SEPTA had ‘better-than-expected financial performance’ this year
Moody's Ratings found SEPTA's financial outlook stable for the near term, but noted continued uncertainty about state transit funding remains a concern.
Moody’s Ratings has upgraded SEPTA’s outlook to stable from negative, one year after the transit authority was cutting service to help close a budget deficit and paying for emergency safety inspections and repairs for 223 decades-old Regional Rail cars.
The revised outlook “reflects SEPTA’s better-than-expected financial performance” in fiscal 2026 that leaves it with enough liquidity to pay the bills while continuing to try to solve a structural budget gap, Moody’s said in an Aug. 28 statement.
“Our hope is that this external validation supports the message we want to send to our stakeholders in Harrisburg, that SEPTA is a sound investment, and that we are good stewards of taxpayer dollars,” Assistant Treasurer Michael Kendall said in an interview.
At this time last year, Harrisburg lawmakers and the Shapiro administration had failed for the third straight year to agree on a steady source of new state funding for SEPTA and other transit agencies. Moody’s also downgraded the authority’s fiscal outlook to negative.
In early September 2025, PennDot redirected $394 million in state capital assistance funds to help cover two years of operating expenses. Later, Gov. Josh Shapiro sent an additional $219.9 million for safety and urgent repairs on both the Regional Rail cars and the trolley tunnel in Center City.
SEPTA managers pivoted to an increased focus on controlling costs, finding new revenue from advertising, parking and real estate, and service improvements, Kendall said.
The transit agency says it has found about $30 million in annual savings, as well as increased income from advertising, parking, and real estate. Ridership remained steady and spiked during the summer’s World Cup games, celebrations of America’s 250th birthday and the Major League Baseball All-Star Game.
Overall, SEPTA says its structural budget deficit dropped from $213 million a year to $192 million.
The credit rating for authority bonds remains good, as they are backed by reliable federal and state income streams, not passenger revenue, which can fluctuate.
SEPTA has a $501 million bond for asset improvement and a $42 million bond in the Public Transportation Assistance Fund. Moody’s gave both one of its highest ratings, Aa3. Moody’s also affirmed the A3 ratings on the authority’s $138 million in bonds issued against federal capital grants it has been awarded.
Still, Moody’s warned, “over the long-term, SEPTA’s sizable structural budget gap will be difficult to resolve without further financial support from the Commonwealth or significant adjustments to operations.”
