SEPTA is broke – and the transit agency's financial woes could have deep economic implications for the entire region, according to a study released Monday by the Economy League of Greater Philadelphia and Econsult Solutions.
"Understanding SEPTA's Statewide Economic Value" states SEPTA is facing "a growing crisis of capital need."
The report concludes without "an infusion of capital funding," SEPTA won't be able to sustain its current levels of service and will be forced to truncate its system.
That could cost the region nearly 25,000 jobs, $96 million in tax revenue, $8 billion in property value and an untold amount in total economic impact, as service to Philadelphia's vital downtown hub is cut and "residents and businesses generate less revenue and locate elsewhere," the study reads.
"As the legislature considers transportation-funding proposals, the information in this report provides context and comparisons to other systems that demonstrate SEPTA's importance to our region," Economy League executive director Steve Wray said in a statement.
The report notes that while ridership is at a 23-year high, SEPTA's capital budget is at a 15-year low despite a growing backlog of capital needs totaling $4.7 billion.
SEPTA is attempting to balance between maintenance – some of its infrastructure is more than 100 years old – and upgrading to new technologies.
But the report estimates the agency needs an additional $452 million annually in additional capital funding just to work off its repair backlog – and that's without accounting for any expansion projects.
If unaddressed, the backlog will lead to the elimination of 40 percent of SEPTA's system, causing a "mass migration" from transit-oriented communities that could cost Philadelphia an additional loss of 60,000 jobs, $289 million in annual tax revenue and more than $14 billion in property value, the study projects.
"This analysis shows how important it is to the regional economy and the Commonwealth as a whole to fund SEPTA adequately," Econsult Solutions president Richard Voith said in a statement.
SEPTA's $304 million capital budget is lower than that of transit agencies in comparable cities – the 2013 capital budget for Boston's MBTA is $800 million and that of New Jersey Transit is $1.16 billion.
Were SEPTA's funding on par with that of the MBTA, SEPTA would be able to completely eliminate its repair backlog in 20 years, according to the report.
In fact, SEPTA receives far less money from the state than most transit agencies and is more dependent on federal funding than any other transit system in its peer group, relying on federal monies for 60 percent of its annual capital budget.
The comparative underfunding comes in spite of the fact SEPTA's fare recovery ratios are comparable to peer transit agencies and, on average, higher than those of other transit systems in the state.
"SEPTA has proven to be an exemplary steward of public funds and continues to be a wise investment for the Commonwealth," Voith said.