SEPTA Board Approves FY 2007 Operating and Capital Budgets

June 22, 2006

PHILADELPHIA, PA -- During its regular monthly meeting the SEPTA Board today approved the FY 2007 Operating and Capital Budgets for the transit Authority.

The FY 2007 Operating Budget includes an expense budget of $991 million, an increase of $39.2 million or about 4% compared to the FY 2006 Operating Budget. The increase reflects cost escalations in the areas of wages, diesel fuel, materials and services, healthcare and prescription drugs.Most other expenses remain essentially at FY 2006 levels.

In order to fund the increase included in the budget SEPTA remains committed to working with Governor Rendell, members of the General Assembly, and the Governor's Transportation Funding and Reform Commission.In February 2005, Governor Rendell announced a plan to flex federal transportation funds to public transit agencies throughout the Commonwealth.The Governor's plan addressed operating budget shortfalls for the balance of Fiscal Year 2005, all of Fiscal Year 2006, and the first six months of Fiscal Year 2007.

With the addition of the flex funds SEPTA's initial FY 2007 budget shortfall was $72.4 million.As a result of a number of budget reducing actions undertaken by the Authority and the anticipated receipt of an additional $5.4 million in state and local operating subsidies provided in the Governor's FY 2007 budget, the shortfall has been reduced by $22.1 million and is currently projected to total $50.3 million.

Even with SEPTA's budget reducing efforts, the remaining budget shortfall and the chronic underfunding of transit are significant fiscal challenges that SEPTA and other Commonwealth transit providers struggle to resolve.SEPTA believes that the only reasonable solution to the statewide transportation funding crisis is the approval of a long-term subsidy source with growth potential.

Absent a solution, SEPTA will face the challenge of balancing the Operating Budget with the expected $50.3 million shortfall after the flex funding solution runs out in December 2006.

The FY 2007 Capital Budget will provide $438 million for a wide range of capital improvements including a number of significant new and ongoing capital projects.

Projects included in the Capital Budget are the Market Street Elevated Reconstruction Project, Regional Rail Route R5 Paoli Line improvements, a continuing bus purchase program, a rail stations and parking improvement program, the rehabilitation of Girard and Spring Garden Stations on the Broad Street Line and the acquisition of new Silverliner V regional rail cars.