SEPTA officials put almost 40 improvement projects on hold this month as it awaits the outcome of a lawsuit that could slash a third of its capital budget by this summer.
Construction that is underway is continuing, but design work on 21 projects has stopped. Those stalled include high-profile work such as the $1 billion plan to modernize the trolley network with new vehicles, a $59 million renovation of the transit hub beneath City Hall, and work on stations at Secane, Noble, Tasker-Morris, and Villanova. Purchasing for 16 other projects has also stopped.
The total value of the work put on hold is likely more than $100 million, said Rich Burnfield, SEPTA’s treasurer and deputy general manager. In the near term, these delays shouldn’t affect safety, SEPTA officials said. If the suit is successful, though, it could seriously hinder the agency’s ability to cover needed maintenance in the coming years.
Some project design will continue to complete the phase the project is in but then won’t progress to the next stage of development. SEPTA officials described the stops as a pause and said projects would resume if the lawsuit were resolved favorably for the transit agency.
“The deeper that you get into the fiscal year, more projects will be starting,” Burnfield said. “Given this uncertainty, we needed to put some projects on pause.”
In March, a truckers’ trade association and a drivers’ advocacy group filed a federal lawsuit arguing that turnpike tolls are at least 200 percent more expensive than they should be. The suit also contends that using toll revenue to fund transit violates the U.S. Constitution’s commerce clause, which regulates interstate commerce. It claims that toll money should go only toward maintaining the turnpike system and that Pennsylvania was wrong to allocate toll revenue for transit with laws passed in 2007 and 2013. The high tolls interfere with interstate trade, the suit argues.
“Pennsylvania has not been given authority by Congress to do what it’s doing,” said Paul Cullen Sr., a Washington attorney representing the plaintiffs.
Tolls on the turnpike increased by 6 percent in January and have gone up every year since 2009.
Named in the suit are the Pennsylvania Turnpike Commission, Transportation Secretary Leslie Richards, the governor, and members of the Turnpike Commission’s board.
A motion filed by the Turnpike Commission in May disagrees with the conclusions about the authority of the state to use toll money beyond the turnpike. The commission also argues that there is no evidence that the tolls are so high they are unfairly burdening interstate commerce.
The Turnpike Commission makes annual payments to PennDot of about $450 million each year, and SEPTA receives more than 75 percent of that. For the first three quarters of this fiscal year, the turnpike has not made any of its $112.5 million payments to PennDot because of the lawsuit. The suit prevented the agency from raising the bonds needed to make the payments to the state, turnpike officials said.
As a result, SEPTA already has faced a $63 million hit to its $750 million capital budget, Burnfield said. The shortfall hasn’t been worse, he said, because the state has shifted funding to cushion the loss of the money from the turnpike. If the suit isn’t resolved by the beginning of the new fiscal year in July, PennDot will not be able to make up the difference.
If the suit is decided in favor of the turnpike, payments that have not been made this year will be made up, said Mark Compton, the Turnpike Commission’s chief executive. If the lawsuit succeeds, though, money from the turnpike to the state’s public transit systems would dry up. SEPTA’s capital budget could shrink to about $500 million.
“You’re looking at a very, very significant impact on our capital program,” Burnfield said. “You would be down to some very core projects.”
The suit does not affect funding for improvements or maintenance on the turnpike itself, Compton said.
In the last five years SEPTA has reduced its “state of good repair” backlog from $5 billion to $4.6 billion thanks in part to state funding and has moved beyond simple maintenance to pursue modernization and expansion projects. Without the stream of turnpike funding, Burnfield said, the transit agency would likely not only stop expanding, but would fall behind maintenance work.
The Pennsylvania Turnpike Commission filed a motion for dismissal or summary judgment in May. The plaintiffs — Owner-Operator Independent Drivers Association Inc. and the National Motorists Association — have filed a motion for summary judgment of liability with U.S. District Judge Yvette Kane. Neither side knows when a ruling on those motions will come.