Gov. Josh Shapiro will intervene to save SEPTA from a potentially devastating set of fare hikes and service cuts by transferring $153 million in state highway funds to the cash-strapped transit agency, he announced in Philadelphia on Friday.
The governor said he will transfer the money from seven highway projects that are still in planning phases, allowing SEPTA to call off a 21.5% fare increase in January, and cancel plans to shut down some Regional Rail lines and reduce the frequency of bus and train service.
Shapiro said his decision to “flex” the funding creates a “bridge” for SEPTA for about seven months. The legislature now has until next June, when the fiscal 2026 state budget is finalized, to agree on a permanent funding boost for transit.
“There is no reason to keep that money on our balance sheet in the state when we can invest it in SEPTA right now and help this community,” he told a crowd of elected officials and SEPTA employees at the Franklin Transportation Center, referring to the highway project funding. “And to those Pennsylvanians from one of those communities affected by the transfer of these funds, we’re still going to get your projects done for you on time.”
Mayor Cherelle Parker and officials from Montgomery and Delaware counties praised Shapiro for shifting the funds.
“On behalf of the people of the city of Philadelphia and quite frankly, the 790,000 residents from southeastern Pennsylvania who depend on SEPTA, thank you for not just talking the talk, but walking the walk and delivering today,” Parker said.
Widespread calls to flex
SEPTA has a $240 million annual deficit related to the expiration of a state program that sent turnpike revenues to the agency, rising costs, and the end of federal pandemic relief aid. The deficit for the current fiscal year is $153 million.
Transit for All PA, a transit advocacy coalition, has for weeks been calling on Shapiro to “flex” highway funds to SEPTA, as then-Gov. Ed Rendell did during previous transit funding crises in 2005 and 2010.
Such moves have been criticized by Republican legislators who say they pit rural, highway-reliant districts against transit-heavy urban areas. As recently as Tuesday, Shapiro seemed skeptical of the transfer option, calling it a “stopgap measure” that wouldn’t fix structural deficits at SEPTA and other transit providers.
Advocates bombarded Shapiro with thousands of calls and emails, and Philadelphia council members and legislators from the region publicly urged him to act to prevent the fare hikes and service cuts. Late on Wednesday, the governor’s and Parker’s offices announced they would make a major announcement regarding SEPTA.
On Friday, a who’s who of southeast Pa. officials — including several City Councilmembers, Philadelphia schools superintendent Tony Watlington, elected officials from Montgomery and Delaware counties, House Speaker Joanna McClinton and other top Democratic legislators — gathered in a chilly bus bay at the terminus of the Market-Frankford El line.
With two buses parked behind him and a group of unionized SEPTA employees standing nearby, Shapiro characterized the funding move as the latest example of his “get s–t done” approach to infrastructure and economic development. He also stressed that transportation includes transit, in addition to the roads and highways that much of Pennsylvania depends on to get around.
“I’m mindful that for some people when they’re going to church, or some people when they’re going to school, or some people when they’re just trying to get home for dinner, their travels don’t take them over a rural bridge,” he said. “Instead, it requires you to ride a bus and it requires you to live in a community where hopping on a trolley or regional rail or the subway is the only way you can get around and the only efficient way you can get to and from where you need to go.”
“And so, just like we repair and maintain our roads and bridges in those rural and in those suburban communities, I think we owe it to the good people of Pennsylvania who take mass transit to be there for them and their families as well,” he said.
Shapiro and other speakers also noted the contributions of SEPTA’s largest union, Transit Workers Union Local 234. Shapiro’s office was involved in helping TWU and the transit agency reach a contract agreement this week and narrowly avoid a potentially crippling strike.
Looking forward to a fix
Shapiro’s announcement was quickly criticized by Senate President Pro Tempore Kim Ward, a Republican, who described the event as “a crisis of his own making” and “yet another example of how simply ‘showing up’ falls short in addressing complex issues.”
Ward sought to tie SEPTA’s problems to an unrelated dispute over funding for private school vouchers, which the governor initially supported but then vetoed earlier this year. “Gov. Shapiro and House Democrats prioritized education over mass transit by approving the largest budget increase ever for a traditional education system that continues to trap Philadelphia’s kids in failing schools,” she said.
Democrats and their allies, meanwhile, lavished praise on the governor for the funding transfer, while vowing to work with Republicans to find a permanent funding fix during next year’s state budget negotiations.
“This good man today has bought us another six months,” state Rep. Matthew Bradford, of Montgomery County, said at the press conference in Frankford. “We are going to spend the next six months in the most serious way possible to get this over the line, and we are not going to let party politics or region stand in the way.”
Philadelphia City Councilmembers Kendra Brooks and Nicolas O’Rourke said they applauded Shapiro for taking action and said “every level of government” must prioritize finding permanent revenues for SEPTA.
“Like many Philadelphians, we still worry about the pending rate hikes and structural deficit SEPTA faces,” they said in a statement. “We must use these coming months to find solutions that grow ridership and ensure the longevity of SEPTA for all Pennsylvanians.”
Smaller fare increase still on the way
The infusion of cash means that SEPTA will no longer hold hearings next month on the proposed 21.5% fare hike, and will not announce proposed route closures early next year, as had been planned.
SEPTA COO Scott Sauer called the funding transfer a “lifeline” for the agency.
“This fixes us this year,” he said, following Shapiro’s remarks. “In the spring, when we start talking about our fiscal 2026 budget, which begins July 1 of next year, we are going to be right back here again talking about fare hikes and service cuts. What this money does now is it postpones everything.”
However, SEPTA will still go ahead with a separate set of fare increases on Dec. 1 that will average 7.5% across the system.
For riders in the city who pay with Key cards or apps, their per-trip cost will jump from $2 to $2.50. There will also be an increase for Key card payments for Regional Rail trips, and in the fares paid at kiosks, ticket offices, and aboard trains in zones 2, 3, 4, and New Jersey. Pass fares will be unchanged.
In the past, the agency has raised fares about every three years, but it skipped an increase in 2020 to avoid aggravating a sharp drop in ridership during the pandemic. The last increase was in 2017.
SEPTA has also put on hold its long-planned Bus Revolution, which would simplify bus routes and add more frequent trips on some routes, and was set to roll out starting next summer. Sauer said it remains in limbo pending more news on a permanent state funding boost.
