SEPTA/$70M Budget Deficit Predicted for FY'05 Options

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From SEPTA's website:

PHILADELPHIA, PA (January 22, 2004) -- SEPTA announced today that it is
currently projecting a deficit of approximately $70 million in its Fiscal
Year 2005 Operating Budget (SEPTA's Fiscal Year runs from June 1 to July
31).  The projection is based on escalating costs for healthcare (medical
and prescriptions), pensions, ADA Paratransit costs and other operating
expenses while operating revenues and subsidies have remained essentially
flat.

"Passage of the FY 2004 PA state budget returned SEPTA to where we were
last January," said SEPTA Board Chair Pasquale T. Deon, Sr.  "However, as
we indicated before, we are facing a deficit going into the next budget
year."

"While we were able to balance our operating budget last year without
implementing the severe service cuts and fare changes that were initially
considered, without greater financial support in both the near and long
term, our ability to provide present transit services will again be
jeopardized," said Deon.  "We are continuing to work diligently with state
government to address the fundamental issue of providing a long term and
predictable source of subsidies for SEPTA and transit agencies statewide."

In the past eight years, SEPTA has maintained a balanced budget through a
series of aggressive actions including reducing personnel, reducing
expenses and implementing a fare increase.  In addition, measures taken to
reduce the SEPTA FY 2004 Operating Budget included reductions in cost of
materials and services, a more stringent review of internal and external
claims, service changes, and an increase in parking lot fees from $.50 to
$1.00. 

State operating subsidies have increased in only two of the past nine
years. As mandated by state law, the SEPTA Board has to adopt a balanced
budget prior to July 1, 2004.

Since Fiscal Year 1998 SEPTA has seen substantial expense growth in:
Healthcare, prescriptions, dental and life 

FY 98    $56.9
FY 03    $89.0
FY 04 Budget  $102.7 80.5% Increase from 1998

Pension

FY 98    $27.8
FY 03    $42.8
FY 04    $49.4  77.7% Increase from 1998


ADA Paratransit

FY 98    $13.5
FY 03    $20.7
FY 04    $20.7  53.3% Increase from 1998