HARRISBURG — A temporary fix for public mass transit pains experienced in greater Philadelphia was approved by Gov. Josh Shapiro on Monday, with the governor directing PennDOT to allow up to $394 million in capital improvement funds to be used to supplement the costs of daily operations.
The Southeastern Pennsylvania Transportation Authority’s general manager, Scott Sauer, requested the funding on Friday following a city court order forcing the transit system to reverse acts it had already taken to address its deficit spending, overturning a 20% service reduction that saw dozens of bus routes eliminated or shortened at the start of the new school year.
Cuts to metro rail service were averted; however, planned fare increases averaging 21.5% weren’t impacted by the order.
The cuts were challenged in court over concerns of discrimination against poor and minority communities, according to The Philadelphia Inquirer.
Without a state budget solution on the horizon, the Shapiro Administration moved ahead with a short-term plan that Transportation Secretary Mike Carroll framed as a more responsible alternative to a similar plan floated by Republicans in the Senate majority and roundly rejected by the governor and legislative Democrats. The governor’s office said the funds would stave off service cuts for two years.
The governor’s office said the move ensures that SEPTA will be fully operational ahead of “high-profile events in 2026, including America’s 250th anniversary, the FIFA World Cup, and the MLB All-Star Game. Additionally, SEPTA will be able to continue to meet the needs of nearly 800,000 Pennsylvanians every day — including 52,000 students in the School District of Philadelphia and hundreds of thousands of workers who take SEPTA every day.”
The Senate is in session on Monday and is expected to take up transit bills on the committee level. The state budget was due June 30 but the respective majorities in the House and Senate haven’t reached an agreement on a deal. The House isn’t scheduled to return to the Capitol until the end of September.
The Shapiro Administration squarely blamed Senate Republicans for failing to approve legislative proposals to fund public transit statewide, not only in Philadelphia, the last of which sought to shift more revenue from the existing sales tax toward transportation, both transit and road and bridge work.
“Unfortunately, Senate Republicans have refused to agree to a long-term solution that provides certainty and does not also unfairly raid mass transit capital dollars for unrelated expenditures — and the Shapiro Administration believes Pennsylvanians who rely on SEPTA deserve service that helps them get to work, school, or wherever they need to go,” Carroll wrote to SEPTA in an approval letter.
The Senate GOP majority supported an alternative, drawing down from the Public Transportation Trust Fund for transit and roadway infrastructure — a $2.4 billion trust for capital and infrastructure projects such as new trains or repairs to rail lines — while a long-term solution was negotiated.
Carroll said there were five key differences between the Senate Republican plan and the one approved by the Shapiro Administration — that the funding offered was insufficient, it would have cut into two years of capital funding without a revenue source to replace the funds, it would have taken from projects already underway, the Senate’s plan wasn’t a longterm solution, and it would have redirected $419 million away from the Public Transportation Trust Fund and toward road and bridge work as a compromise on the issue.
“While PennDOT and the Shapiro Administration support funding for road repair projects and have allocated significant resources to that work, we do not believe utilizing mass transit funding for such purposes is sound public policy,” Carroll wrote in an approval letter to SEPTA.
The transportation secretary wrote that the approved plan would utilize funds that haven’t yet been obligated within PTTF for 2025-26 and not draw from other projects. As part of the approval, SEPTA has to report to PennDOT on measures it is taking to make the system more efficient, one that had a $213 million deficit entering the new fiscal year.
Senate Minority Leader Jay Costa, D-Allegheny, said Democrats have worked for three years to implement a sustainable solution to transit funding woes and noted that five different plans were advanced by the House Democratic majority, all failing to clear the Senate.
The governor’s office noted that in addition to the $292 million requested in new funding — estimated to reach $1.5 billion across five years — as well as $80 million in new funds in the 2024-25 budget plus another $153 million in federal highway dollars flexed in late 2024 to help SEPTA avoid the cuts it ended up pursuing this summer.
“So today, the Governor and PennDOT took the last, worst step that was available and accepted SEPTA’s request to access capital funds intended to provide for safe and efficient transportation service and to divert them for operational needs to restore the transit service that Philadelphia runs on. This is not ideal, but is necessary, and we applaud the Shapiro Administration for taking this bold action,” Costa said in a prepared statement.
“We will be back at this again in the near future. This action is a temporary solution. We hope that we will not be back again next year fending off avoidable service reductions and more pain for the citizens,” he said.
Senate Republicans haven’t yet commented on the development.