SEPTA’s plan to make what it describes as modest fare hikes starting December 1 is drawing pushback from riders who say the agency should consider other ways of addressing its budget woes.
Some customers object to an increase in the fare for riders in Philadelphia who use SEPTA Key cards or mobile systems like Apple Pay. Their per-trip cost would jump 25%, from $2 to $2.50, bringing it in line with cash fares and ending a longtime Key card discount.
“Twenty-five percent is not modest. It is the highest fare increase that SEPTA has ever put on Key card riders,” consumer advocate Lance Havers said at a hearing on the plan Wednesday morning. “It is the highest fare increase that SEPTA has ever done, and it will, according to past history, lead to lower ridership.”
Along with the reinstitution of parking fees at Regional Rail lots, the fare hikes are expected to bring in an additional $14 million a year. That figure accounts for an expected 2% drop in trips due to the increases and an accompanying loss of revenue, said Mike Seonia, SEPTA’s director of revenue, budgets, pricing and analysis.
In the past, the five-county transit authority aimed to raise fares about every three years to keep up with inflation, but it skipped a planned increase in 2020 because of a sharp drop in ridership during the pandemic and hasn’t proposed another until now. The last increase was in 2017.
Across the system, the new fare hikes average out to a 7.5% increase, SEPTA officials say. But CEO Leslie Richards has been warning for months that a much larger increase, which would boost fares an additional 30%, could be coming in 2025, if the state legislature doesn’t act quickly to increase its annual contribution to the agency’s budget.
The state Senate and House have just a few scheduled session days remaining, and it appears increasingly unlikely that legislation to boost SEPTA’s budget — via a new tax on video gambling machines or other sources — will pass this year.
Nonetheless, at the start of Wednesday’s hearing, Richards said, “We’re confident that our funding partners in Harrisburg will act this fall to close the remaining gap. Action is needed to avoid significantly larger fare increases and service cuts as early as this winter.”
The free rider problem
In addition to the fare hike for Key users within Philadelphia, a number of other prices would also increase. Those include Key card payments for Regional Rail trips, and the fares paid at kiosks, ticket offices, and aboard trains in zones 2, 3, 4, and New Jersey. Pass fares will be unchanged.
At the same time, SEPTA will eliminate restrictions on the direction of travel for transfers, and move three Zone 2 stations to Zone 1.
“These fare changes represent substantial progress towards a vision for a region that places transit at the core of a resilient, prosperous, and equitable community for everyone, even in the face of significant challenges,” said Thomas Kelly, SEPTA’s senior director of financial operations.
However, riders and advocates who spoke at the Wednesday morning hearing urged authority officials to find other ways to raise revenue, for example by going after fare evaders.
Rider Raul Colon said he continually sees people riding the bus without paying any fare, or only paying a small amount like a quarter or a dollar, and he urged SEPTA to crack down.
“You’re losing a lot of money with the free riders, and then you want to make the ones who pay, pay the price for that deficit. That’s not fair,” he said.
Riders evade fares for 18% of trips, at an estimated cost of $30 million to $68 million in lost revenue each year, the Inquirer reported. In an effort to reduce those losses, this year SEPTA started filing charges against fare evaders who are caught, rather than issuing fines that are rarely paid. It’s also spending $7 million to install new fare gates that are hard to jump over at several stations.
A recent federal safety inspection found that people arguing with vehicle operators over fare payment is the primary cause of assaults in the system. SEPTA has deemphasized having drivers enforce payment in favor of playing automated announcements of fare requirements.
“I understand where the driver shouldn’t have to get into a verbal confrontation with these people, but that’s what you have the SEPTA police for,” Colon said. Operators “should be able to signal the police and get these people off. Let people know, hey, we’re not playing around. You’re going to pay or you’re gonna get put off the bus.”
Fears of a doom spiral
While SEPTA has characterized the December fare hike as a separate matter from its efforts to close a $240 million annual budget deficit, the prospect of service cuts and more price increases hung over Wednesday’s hearing.
Nicolas Meyering, a transit advocate and chair of the Mayor’s Commission on People with Disabilities, said disabled individuals are at higher risk of dying in car crashes than nondisabled people, and a well-funded transit system is essential for them to stay safe and get around the city.
“Increased fare prices can lead to reduced ridership. Then, a couple years later, reduced ridership will result in funding lags, which means even more fare [hikes]. And then the cycle repeats every few months or every few years, a literal cycle of doom,” he said. “This fare increase threatens the mobility and livelihood of disabled and young Philadelphians.”
Haver, meanwhile, hammered SEPTA officials at the hearing for not cutting administrative spending or using saving reserves to reduce or eliminate the fare increases.
Formerly the city’s director of consumer affairs and later City Council’s director of civic engagement, Haver submitted a list of questions about SEPTA’s finances and the fare hike, which the agency said it would respond to in writing. That led him to complain that SEPTA was not providing him enough time to receive the information and respond with comments that would be considered as part of the hearing.
SEPTA held an additional hearing on the increases Wednesday afternoon. The deadline for the public to submit comments is this Friday, October 18, and SEPTA’s board is expected to approve the changes November 21.
In response to a question from Haver, SEPTA CFO Nikolaus Grieshaber said SEPTA’s Service Stabilization Fund had $565 million as of June.
“SEPTA is attempting to raise fares to generate $14.4 million,” Haver said. “The question is, do they need that, or is there enough money in the fare stabilization fund to eliminate the need for a 25% fare increase?”
The stabilization fund is a reserve account that PennDOT wants SEPTA to maintain at 25% of its operating budget, according to SEPTA’s 2024 budget proposal. As of June, the fund was apparently closer to one-third of the agency’s $1.7 billion budget. The budget proposal document says the fund “will be insufficient to balance the magnitude of recurring structural deficits” that the agency expects over the next five years.
Haver also argued SEPTA could avoid the fare hike by cutting an equivalent amount of spending on outside legal counsel.
