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Tuesday, November 3, 2009

Does SEPTA really have the money?

Here's an interesting wrinkle to the SEPTA strike: Both sides in the contract negotiation are presently assuming that state money for SEPTA will stay at its current levels, according to SEPTA spokeswoman Jerri Williams.

But that’s by no means certain.

One of the reasons SEPTA appears to be in decent financial shape is Act 44. The legislation, which Gov. Rendell signed into law in 2007, provided the transit authority with its first dedicated source of state funding. SEPTA is expected to get $850 million this year from the state, with 2.5 percent increases every subsequent year.

That money has been financing most of SEPTA’s recent capital and operating improvements: increased service on buses and regional rail, the smart card fare collection system, more money to replace aging infrastructure.

The union has argued that SEPTA’s improved finances should also support pay and benefit increases for its workers.

But by the end of this fiscal year, SEPTA could see its capital subsidies cut $110 million and its yearly funding increases eliminated, because the state has thus far been unsuccessful in getting federal permission to toll Interstate 80. The new toll was supposed to help finance the spending.

Those cuts wouldn't immediately impact SEPTA workers, who are paid out of the authority’s operating budget. But they may force SEPTA to raid the operating budget in order to finance its current capital program, which includes contracts the authority has already signed.

SEPTA and the state seem to be optimistic that these cuts won’t happen — they’re hopeful the Obama administration will be more receptive to the tolling proposal than the Bush administration was.

But if that doesn’t happen, SEPTA will be hard up for cash. Both sides should be cognizant of this possibility as negotiations move forward.

(A representative of Transport Workers Union Local 234 didn’t immediately return a call for comment.)

Review city services on our sister site, City Howl.
Posted by Anthony Campisi @ 12:01 PM  Permalink | 3 comments
Comments   
  • 0 like this / 0 don't   •   Posted 12:24 PM, 11/03/2009
    Just get the transit workers union to call obama and tell him to toll I-80, worked for the auto unions.
    — rmg154
  • 0 like this / 0 don't   •   Posted 1:52 PM, 11/03/2009
    http://www.septa.org/inside/reports/FY10_Budget_internet.pdf
    — citylumberjack
  • 0 like this / 0 don't   •   Posted 10:43 PM, 11/04/2009
    Who cares how much SEPTA is making? Worker compensation should be based on supply and demand for that skillset. End of story.
    — johnklevas


3 comments
About It's Our Money
Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.




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