Heading into the second pandemic year, SEPTA on Friday proposed a $1.5 billion operating budget that relies on an infusion of relief money from Washington, squeezes expenses with a temporary hiring freeze and other cuts, and again delays a planned fare increase at least until July 2022.

“We do feel like we’re on the clock here, and there is a limited amount of time for us to make sure that SEPTA gets on a sustainable path,” General Manager Leslie S. Richards said in an interview.

Officials plan to increase the frequency of service gradually in anticipation that ridership will grow as more people in the Philadelphia region get vaccinated against coronavirus — to 96% of pre-pandemic levels on transit: buses, subways, trolleys, and the Norristown High Speed Line. For Regional Rail commuter lines, the goal is to offer 80% of the pre-pandemic service on the commuter lines by fall.

Currently, the transit services are running at about 85% of pre-pandemic capacity, and Regional Rail service at about 54% of levels before COVID-19 slowdowns, Richards said.

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Ridership on buses, subways, and trolleys is 35-40% of what it was before the pandemic, while Regional Rail ridership is about 15% of what it was, she said.

SEPTA planners expect to increase service on city transit when schools and universities open again to in-person learning in September. Regional Rail service will also increase in the fall.

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The union representing Regional Rail locomotive engineers believes that’s a mistake, framing the decision to keep a modified schedule a missed opportunity to carry more customers for the city’s hospitality industry and other attractions.

“It’s a death spiral. If you offer one-hour service [between trains], ridership falls, if you offer two-hour service, it falls more, and so on,” said Roger Eldridge, legislative representative for the Brotherhood of Locomotive Engineers and Trainmen, Division 71.

Overall, 80% of the authority’s budgeted income for fiscal 2022, or $1.2 billion, comes from state, local, and federal governments, including $368 million in U.S. COVID-19 relief. Contributions from those government sources covered 65% of expenses in the fiscal year 2020-21, the first pandemic budget.

By the end of March, the transit agency had spent $420 million from the first COVID-19 relief package, the CARES Act, and it will use $252 million from the second to compensate for the decline in passenger revenue for the next several months, said Rich Burnfield, deputy general manager and treasurer.

He said SEPTA expects about $800 million from President Joe Biden’s recently enacted plan will be used to bolster the operating budgets for the fiscal year beginning in 2023.

“We do see that the [federal] dollars will run out before all of our ridership returns, so we know that we have to examine every piece of our operation to make sure that we provide for a long-term future,” Burnfield said.

SEPTA plans to release its proposed capital budget next week, detailing next fiscal year’s spending on infrastructure repairs and significant projects. Many public transit advocates will be looking for signs about the future of trolley modernization, which suffered a setback last month when Amazon bought a site in Eastwick that SEPTA was pursuing as an ideal spot for a facility to service and store the larger trolleys it plans to acquire to replace a Reagan-era fleet.

Amazon intends to build a “last mile” warehouse for light delivery trucks on the Elmwood Avenue lot, which is served by trolley tracks.

“This is a choice between mobility justice, union jobs and green community or a traffic-inducing nightmare,” Steph Drain, a community organizer in Southwest Philadelphia, told the SEPTA board at its meeting Thursday.

“We would much rather have a green future supported by trolleys and the jobs they create, not thousands of Prime delivery vehicles on our commercial corridor,” he said.

The operating and capital budgets will run from July 1 through June 30, 2022. Virtual public hearings on the operating budget are scheduled for May 24 and 25, and for the capital budget on May 26. The agency’s board is scheduled to act on the budgets in June.

Despite the focus on cutting costs, SEPTA is hoping to make some investments, including hiring up to 200 new workers to clean stations and vehicles, because customer surveys have consistently found that cleanliness is a top concern. The agency expects to finish the fiscal year in June 2022 with 300 fewer employees overall, however, by not filling vacancies as they come up. There will be no layoffs, Richards said.

SEPTA has some big challenges ahead, in addition to recovering from the pandemic.

Next year it is scheduled to lose a $450 million annual required payment from the Pennsylvania Turnpike as its chief state funding stream shifts to proceeds from the sales tax on vehicle sales — as long as the legislature doesn’t use all or some of that money, about $400 million, for something else.

And on Oct. 31, the contract with the agency’s largest union, Transit Workers Local 234, expires.