SEPTA releases proposal for FY24 operating budget, cautions about pending fiscal crisis in FY25

Southeastern Pennsylvania Transportation Authority (SEPTA) outlined a proposed Fiscal Year (FY) 2024 Operating Budget that includes the final installment of federal COVID funding relief and holds off service cuts and fare increases, but reflects a significant increase in everyday expenses that threatens the financial stability of the authority.

SEPTA warns it will face recurring structural deficit exceeding $240 million starting in FY25. The final installment of $289.4 million in federal COVID relief will be exhausted in April 2024 and, without additional funding, the authority says service cuts and fare increases as early as next year will be under consideration.

“We are doing absolutely everything we can to grow revenue through ridership growth and tighten our belts through efficiencies, but those measures alone are not enough,” said SEPTA General Manager and CEO Leslie S. Richards. “This will be the last budget proposal without service cuts and fare increases unless SEPTA receives additional support from our funding partners.”

The FY24 Operating Budget proposal anticipates ridership to be 96 percent of pre-pandemic numbers on bus and metro rail while regional rail is anticipated to be 77 percent of pre-pandemic numbers. Revenue in the proposed budget reflects a 12.5 percent increase from FY23 driven by an increase in fixed-route passenger revenue, full funding from SEPTA’s Shared Ride Program and an increase in investment income associated with interest rate growth.

SEPTA explains the budget has been significantly impacted by inflation, with a proposal for FY 24 that is 4.7 percent above the budget for current FY23.

The budget proposes continued investments in safety and security; hiring to address historically high vacancy levels and new technologies to improve the customer experience. Costs have been offset by the implementation of SEPTA’s Efficiency & Accountability Program, which the authority reported delivered $38.3 million in annual recurring benefits at the end of the first year. The savings from the program are reflected throughout the operating budget proposal.

Targeted fare enhancements are included in the proposal to continue to boost ridership post-COVID. The proposal would make travel more convenient and affordable by providing customers with access to a second free transfer and by adding 24 inner-ring Regional Rail stations to the network of stations accessible with a weekly and monthly TransPass, including all Zone 1, Airport Line and Center City stations.

The proposal also features the ongoing expansion of SEPTA Key Advantage, which now has more than 30,000 participants and recently expanded eligibility to all employers, colleges and universities across the region.

There will be four public hearings about the Operating Budget in May, and the SEPTA Board will consider the proposal at its June meeting. If approved, it will go into effect with the start of FY24 on July 1. SEPTA will share its proposed FY24 Capital Budget and 12-Year Program in one week.