HARRISBURG — Pennsylvania’s Senate on Tuesday advanced a $47.6 billion state budget for 2025-26 that holds spending flat, as well as a two-year, $1.2 billion transportation plan opposed by Democrats to fund mass transit operations and repairs to rural roads.
The transportation measure would draw from money designated for ongoing and planned transit capital projects in the Public Transportation Trust Fund — as well as revenue from taxing interactive gaming.
After initially bashing the Senate’s proposal, saying it “creates new problems,” SEPTA General Manager Scott Sauer later said he needed more clarification about funding sources and expected “to remain in close contact with all parties in this negotiation as we continue to await a solution that will provide adequate sustainable funding for SEPTA’s future.” Sauer’s change in posture came following “further discussions with Senate Republican staff,” he said.
Sauer later on Tuesday evening repositioned himself again, and said the Senate’s mass transit funding bill “still appears to be a flex of sorely needed capital dollars to operating funds.”
Sauer said he and his staff are talking with leaders to try to understand what the ultimate impact of the Senate bill would be on current capital projects, as well as SEPTA’s future share of the capital funding.
“We’re all trying to get our arms around this,” Sauer said.
The transit agency, which carries about 700,000 passengers a day in the state’s most populous region, is preparing for deep service cuts because, it says, the legislature and governor have not agreed on long-term funding for transit. It faces a $213 million operating deficit.
Last week, SEPTA announced that state funding was needed by Aug. 14 or a first round of cuts would be enacted.
Flat funding moves forward
Senate GOP leaders said the body decided to pass a flat-funding spending package for the 2025-26 fiscal year so money for schools, counties and other government-subsidized services is not withheld while a larger budget deal is reached.
It’s unclear if the proposed flat funding will allow the state to meet its constitutional requirements for public education and human services. If the Senate’s measure is approved by the Democratic-controlled House, it will allow the money to flow to counties and schools now while top lawmakers continue to meet behind closed doors to negotiate a final state budget deal.
However, it was also unclear Tuesday evening when — or if — the House planned to return to Harrisburg to consider the Senate’s spending plan and mass transit funding bill.
Both the mass transit funding bill, House Bill 257, and the full budget spending bill, Senate Bill 160, passed the Senate along party lines, 27-22.
» READ MORE: SEPTA service cuts will happen if state money isn’t secured by Aug. 14
Using the Public Transportation Trust Fund
Gov. Josh Shapiro and House Majority Leader Matt Bradford (D., Montgomery) both said they oppose the transportation bill.
Bradford also said that he opposed the Senate’s overall spending plan. Shapiro did not comment on it.
» READ MORE: Not just SEPTA: Public transit is in trouble all across Pennsylvania, including in GOP districts
But in the Senate Tuesday, Democrats and Republicans were unwavering in their conflicting positions on what the impact of using the Public Transportation Trust Fund — a special fund set up by Act 44 of 2007 with more than $2.2 billion in sales tax revenue set aside for capital projects — would have on the state’s mass transit.
Senate Republicans, in remarks on the floor, said the fund offers a short-term solution with more than a billion dollars in unallocated funds that will not hurt any planned capital projects.
For Senate Democrats, however, the measure was seen as an effort that would amount to a funding cut for mass transit agencies to be able to make critical safety updates. Some members also saw the addition of funding for roads and bridges in the Senate bill as taking away from mass transit funds set aside for emergencies.
PennDOT did not respond to requests this week for documentation of the amount set aside for existing capital projects.
SEPTA has not said whether the state Senate’s action, if approved by the House, would stall the planned cuts and fare increase that are scheduled to go into effect beginning Aug. 24, just one day before the start of the school year for Philadelphia public schools.
Manuel Bonder, a spokesperson for the governor, said Shapiro, a Democrat, “appreciates Senate Republicans finally acknowledging the need to fund mass transit systems across the Commonwealth,” but that it doesn’t do enough.
“This is clearly not a serious, long-term proposal that can pass both chambers,” Bonder added. “It’s time to get back to the table and keep working at it.”
An impasse likely to continue
Shapiro and House leaders have insisted on $1.5 billion in new funding for SEPTA and other transit systems from sales-tax revenue, a measure that has not found support with the Senate’s GOP majority.
The Senate’s budget proposal also falls significantly short of Shapiro’s $51.5 billion budget pitch and the House’s $50.6 billion spending plan, which passed last month, but the Senate declined to vote on. That gap — and discrepancies over funding SEPTA and other Pennsylvania mass transit agencies — likely means that the state’s seven-week budget impasse will continue.
Senate Majority Leader Joe Pittman (R., Indiana) said in an interview Tuesday evening that the Senate’s mass transit funding plan “checks all the boxes” to set aside funding for roads and bridge repairs, and money for mass transit, while not deepening the state’s deficit. Pennsylvania is on track to bring in $5.5 billion less than it spends this fiscal year. Shapiro and other Democratic leaders have pitched tapping into the state’s $7.3 billion Rainy Day Fund and $3 billion budget surplus, at least partially, but Republicans have cautioned against it.
“I recognize this is a two-year plan, but let’s face it, the next two years in southeastern Pennsylvania are extraordinarily critical, and we recognize that,” Pittman added, referencing the many international events scheduled in the Philadelphia region in 2026. “We thought this was a smart way to get these dollars out the door.”
Sen. Vince Hughes (D., Philadelphia), the minority chair of the Senate Appropriations Committee, said he had major concerns about the Senate’s transit funding plan and state budget spending bill. Under the plan, Hughes said he was concerned that transit agencies would be required to increase fares every year based on inflation indicators, unless they get a waiver from PennDOT. And he said he worried about what the spending bill means for Pennsylvania’s new education funding system— an issue he has championed.
By keeping education funding flat rather than continuing to dole out money under the new formulas, Hughes said, the state goes back on its court-required promise to adequately and equitably fund public education.
“To come out of the gate with a first year that was very positive, and school districts are seeing great results, and then to miss the mark so blatantly in Year Two with this proposal, it’s just very disappointing,” he added.
More than funding
In addition to required yearly fare increases for transit agencies, the Senate transportation bill would classify as a first-degree felony assault or attempted assault of a transit operator causing death or bodily harm to the operator or another person, legislation which was authored by Sens. Joe Picozzi (R., Philadelphia) and Frank Farry (R., Bucks). It would be punishable by 20 years in prison.
The mass transit funding measure also would extend the authority of the state special prosecutor for crimes on SEPTA through Dec. 31, 2035. Republican lawmakers wanted to establish the position initially because they believed Philadelphia District Attorney Larry Krasner was not proactive enough on transit crime.
Shapiro in 2023 signed legislation establishing the special prosecutor position, which was initially supposed to expire at the end of 2026.
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