legislative debate that ultimately culminated in the passage of Act 89, SEPTA indicated that gradually eliminating its extensive capital backlog over 20 years would require approximately $452 million in additional capital funding per year. As noted above, once in full swing, Act 89 will provide an estimated $340 million in additional funding for SEPTA. It’s clear that to achieve system-wide state of good repair and pursue enhancements necessary to accommodate continued growth, the agency is going to need to identify additional sources of funding.

 

This becomes even more evident when you compare SEPTA funding levels to those of agencies with similar ridership, modal composition, and service region sizes. Even with the addition of full Act 89 funding, SEPTA’s annual capital budget remains significantly smaller than peer agencies in Boston, Chicago, New Jersey, and Washington, DC.

 

 

More extensive capital resources have allowed these transit agencies to maintain a larger share of their infrastructure in a state of good repair, freeing up more resources for system enhancements. As analysis by the Economy League and Econsult Solutions pointed out last year, capital funding levels on par with the $815 million Boston’s MBTA received in 2013 would allow SEPTA to completely eliminate its state of good repair backlog within twenty years. And Massachusetts legislators decided last year that funding levels for transportation in the Bay State were not sufficient, passing a bill that will provide an additional $200 million in annual capital funding for MBTA.

 

So while Act 89 represents a major victory for transportation in Pennsylvania, there’s still a long way to go to get to World Class levels of service and coverage. As transit becomes a more popular travel option, better funded agencies in other regions will be in an enhanced position to keep up with increased demand and deliver high-quality service. To close this gap and ensure that Greater Philadelphia enjoys World Class regional mobility over the long term, our region’s leaders are going to have to find ways to build on the success of Act 89 and take SEPTA the extra mile.