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Understanding SEPTA’s Statewide Economic Value

OVERVIEW

In 2007, the Economy League of Greater Philadelphia (Economy League) and Econsult teamed to evaluate the consequences on Southeastern Pennsylvania and the Commonwealth of underfunding SEPTA. Funding solutions were identified and acted upon, but circumstances have changed and once again in 2013, despite achieving its highest ridership levels in 23 years, SEPTA is confronted with a serious funding shortfall, especially for capital funding required to maintain and improve the system. Economy League and Econsult Solutions, Inc. (ESI) have reexamined SEPTA’s role in the Commonwealth’s economy and analyzed the value of expanded Commonwealth investment in SEPTA.

Summary

Bottom Line

The economic value of the Southeastern Pennsylvania Transportation Authority (SEPTA) is significant, both in terms of direct jobs and taxes paid to the Commonwealth of Pennsylvania for all transit-related spending, and regarding its catalytic effect on the overall economic output of the region and Commonwealth. By providing additional funding to support SEPTA and transit-related investments, state funds will ensure that:
• 40% of the state’s economic output stems from the five-county area and relies heavily on SEPTA service;
• 26,000 jobs in the Commonwealth continue to bring additional tax revenue of approximately $62.5 million to the Commonwealth of Pennsylvania annually; and
• SEPTA is generally underfunded and, despite punctual infusions of funds over the last seven years, has a significant backlog of capital needs preventing it from reaching a state of good repair (SGR).

PROJECT GOALS

The report has three main goals:

  1. Understand the economic value of SEPTA, in terms of economic and fiscal impacts in the Commonwealth of Pennsylvania;
  2. Determine how SEPTA compares to other transit agencies in terms of performance, scope, and revenue sources; and
  3. Provide updated nonpartisan information to state lawmakers and other interested parties as the decision to fund SEPTA is debated.

Analysis

For the purpose of this report, the Economy League and ESI conducted five sets of analyses to answer the following questions:

  1. To what extent do the five counties of southeastern Pennsylvania (Bucks, Chester, Delaware, Montgomery, and Philadelphia) contribute to Pennsylvania’s transportation-related revenues, and are the beneficiary of transportation-related expenditures?
  2. To what extent has SEPTA been a good steward of public funds?
  3. To what extent does the performance of SEPTA operations compare to Commonwealth agencies and industry peers?
  4. What are the economic and fiscal impacts of SEPTA on the five-county region and Commonwealth?
  5. What are the possible long-term consequences of inadequate, status quo funding levels on the five-county region and Commonwealth?


> Full Report