Pennsylvania’s state budget for fiscal year 2025–26 was due on June 30, yet months later, lawmakers remain deadlocked, while state agencies and programs are left in limbo, creating uncertainty for schools, health care providers, and community organizations. What's all the fuss really about? The answer lies in one central issue—how to fund the state’s mass transit systems, particularly Philadelphia’s SEPTA and Pittsburgh Regional Transit (PRT). These agencies move millions of passengers and connect workers to jobs, yet their funding has become a flashpoint in broader budget negotiations.

SEPTA, the state’s largest transit agency, depends heavily on state support through the Public Transportation Trust Fund (PTTF), established under Act 44 of 2007. The fund provides reliable, recurring funding for both operating costs and capital projects. It draws revenue from a portion of the state sales and use tax, vehicle sales tax, and Pennsylvania Turnpike tolls. Last year, mass transit agencies received $2.4 billion in state funding. Roads and bridges are funded separately through the Motor License Fund and federal transportation dollars.

Despite decades of state support, SEPTA’s ridership is only 72% of pre-pandemic levels, yet since 2007, state subsidies to SEPTA have increased 169%, now funding two-thirds of its annual budget (9.5% comes from local subsidies, 3.4% from federal subsidies, and 16.1% from passenger revenue). This raises questions for skeptics who hesitate to commit to funding increases without meaningful reforms to improve efficiency and accountability.

In February, Governor Josh Shapiro unveiled a $51.5 billion budget proposal, the largest in Pennsylvania’s history, including a proposal to increase the share of the state sales tax dedicated to the PTTF from 4.4 percent to roughly 6.15 percent, generating roughly $292.5 million in additional funding annually. SEPTA would again be the primary beneficiary. Shapiro also proposed new revenue streams, including legalized recreational marijuana and taxation of skill games, to help balance the state budget. While these measures increase the revenue pool, critics argue that simply injecting more money into a system already heavily subsidized does not address structural inefficiencies or declining ridership.

SEPTA has warned of a $213 million operating shortfall, which, if unaddressed, could result in service reductions of 45 percent and fare increases of 21.5 percent. The system has already implemented a 20% service cut, eliminating and shortening bus routes and metro rail services. Critics point out that the agency currently holds nearly $400 million in reserves and has access to lines of credit that remain untapped. Some argue that service cuts are designed to pressure lawmakers into approving additional funding, rather than reflecting unavoidable financial collapse.

The legislative response has been mixed. The PA House largely supported Shapiro’s plan, passing a budget that would codify the sales tax increase and provide long-term transit funding stability. The Senate rejected this approach, instead proposing a temporary solution that would divert $419 million from SEPTA’s capital reserves to cover operating costs for the year and direct an equal amount to fund road and bridge projects. While this might prevent immediate service cuts, it raised concerns about delaying or undermining future infrastructure projects. Governor Shapiro has indicated he would accept temporary relief if paired with a long-term solutions, but he remains opposed to diverting PTTF funds from their intended purpose.

For PMTA members, the budget debate is not just about transit versus roads. Reliable public transit impacts workforce mobility, congestion, and freight operations, but transportation funding in Pennsylvania is a balance of priorities and the responsible allocation of scare taxpayer resources. Additional funds should not be committed to transit without a sound discussion of operational reforms and a clear demonstration of need. This is especially true because it's not just cars and trucks, but also transit buses, that rely on well-maintained highways and bridges for their daily operations.

The budget standoff ultimately comes down to a choice: should Pennsylvania continue to commit to transit funding increases without meaningful reforms, or should lawmakers prioritize accountability and efficiency while addressing temporary funding needs? Governor Shapiro and the House advocate for permanent increases paired with new revenue streams, while the Senate favors short-term solutions and urges caution before committing more public dollars. SEPTA and PRT need predictability to maintain service and invest in infrastructure, but the debate highlights the agency’s heavy reliance on subsidies, declining ridership, and the skepticism of stakeholders.

Until lawmakers reach an agreement, transit agencies remain in limbo, commuters face uncertainty, and Pennsylvania’s transportation network waits for clarity. For PMTA members, understanding the financial realities of SEPTA, the sources and restrictions of the PTTF, and the competing legislative proposals is critical to understanding what's at stake in the budget standoff.