Philadelphia’s mass transit system is at the edge of the fiscal cliff, with huge fare hikes and service cuts on the table. The crisis has prompted Pennsylvania officials to seek permission from the federal government to divert part of the state’s federal highway aid to the transit system as a stop-gap measure.

The board of the Southeastern Pennsylvania Transportation Authority voted recently to hike fares by 50% and cut service 20% to close a big budget gap. A huge reduction in the value of transit travel like this would likely send ridership, revenues and system conditions into a downward spiral that would be difficult to arrest.

Unlike in New York City, however, the Philadelphia mayor is able to veto SEPTA votes. However, the board will meet again this week and may override the city’s veto unless Governor Rendell and U.S. DOT are able to cobble a budget together in the next several days.

State studies seeking to unveil waste at the agency found instead that chronic underfunding by state government was leading the system into a crisis.

Because of the cold water that Albany officials have poured on the MTA’s tax proposal for funding its programs (see story at right), and with yawning budget gaps ahead even if the MTA raises fares in 2005, it’s not difficult to imagine a similar crisis point being reached in NY. Indeed, MTA Chairman Kalikow’s letter to state and city leaders proposing tax increases to fund capital improvements suggests that 2005 could become the historical starting point for a "Second Great Decline" of NY’s transit system unless a major infusion of new revenue occurs. It draws a bleak picture of the minimum program the agency would have to pursue if the revenue effort fails, abandoning expansion plans and some station projects and rolling stock purchases.

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