SEPTA's $1.23 billion operating budget for the fiscal year that begins July 1 is likely to be approved by the board next week, following review Thursday by a committee.
The full board is to meet Thursday to consider the operating budget, which pays for SEPTA's day-to-day expenses, and the agency's proposed $311.5 million capital budget, which pays for such things as new vehicles and construction projects.
The operating budget, which is about 3.9 percent higher than this year's $1.18 billion budget, envisions no fare increases or service cuts. Fares went up last July, and they are not slated to rise again until July 2013.
Although SEPTA expects a 4.5 percent increase in bus, rail, and subway ridership to boost passenger revenues about $19 million, that won't be enough to keep up with rising costs, especially for employee benefits and diesel fuel. Operating costs are expected to rise about $46 million, SEPTA budget officials told the board's budget, planning, and information technology committee Thursday.
Passenger fares will pay about 35 percent of SEPTA's total operating costs next year. Most of the rest will come from state ($576 million), local ($82 million), and federal ($82 million) subsidies.
The operating budget assumes an increase of about 6 percent in fringe benefits such as medical insurance and pension contributions. Wages for SEPTA's union workers are to increase 2.5 percent. Wages and benefits, the biggest cost of running SEPTA, will cost the authority $865 million next year, up about 4 percent from the current $832 million.
Costs for diesel fuel are expected to rise more than 7 percent. SEPTA has fuel contracts that maintain the price at $2.20 a gallon through December.
The agency's capital budget of $311.5 million, for spending on such things as buses, railcars, stations, and signal systems, is about $8 million, or 2.6 percent, higher than the current capital budget of $303.7 million.
The funding is about 25 percent lower than two years ago because state transit funding was cut last year when federal transportation officials rejected Pennsylvania's bid to put tolls on I-80. That has pushed many of SEPTA's big-ticket plans to the back burner, with 20 projects deferred.
Those postponed projects include the $100 million remake of the dilapidated City Hall subway concourse, new transportation centers in Ardmore and Paoli, and replacement of antiquated power substations for the Regional Rail network.
The biggest expense in the new capital budget is $59 million for new buses as SEPTA continues to update the fleet that carries the bulk of its passengers. Over the next four years, the agency plans to buy 155 60-foot articulated buses and 90 40-foot buses. Unlike the 472 hybrid buses bought over the last four years, the new buses will be diesel-powered unless federal money is available to buy hybrids, which cost about 20 percent more.
To overhaul existing buses, trolleys, subway cars, and railcars, SEPTA plans to spend $53 million.
The agency also expects to spend about $53 million for debt service, the biggest increase in the capital budget, up $16 million, or 44 percent, from the current $36 million. The increase is due largely to $252 million that SEPTA plans to borrow this year to help pay for 120 new Silverliner V railcars and to overhaul the 110-year-old Wayne Junction rail station.
The new budget also includes $36 million for modernizing the signal system on the rail network and $34 million for improvements at rail and subway stations.
An expense that is not in the new budget but that is looming over SEPTA planners is $750 million for railcars to replace the Silverliner IV cars that constitute the majority of the Regional Rail fleet. Those 230 cars, which date from 1974, are to begin being replaced in five or six years.