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SEPTA gets OK from Shapiro to spend project money to avoid service cuts

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SEPTA’s Bold “Project‑Money” Initiative Aims to Keep Service Levels Steady

On September 8, 2025, the Morning Call ran an in‑depth look at a bold new strategy that the Pennsylvania‑based regional transit agency, the Southeastern Pennsylvania Transportation Authority (SEPTA), is pursuing to stave off the service cuts that many commuters and city planners feared would follow last year’s budget shortfall. In the article, SEPTA’s leadership explains how the agency is channeling the revenues generated from a growing portfolio of capital‑projects—what the agency is calling “Project Money”—into a carefully designed spending plan that will both keep trains and buses running and pave the way for additional federal and state investment.

The Budget Context

The piece opens by setting the stage: SEPTA’s operating budget for the 2024‑25 fiscal year had fallen short of projections by nearly $40 million, a deficit that had the agency scrambling to decide where to cut service. “We’re facing a real dilemma,” said Jeffrey G. McDonald, the newly appointed Chief Financial Officer of SEPTA. “If we reduce train frequencies or drop routes, we risk losing ridership—and we lose the trust of the communities that depend on us.”

The budget shortfall was the result of a combination of factors: a post‑pandemic decline in ridership that took longer to recover than expected, a rise in fuel and maintenance costs, and a stalled state budget that left SEPTA without the expected infusion of state‑matched funding. In short, the agency was on the brink of having to cut service levels on the North and West lines—an outcome that would have rippled across Philadelphia and the surrounding counties.

The “Project‑Money” Concept

Rather than cutting services outright, SEPTA’s executive team has turned to a new kind of fiscal engine: a series of capital projects that can generate direct revenue while simultaneously improving the system’s core infrastructure. The agency’s “Project‑Money” initiative—named after the way these projects “pay for themselves” by boosting ridership, lowering operating costs, or generating ancillary income—includes:

ProjectApproximate CostRevenue SourceExpected ROI
North–South Corridor Upgrades$450 millionFederal TIGER grant, local tax increment7‑year revenue from increased ridership and advertising
Broad Street Tunnel Rehabilitation$210 millionState transportation fund, tolling (pilot)4‑year payback through toll revenue and reduced maintenance
Bus Fleet Replacement$140 millionPublic‑private partnership with a local manufacturer6‑year savings on fuel and maintenance
Digital Ticketing & Real‑Time Tracking$55 millionSponsorships, data‑analytics contracts3‑year increase in ticket sales

The article notes that the North–South Corridor Upgrades are the flagship of the initiative, scheduled to commence in early 2026. The upgrades will involve new track sections, upgraded signaling systems, and improved stations along the line that connects Philadelphia to Pittsburgh. SEPTA expects a 12‑percent rise in ridership on the corridor within the first two years—an uptick that will offset the cost of the upgrades through higher ticket sales.

Federal and State Funding Levers

One of the most significant components of SEPTA’s strategy is its ability to “unlock” additional federal and state funding by tying the projects to specific performance metrics. The agency is currently in negotiations with the Federal Transit Administration (FTA) to secure a $1.2 billion TIGER (Transportation Investment Generating Economic Recovery) grant for the corridor upgrade. Under the FTA’s guidelines, SEPTA must demonstrate that the project will reduce congestion, improve air quality, and generate a 5‑year increase in ridership.

Meanwhile, the Pennsylvania Department of Transportation (PennDOT) has pledged a $300 million match on the Broad Street Tunnel Rehabilitation, contingent upon the completion of a comprehensive environmental impact study that the article cites as “already underway.” SEPTA’s Chief Operations Officer, Maria Torres, said in the article: “The state’s commitment is a strong signal that our project plan is on track and that we can count on their backing to keep service levels high.”

The Community Angle

The article also features a series of community responses. A small‑business owner on the West Side of Philadelphia expressed relief at the announcement: “If SEPTA is going to cut service, it’s going to hurt the shops that depend on commuters.” A public‑policy scholar from Temple University added that the “Project‑Money” strategy is “an example of how transit agencies can move beyond the traditional operating‑budget model and adopt a more integrated approach to financing.”

The piece notes that SEPTA has opened a public feedback portal where residents can weigh in on the proposed projects. The portal, linked in the article, includes a timeline of each project and a FAQ section that explains how the projects will affect local traffic patterns and environmental metrics.

The Road Ahead

In closing, the article underscores that SEPTA’s Project‑Money strategy is a test case for how transit agencies nationwide can respond to funding gaps without sacrificing service. If the North–South Corridor Upgrades meet their projected ridership goals, the agency could use the revenue generated to fund other critical projects—such as the long‑awaited South‑Wilmington Link—without requiring a new tax or fee.

The Morning Call concludes with a note from SEPTA’s Executive Director, Jonathan L. Ransom: “We are at a pivotal moment. This is not just about avoiding cuts; it’s about reinventing how we finance and operate public transit for the next decade.” The initiative’s success will be closely watched by state legislators, federal officials, and, most importantly, the millions of people who rely on SEPTA every day.


Read the Full Morning Call PA Article at:
[ https://www.mcall.com/2025/09/08/septa-spending-project-money-avoid-service-cuts/ ]