State leaders say it will be ‘tough’ year to provide extra money for agencies such as Pittsburgh Regional Transit

Some top Democrats say they think this will be a hard year for the state Legislature to provide as much extra money as Pittsburgh Regional Transit and other transit agencies say they need this year to avoid service cuts, fare hikes and layoffs.

The local agency says it is projecting a $100 million budget deficit for the fiscal year that begins in July because emergency federal funding provided during the COVID-19 pandemic is running out and state funds haven’t increased in more than 10 years.

But Gov. Josh Shapiro’s proposed budget calls for the same increase that the state Senate refused to approve last year — increasing the percentage of state sales tax funds earmarked for the Pennsylvania Public Transportation Trust Fund by 1.75% for the next five years. That would raise the subsidy for PRT by just over $40 million, far less than the agency says it needs.

The Southeastern Pennsylvania Transportation Authority, which serves five counties around Philadelphia, has even greater needs, exemplified by Shapiro shifting $153.4 million in road and bridge funds to the agency in November to avoid similar cuts until the issue could be dealt with this budget season.

Those two agencies get 87% of the state subsidy funds, but almost every county has a smaller transit agency with needs it is struggling to meet.

“It’s going to be tough,” said state Sen. Jay Costa, D-Forest Hills, the majority leader in the Senate.

Costa said it is easy to see the need for more transit funding, but the state is facing substantial costs and revenue shortages in other areas, too.

For example, the proposed budget calls for a $601 million increase in education funding as part of the state’s new requirements after Commonwealth Court ruled that funding wasn’t distributed fairly among school districts, hurting districts in low-income areas. The overall proposal also requires the state to use $1.6 billion from its $6.4 billion surplus to make it balance.

On the revenue side, Republicans have expressed concern that the budget also plans to use $536 million from the sale of adult-use cannabis and $368 million from taxes on skill games in bars and restaurants. Legislators haven’t passed bills to support either of those activities, so there’s no money available there yet to balance the spending plan.

Costa noted that it’s questionable whether all owners of game machines in bars and restaurants would keep the machines if they are taxed at 20% as proposed, so that might not be a reliable long-term source of funding for transit of anything else.

State Rep. Joe McAndrew, D-Penn Hills, a member of the House Transportation Committee, said the governor’s proposal that would grant PRT just over $40 million would be “a really nice start.” He noted the same proposal passed three times in the House last year despite no support from Allegheny County Republicans, only to die in the Senate where it wasn’t brought up for a vote.

“We’re doing everything in our power to make sure there aren’t cuts to those systems,” said McAndrew, noting that he heard concerns in all corners of the state through a series of on-site hearings the committee held last year. “All of those people say they need more money.”

McAndrew said that top Republican leaders such as Sen. Kim Ward, R-Hempfield and Senate president pro tempore, and Sen. Joe Pittman, R-Indiana and Senate majority leader, should do more to look out for the interests of Western Pennsylvania.

Republican leaders could not be reached for comment.

State Rep. Ed Neilson, D-Philadelphia and chairman of the House Transportation Committee, was more optimistic. He said the statewide hearings and support from the state Chamber of Commerce have been helpful in building support for more transit funding, especially Shapiro’s recommendation.

“The constant message is that we need this,” he said. “The hope is the message has resonated with people.”

Reminded that Shapiro’s proposal is a long way from what transit agencies say they need, Neilson said he considered that “a starting point.” He said he believes Senate Republicans need assurances that agencies will be judicious in how they spend any additional funds.

“We’re hoping to build on that number,” Neilson said. “We can’t just give money. We have to hold everyone accountable. I think that’s what the Senate was looking for.”

In addition to transit funding, the state also is more than two years beyond the end of the last comprehensive bill for road and bridge funding. Increases last year and this year have come from the state phasing out funding state police from Motor License Fund revenue, but that isn’t a long-term solution.

The uncertainty about state funding comes as Pittsburgh Regional is developing its preliminary budget that will be presented in April for the new fiscal year that begins in July. Spokesman Adam Brandolph said the agency will budget for the amount of money it is sure will be available and adjust as needed.

In the meantime, the agency will continue lobbying efforts in Harrisburg to “make sure they are all aware of the needs of riders in Allegheny County,” Brandolph said. CEO Katharine Eagan Kelleman has said the level of service cuts the agency would have to make without more money would be “devastating” to riders.

“We’re going to plan a balanced budget that includes the money we have available,” Brandolph said. “We still maintain some money there [$420 million at the end of December], but that doesn’t negate the need for reliable long-term funding.”

Brandolph stressed that all transit agencies rely on state and federal funding because fares account for less than 20% of revenue.

“Obviously, the landscape of public transit has changed drastically in the past five years due to the pandemic,” he said, noting ridership is still about 30% below pre-pandemic levels.

“Every transit agency has a deficit that needs state and federal money to plug the hole. That’s not a critique on our spending, but costs increase.”

More than 30% of PRT’s spending is tied up in fixed costs such as  pensions and health care, which leave few other areas to cut costs without reducing service.

Despite the predictions of a difficult budget year in Harrisburg, PRT and other agencies will continue the push for more funding.

“It’s always going to be a difficult year,” Brandolph said. “Regardless of the year or timing of it, we have to have more money.

“We’re going to the mat for our riders. We want to ensure the future of PRT for the people of Allegheny County.”

State budget hearings begin this week in the House and Senate with the state Department of Transportation scheduled to appear before the House Appropriations Committee at 10 a.m. Wednesday.