Andy Sharpe
T, Th. 1:10-2:30
April 26, 2007
PS 145 Research Paper
It is a Monday morning, and I am entering the Wyndmoor Train Station, en route
to an 8:40 Sociology class. As I gaze at the station, I notice the stain of rust surrounding
the façade, with fast food wrappers and long-soaked newspaper sections littering the quay.
As the SEPTA train approaches, five minutes late, I smell the acrid odor of train exhaust.
I enter the train and see discarded coffee cups lining the seats, while the coffee that once
filled them is dried on the floor beside the seats. It has long been clear to me how many
problems SEPTA has, with regard to trains, trolleys, and buses, but this moment serves as
a clarion call for the need to a solution. SEPTA is an acronym that stands for
Southeastern Pennsylvania Transportation Authority, which serviced 299 million riders in
2005 and is one of the most expansive transportation services in the United States
(Septa.org). However, in order to achieve a solution the five-county transit agency sorely
needs money. Most of the money allocated to SEPTA comes from the state of
Pennsylvania, but lawmakers from both political parties cannot agree on how to provide
SEPTA with more money. It seems like everyone, from Governor Ed Rendell, to
Pennsylvania Senators and Representatives, to candidates for mayor in Philadelphia, has
their own idea of how to adequately fund SEPTA and enable it to succeed.
First of all, details of SEPTA’s current budgetary problems warrant mention.
SEPTA’s budget deficit for 2008 is expected to be $129 million (SEPTA 2008 Fiscal
Year Budget Proposal). Part of this deficit can be explained by SEPTA’s rising tide of
riders. As a matter of fact, the transit authority envisions an increase of $31 million for
the 2008 fiscal year, which is a 3.15% increase over the previous year (SEPTA 2008
Fiscal Year Budget Proposal).Most of this money will go to “wages, materials, and
services” (SEPTA 2008 Fiscal Year Budget Proposal), which reflects SEPTA’s growing
ridership. In order to try to offset these expenses, SEPTA relies on two methods of
earning revenue. One way is procuring revenue from riders, which currently accounts for
$43,983,600 for a year. The other way in which SEPTA accounts for money is by subsidy.
Subsidies equip SEPTA with $45,283,400 (SEPTA 2008 Fiscal Year Budget Proposal).
Of the providers of subsidy, the state of Pennsylvania is by far the most lucrative payer,
more than tripling the funds from the next highest contributor (SEPTA 2008 Fiscal Year
Budget Proposal). Regrettably, this combined revenue of $89,267,000 is not enough to
outstrip the operating costs. The numbers tell the story of SEPTA’s dire budgetary straits.
In response to SEPTA’s budget morass, Pennsylvania governor Ed Rendell used
an Executive Order to form the Pennsylvania Transportation Funding and Reform
Commission. This commission was composed of 9 members, Democrats, Republicans,
politicians and businesspeople (Pennsylvania Department of Transportation). These 9
members delved into the problems of various Pennsylvania transit agencies for 16 months.
One of the chief findings of this commission was that “the financial underpinning of the
Commonwealth’s transit program is inadequate and the program structure is
dysfunctional. The program and revenue streams need to be completely revamped”
(SEPTA Funding: The Final Crisis?) In other words, this bipartisan commission
lambasted the state for not providing proper funding for SEPTA and other transit
agencies. Also, the commission seemed to deflect blame away from SEPTA in saying
that SEPTA is efficient for its size, and is sincerely focused on balancing its budget. Also,
the commission reiterates that SEPTA financial needs are not being met by the state
(SEPTA Funding: The Final Crisis?). In terms of real numbers, the Transportation
Funding and Reform Commission recommended $760 million in additional transit
funding across the state (Pennsylvania Transportation Funding and Reform Commission
Proposes Solutions to Address State's Critical Needs for Highways, Bridges and Public
Transit). The Commission advised the state government to procure this money through a
few ways. One way would be to make a change to the realty transfer tax, which would
raise some money. Staying with taxes, the commission recommended a portion of either
the state sales or personal income tax go to a new fund set aside for SEPTA. This fund
would be a more streamlined version of the existing fund, known as the Public
Transportation Assistance Fund of 1997. (Pennsylvania Transportation Funding and
Reform Commission Proposes Solutions to Address State's Critical Needs for Highways,
Bridges and Public Transit). Governor Rendell’s Pennsylvania Transportation Funding
and Reform Commission offered a blueprint for SEPTA’s funding woes and how to fix
them.
