Pittsburgh Regional Transit pushes for $117 million increase in state subsidy

Pittsburgh Regional Transit is pushing state officials for a $117 million annual increase in funding beginning this year and says it will have to begin “devasting” service cuts, fare increases and layoffs next year if it is unsuccessful.

That’s an increase of more than 33% from the current state subsidy of about $290 million.

CEO Katharine Eagan Kelleman briefed the agency’s board of directors about the severity of its financial situation Friday morning. The impending crisis shouldn’t be a surprise because the agency has warned that there would be serious consequences if the state didn’t pass a new transportation funding bill, and the agency used $58 million of its reserve funds to balance the current budget.

“It’s a scary number, $117 million,” Kelleman told the board. “Our county and region deserve it, and our riders, too.”

Kelleman has made numerous trips to Harrisburg in the past year trying to explain the funding crunch that will occur as the agency finishes spending several hundred million it received in emergency federal funds during the COVID-19 pandemic. The federal Department of Transportation issued the funds to transit agencies across the country to keep them running despite severe ridership drops during the peak of the health emergency.

Kelleman was in the state capital earlier this week meeting with Gov. Josh Shapiro’s staff and legislators to outline the agency’s needs. Last year, the governor called for the first increase in transit funds in more than a decade — $282.2 million a year for five years across the state, including $39 million more a year for PRT.

After a protracted budget battle last summer, Shapiro and legislative leaders agreed to a one-time transit increase of $80.5 million with the promise of approving a long-term plan later in the year.

The House approved a long-term funding plan, but Senate Republicans never brought the bill to a vote. They say their members in rural areas have a hard time voting for transit funding when about 87% of the funds go to PRT and the Southeastern Pennsylvania Transportation Authority that serves the Philadelphia area.

Kelleman and others have stressed that this is a statewide problem that affects every transportation agency. Although other counties might not have bus or commuter train service, they have specialty service such as Access to provide transportation to elderly or disabled residents who need it.

“It’s every transit entity in the state [facing financial troubles],” Kelleman said in an interview after the meeting. “No entity is going to survive.”

The situation was so serious at SEPTA that in November Shapiro shifted $153.4 million in road and bridge funds to the agency to hold off similar service cuts and fare increases until this year’s budget process. Officials there said the agency would begin a “death spiral” without more funding, and Kelleman said PRT would face the same situation next year.

“Absolutely, it’s that serious here,” she said.

The agency has little room to cut costs and maintain service, Kelleman said, because 30% to 35% of spending is for items like wages, health care and pensions.

In meetings with Harrisburg officials, Kelleman said she has been stressing how much of an economic engine PRT is for the state, estimating that every dollar the agency spends generates $3 in other spending. Over the past five years, that has translated to about $1.6 billion in Allegheny County and another $200 million across the state, including $114 million in Westmoreland County, $12.3 million in Washington, $4.6 million in Butler, $2.7 million in Indiana and $2.1 million in Crawford.

That money goes for items ranging from salaries and benefits to bus tires and fuel, seat covers, engine parts, office supplies and construction materials for the 79 bridges and 11 tunnels the agency owns.

Kelleman said she believes legislators and administration officials have received her well.

“Actually, we’re getting a good reception,” she said. “Both sides are engaged. They’re asking good questions and seem interested in what we are presenting to them.”

If the Legislature passes a full transportation funding bill, it would set a new base for PRT’s annual subsidy. The state money requires a 15% match from Allegheny County, and then each year the state subsidy and county match would increase 3%.

Last year’s proposal from Shapiro would have granted PRT about $39 million a year, far less than its request this year. Kelleman previously said the agency would be facing a deficit of $120 million this year and would have to begin planning “wholesale abandonment of services” if funding isn’t increased.

Transit agencies have at least one area of strong support for more funding. A statewide coalition of transit advocacy groups, including Pittsburghers for Public Transit, has repeatedly asked Shapiro to make transit his top spending priority when he releases his preliminary budget on Tuesday.

The need for additional funding comes at a time when the agency is in the midst of redesigning its 95 bus routes to adjust to changes in ridership patterns since the pandemic. Ridership is still down about 30%; there is less demand for traditional rush-hour service and more need for weekend, midday and late-night trips.

Since that project is supposed to be done without increasing costs, it shouldn’t be disrupted. But if the agency is forced to reduce service, it likely would have to pause that project while it plans for service cuts, including holding a series of federally required public hearings to make sure the cuts don’t single out particular neighborhoods or groups of riders.