This story originally appeared on Spotlight PA.
Dwindling federal stimulus dollars and shifting ridership have placed Pennsylvania’s dozens of transit agencies on high alert as they map out their future operations.
The end of this federal funding may force many of these systems to cut already reduced service even as ridership bounces back from its pandemic-era lows — a scenario that could feed a downward spiral in which decreased revenues necessitate more service cuts and fewer riders yield smaller revenues.
Backers of public transit, which carries hundreds of thousands of Pennsylvanians every day, want the state to send more money to these agencies. It’s a call that Gov. Josh Shapiro, a Democrat from suburban Philadelphia, plans to echo in his Feb. 6 budget address.
In a statement, Shapiro said he wants to route $1.5 billion in new state aid to public transit over the next five years.
“Investing in and improving our public transit systems is a commonsense way to create good-paying jobs, spur economic development, and help Pennsylvanians reach their destinations safely,” Shapiro said.
The proposal doesn’t suggest raising taxes. Instead, it would increase the amount of sales tax revenue transferred out of the state’s general fund, its primary bank account, to transit. This would leave fewer dollars to pay for other priorities like education and criminal justice.
Such an increase in aid would also require legislative approval from the GOP-controlled state Senate, whose leaders have so far said the proposal could be a tough sell.
State Senate Majority Leader Joe Pittman (R., Indiana) said that an expansion in state transit funding “warrants serious scrutiny” and called for a complete look at the state’s infrastructure spending.
“All areas of our state, rural, suburban and urban, must have a strong and reliable transportation network,” Pittman said in a statement.
Richard Farr — chair of the government affairs committee of the Pennsylvania Public Transportation Association, a trade organization that lobbies on behalf of agencies — told Spotlight PA that all transit systems in the commonwealth, regardless of size, will exhaust their federal stimulus dollars within the coming year and be left with hard choices.
The impending fiscal cliff isn’t just a Pennsylvania problem. Nationally, two-thirds of transit agencies predict budget deficits by 2025, according to a survey by Transportation for America, a think tank based in Washington, D.C.
“We are all traveling in the same stream,” Farr told Spotlight PA. “We’re just in different parts of the stream going the same direction.”
“Expenses are going up, up, up”
Pennsylvania spends a lot on transit.
Last year, $1.25 billion went toward day-to-day operating expenses around the state and $650 million went toward larger, one-time capital expenses, almost exclusively to SEPTA and PRT. That’s among the highest per-capita state transit allocations in the country, according to Transportation for America.
Under Pennsylvania’s 2013 state transportation funding law, Act 89, this money is automatically routed to PennDOT from assorted state taxes and fees, and varies year to year based on how much the state brings in.
It is then distributed to Pennsylvania’s 57 transit agencies through a formula based on total passengers and vehicle miles traveled, and funds a range of services — from SEPTA’s sprawling network of bus and rail lines in Philadelphia and its suburbs, to rural van services that take older Pennsylvanians to doctors’ appointments.
But that relatively robust spending doesn’t insulate the commonwealth’s transit systems from economic shifts, said Michael Danchak, director of finance, grants, and administration for the County of Lackawanna Transit System, or COLTS.
From wages to gasoline to insurance, agencies’ fixed costs have ballooned in recent years due to inflation, Danchak added.
“Expenses are going up, up, up,” he said. “So you can budget as much as you want, but if you’re going to run a base level of service, you’re going to have costs that increase 10%, 15%. That’s undeniable. You can’t get around that.”
Mary Buchanan, research manager at the New York City-based transit think tank TransitCenter, said protecting agencies from service cuts is critical, as most transit agencies rely on a volatile and often regressive funding structure.
This can be seen in Pennsylvania’s current transit system, in which state sales tax revenue is dispensed to agencies using a formula that includes total ridership as one of four factors that determine how much their funding increases each year.
However, both sales tax revenue and ridership can fall with even a small economic downturn. To make up for lost dollars, agencies may reduce service. But a service reduction lessens rides, further reducing fares and revenues, and allowing the cycle of cuts to repeat.
This happened during the Great Recession and the COVID-19 pandemic, Buchanan said. And absent changes, “we’ll probably see this sort of situation again in the future,” she continued.
Dori Knobloch, a 49-year-old Erie resident, saw this instability firsthand. Whether she’s heading to the mall, a volunteer site, or a downtown bar to catch a concert, she relies on the Erie Metropolitan Transit Authority, or EMTA, for about three round trips a week.
That’s less than she used to. Before the pandemic, the EMTA ran all weekend. But as a cost-saving measure, the agency cut Sunday trips from its schedule. Knobloch, who uses a wheelchair, had a much quieter social calendar following the adjustment.
“It kind of gave away my freedom,” Knoblock told Spotlight PA. She couldn’t make it to church and accompanying social events until her denomination added a Saturday service two years later, she said.
The EMTA did not respond to a request for comment.