After reviewing the recommendations of the Transportation Funding and Reform
Commission, Governor Rendell has proposed privatizing the state turnpike and raising
taxes to raise money for SEPTA. Rendell foresees being able to raise $760 million for
various state transit agencies, although most of the money will be used for SEPTA. Some
of this money is supposed to come from a $12 billion lease on the Pennsylvania turnpike,
while Rendell hopes more money will come from a 6.17% increase in taxes on oil
company profits (Rendell Pressing to Lease Turnpike). One complicating factor behind
this plan is that the Governor wants even more money to go to fix highways and bridges
throughout the state. Timing is another problem, as the fall of 2007 is likely to be the
earliest the Governor can expect to see the turnpike in private hands. The tax on oil
companies could take even longer to implement, because of expected opposition in the
courthouse from oil companies. As many as 48 companies have shown an interest in
leasing the turnpike. One of the most credible applicants is the Turnpike Commission,
which currently drives the turnpike. The Turnpike Commission has submitted a plan that
it says will raise $150 million for public transportation. The cornerstone of its plan is to
raise exit toll fees in major cities that have public transportation in Pennsylvania,
including Philadelphia. Also, the Turnpike Commission wants I-80 to become a toll road
starting in 2011. However, the Governor is skeptical of this plan, for fear that it will not
raise enough funds (Rendell Pressing to Lease Turnpike). Governor Rendell’s idea for
relaxing SEPTA’s pecuniary crisis is to privatize the Pennsylvania turnpike and raise
taxes.
Republicans in the Pennsylvania House and Senate seem keen on the idea to
privatize the Pennsylvania Turnpike, but are not so supportive of tax increases. In the
House, John Perzel said in response to leasing the turnpike “that’s something that
absolutely has to be looked at in the environment that we’re in right now” (Capitolwire:
Transcript of House Speaker Perzel’s Speech, Q&A at PA Press Club). In the same
interview, Perzel raised the possibility that the state could lease the turnpike for $30
billion, which is higher than the $12 billion the Governor is asking for. Support for
privatizing the turnpike is not just limited to politicians in SEPTA’s coverage area, as
Representative Rick Geist, R-Altoona, lauded the idea as “a tremendous boost to the
economy and to transportation” (Leasing out turnpike could be 30B windfall). Also, in
late 2006, the Republican heads of the Senate and House Transportation Committees both
looked favorably at the idea of leasing the turnpike. However, when asked about raising
taxes to alleviate SEPTA’s crisis, John Perzel changes his tone sharply. The Philadelphia
Republican challenges the feasibility of bumping up taxes when he says “I don’t
understand why the locals would vote to tax themselves in order to pay for mass transit. I
don’t think that’s viable at all” (Capitolwire: Transcript of House Speaker Perzel’s
Speech, Q&A at PA Press Club). Also, the former Republican leader of the Senate
Transportation Committee seemed lukewarm toward the idea of higher taxes, saying
there “are still tremendous amounts of unknowns” (Rendell pitches plan to tax oil firms).
If Governor Rendell persists in his plan to tax oil companies, some Republicans in
Harrisburg fret that higher gas and home heating oil prices will follow (Rendell pitches
plan to tax oil firms). In general, Pennsylvania House and Senate Republicans believe
leasing the turnpike is a good way to pay for SEPTA, but raising taxes is pointless.
Regardless of support for leasing the turnpike and levying taxes on gas companies,
many Pennsylvania lawmakers stress that SEPTA needs a quicker bandage, but cannot
agree on what adhesive to use. This sentiment is echoed by members of both major
political parties. One Venango County Republican, Mary Jo White, said “the fixes we
have to do for the budget we have to do now” (Where Will State Find Transportation
Funds?). Some politicians have argued for state borrowing, but this concept has met with
stern opposition. Republicans, like Bucks County’s Tommy Tomlinson find borrowing to
be unacceptable (Where Will State Find Transportation Funds?). Ironically, many of
these same Republicans, along with quite a few Democrats, do not want to see additional
taxes levied on average Pennsylvanians within this year. Some have pressed for higher
sales or income taxes, as well as higher motor vehicle and driver licensing fees. An
influential Democrat, Gerald LaValle, sums up reaction to any tax increase to average
Pennsylvanians by saying “All are unpalatable tax increases that put lawmakers and the
governor into a political quandary” (Where Will State Find Transportation Funds?).
LaValle goes on to say that Democrats and Republicans alike will have a hard time
accepting any tax hikes (Where Will State Find Transportation Funds?). While concern
about the delayed timing of leasing the turnpike and charging taxes on oil company
profits are pervasive in both branches of Pennsylvania Congress, there is little agreement
on how to help SEPTA in the interim.
Candidates for mayor of Philadelphia, such as Michael Nutter, have their own
ideas about how to aid SEPTA. Michael Nutter’s plan for SEPTA revolves around a new
city agency called the Department of Transportation, which will have an appointed leader.
