Gov.. Josh Shapiro replies to a reporter's question about the effects of the 'Big Beautiful Bill' on Medicaid and SNAP in Pennsylvania during a press conference at WellSpan Health’s Jersey College School of Nursing in York July 7, 2025.
In a decisive intervention, Governor Josh Shapiro has directed the Pennsylvania Department of Transportation to allow the Southeastern Pennsylvania Transportation Authority (SEPTA) to repurpose up to $394 million in uncommitted capital assistance funds to maintain transit operations for the next two years.
Originating from the fiscal year 2025–26 budget, these funds were intended for infrastructure projects but will now shore up essential services amid a steep $200–$213 million budget shortfall.
This emergency measure comes on the heels of a court ruling requiring SEPTA to reverse abrupt service reductions rolled out last month - deemed among the most drastic cuts by a major U.S. transit agency. City buses, trolleys, and rail services, scaled back by 20%, drew widespread criticism and were seen as disproportionately affecting low-income and minority communities. The reprioritization of capital funds ensures SEPTA can comply with the court’s directive to restore full service by September 14.
Despite this lifeline, SEPTA will proceed with a 21.5% fare increase effective September 14 - raising revenue by an estimated $31 million annually.
SEPTA General Manager Scott Sauer acknowledged this is merely a temporary fix that postpones deeper structural reforms. The larger, sustainable solution remains elusive amid rising operational costs, ridership recovery struggles following the pandemic, and a political stalemate in the state Senate over dedicated transit funding.
Governor Shapiro criticized Senate Republicans for failing to pass a long-term transit funding solution that wouldn’t deplete capital reserves, noting such policies threaten mobile infrastructure and compromise safety.
Shapiro’s administration had previously fought to inject new recurring funding - $292 million proposed in the 2025-26 budget - along with $80 million in bipartisan support and $153 million flexed federal highway dollars to avert immediate service disruptions.
Commuter advocates, public officials, and regional planners have warned that continued uncertainty could undercut Philadelphia’s economic vitality and future infrastructure needs - especially with major events on the horizon, including the 250th anniversary in 2026, the FIFA World Cup, and the MLB All-Star Game.
SEPTA had already suspended or postponed dozens of capital projects - costing billions in long-term repairs and expansions - to manage its fiscal crisis.
While the capital flex arrangement delivers immediate relief, experts caution that without policy reform and new revenue streams, the underlying vulnerabilities - declining ridership, aging infrastructure, and insufficient state support - will persist. SEPTA’s crisis is emblematic of a broader national pattern affecting transit systems across the country.
