SEPTA Approves $2.7 Billion Budget, Deficit Shrinks To $192 Million

The SEPTA Board last week greenlit a $2.7 billion total budget for Fiscal Year 2027.

SEPTA officials said the new budget is a 1.9 percent spending increase over the current year while keeping service levels steady and avoiding fare hikes.

The approved spending plan allocates $1.84 billion for the transit authority’s operating budget and $920.7 million for its capital budget.

Agency officials noted the approved headcount for the authority is 9,996 employees, which is a decrease of 53 positions from the previous budget.

While the budget includes customer-facing investments such as new buses, additional full-length fare gates, and infrastructure upgrades, transit officials have previously warned that the agency’s long-term future remains highly uncertain without a permanent funding solution from the state.

The approved operating budget relies on the second and final year of a $394 million capital funds transfer authorized by PennDOT to sustain operations.

The temporary funding measure followed a highly watched standoff over SEPTA funding, which ended last year when Democratic Gov. Josh Shapiro approved using PennDOT money for public transportation alongside a warning that a long-term solution was needed.

“SEPTA continues to demonstrate meaningful progress in safety, reliability, cleanliness, ridership recovery, and fiscal discipline,” SEPTA Board Chair Kenneth Lawrence Jr., a former Montgomery County commissioner, said in a statement. “The budget we approved today reflects SEPTA’s ability to be good stewards of taxpayer dollars and worthy of stable, dedicated funding.”

The agency has shaved nearly $30 million from its annual expenses through ongoing austerity measures. It also boosted revenue from advertising, parking, and investments.

The fiscal belt-tightening helped lower SEPTA’s structural budget deficit from $213 million to $192 million, according to the authority.

“The progress we have made over the past year demonstrates how SEPTA is delivering for its riders and the communities we serve, and this budget creates the foundation for SEPTA’s future,” SEPTA General Manager Scott Sauer said.

Funding for the budget relies on required local matches on state funds provided by Philadelphia, Bucks, Chester, Delaware, and Montgomery counties.

In Bucks County, SEPTA provides Regional Rail, bus, and paratransit services.

The county is represented on the SEPTA board by attorney John Cordisco and Matthew Trzaska.

SEPTA’s broader 12-year Capital Program targets critical infrastructure and vehicle replacement projects, including its Trolley Modernization initiative, station accessibility improvements, and the procurement of new cars for the Market-Frankford Line. The reduced structural deficit also allowed the agency to restart its bus fleet replacement program for Fiscal Year 2027.

The 12-year capital blueprint relies heavily on borrowing, with plans to take on $4.3 billion in debt to fund essential railcar replacements.

Officials highlighted that SEPTA’s state of good repair backlog has doubled over the last 10 years to $10.2 billion.

Inflation threatens system reliability and increases future maintenance costs, officials warn.

The agency’s capital budget continues to hover at one-third to one-half of the funding levels seen by similar transit systems across the country.

The board also approved a new Five-Year Strategic Plan, which agency officials described as a roadmap to transition SEPTA from “back-to-basics to best-in-class” by establishing explicit goals and performance metrics.

The strategic plan comes amid a four-year streak of post-pandemic ridership growth.

Authority officials highlighted that serious crime on the system has dropped to its lowest level in a decade, adding that enhanced fare evasion enforcement has mitigated revenue losses.

Additionally, missed bus trips have been cut nearly in half during what officials called the largest fleet modernization in a generation.

“SEPTA’s Five-Year Strategic Plan sets a clear direction for what comes next,” the agency said in a statement.

The board also finalized a new three-year contract with the Fraternal Order of Transit Police Lodge 109, which represents the agency’s transit police officers.

FOTP members voted to ratify the agreement last week, after the expiration of the previous contract on March 31.

“SEPTA negotiated in good faith to reach an agreement that is fair to its current officers and will continue to make a career with the SEPTA Transit Police attractive to new recruits,” according to a statement from transit officials.

The agency’s recruitment efforts saw 15 cadets graduate earlier this month, with an additional 18 recruits scheduled to enter the police academy in July.