As this agency is not just slated for SEPTA, one of the goals will be to enhance
coordination between SEPTA and various bodies, including PATCO, the Philadelphia
School District, the Streets Department, and PennDOT (Nutter Releases His Better
Transportation Now Plan). With further regard to SEPTA, this plan calls for
“modernizing the governance of SEPTA to better represent City interests and resources”
(Nutter Releases His Better Transportation Now Plan). Interestingly, Nutter also wants to
increase federal funding for various Philadelphia transit bodies, including SEPTA. Many
analysts see this as being very hard to do. The mayoral aspirant also calls for intense
lobbying of Governor Rendell and Republicans and Democrats in both branches of
Pennsylvania Congress, as a means of upholding the recommendations set forth by the
Transportation Funding and Reform Commission. One of the more eye-catching
proposals by Nutter is to set up a Regional Mobility Commission, like the one San
Francisco has (Nutter Releases His Better Transportation Now Plan). For much of his
campaign, Nutter has been griping about how Philadelphia has only two members on the
15-member SEPTA Governing Board. The Philadelphia Democrat wants to see more of a
city voice to offer better representation of the city of Philadelphia. In addition, to
improved representation, Nutter desires to see increased cooperation between the city and
suburban counties (Next Great City Mayoral Forum). In his quest for Philadelphia’s
mayor’s office, Michael Nutter has formulated some duties for a new city Department of
Transportation.
Another Philadelphia mayoral candidate that has publicized a proposal to throw
city transit riders a life preserver is Chaka Fattah. In some respects Fattah’s plan is
similar to Michael Nutter’s proposal, while it differs in other areas. Like Nutter, Chaka
Fattah “strongly” supports the advice of the Transportation Funding and Reform
Commission, particularly when it calls for a tax on oil company profits (Moving Forward:
The Fattah Plan for Philadelphia Transportation). Fattah also concurs with Nutter that
Philadelphia needs a city agency to handle transportation, most notably SEPTA. Fattah
calls this office the “Office of Transportation” (Moving Forward: The Fattah Plan for
Philadelphia Transportation). Thirdly, Fattah stands with Nutter in a call to offer more
Philadelphia influence on the SEPTA Governing Board. For Chaka Fattah’s agreements
with Nutter, there are areas of difference. One of Fattah’s bolder ideas is to flex
Philadelphia’s leverage with both subway systems, and the West Philadelphia trolley
system. All three entities are leased from the city by SEPTA, but the leases expire on
December 31, 2007, which is after the next mayor assumes power. Fattah has shown a
willingness to play hardball with SEPTA during the upcoming lease negotiations, and
possibly abrogate SEPTA’s lease (Moving Forward: The Fattah Plan for Philadelphia
Transportation). Chaka Fattah’s proposal for relieving SEPTA’s financial strain includes
support for Governor Rendell, a new city transportation agency, and stiff bargaining with
SEPTA.
The other Democratic contenders for Philadelphia mayor, Bob Brady, Tom Knox,
and Dwight Evans, also have plans to assist SEPTA. Brady, Knox, and Evans all believe
the city needs a transportation office, as do Michael Nutter and Chaka Fattah. Also, the
three candidates want to see the city of Brotherly Love and Sisterly Affection have more
members on the SEPTA Governing Board. The three hopefuls also want “more dedicated
funding for the agency” (Transit Crisis Awaits a Mayor). Bob Brady gloats about his
long-held political connections, which he believes would be helpful in cajoling State
Legislators. Dwight Evans gives a similar spiel, by citing his 27 years in the legislature.
Specifically, Evans points to his amity with the top Democrat and top Republican on the
House Transportation Committee. Tom Knox emphasizes the cooperation he would offer
in working with Governor Rendell, which includes supporting the tax scheme on oil
company profits. Knox also proffers the possibility of using some city funds to clean up
SEPTA stations. Philadelphia mayoral aspirants, Bob Brady, Dwight Evans, and Tom
Knox bring their own ideas on how to mend SEPTA to the forefront.
With a budget deficit of $129 million, SEPTA faces some daunting financial
hurdles. SEPTA’s heart pains are compounded by a lack of consensus among State
Legislators, Governor Rendell, and the men who want to be the next mayor of
Philadelphia of how to better fund SEPTA and enable it to succeed. Governor Rendell
has introduced a plan to privatize the Pennsylvania Turnpike and levy taxes on oil
company profits, but the timing, wisdom, and efficacy of this plan have been doubted by
State Senators and Representatives. However, these same lawmakers are having a hard
time coming up with a more punctual alternative, especially one that does not raise taxes
on anybody. During this whole ordeal, Philadelphia’s Mayor Street has remained largely
silent on the matter, believing it is in the hands of the state government. However, the
candidates with a realistic chance of becoming Philadelphia’s next mayor have not stayed
silent. SEPTA’s waning financial life support is an issue that overtly ties into state
government, and even finds its way into city government, as Michael Nutter, Chaka
Fattah, Bob Brady, Dwight Evans, and Tom Knox have shown in their campaigns.
SEPTA’s funding problems is a complicated issue that warrants much thought, which is
great for that long SEPTA train ride. Let us just hope you are not preoccupied by the halfeaten doughnut beside you.