SEPTA proposes 45% service cut, fare hike amid $213M budget gap

SEPTA has unveiled a proposed fiscal year 2026 budget that would slash transit service by 45% and hike fares by over 20% to address a massive funding shortfall. 

Facing a $213 million deficit, the transit agency’s “doomsday” plan calls for major service reductions across buses, subways, trolleys and regional rail, along with a 21.5% fare increase. 

SEPTA officials say the drastic measures – including eliminating dozens of bus routes, shutting down several rail lines, and imposing a 9 p.m. nightly curfew on trains – are necessary unless new funding comes from the state to fill the budget gap.

Massive Service Reductions Planned

Interim General Manager Scott Sauer announced the grim proposal Thursday, warning that without additional aid the agency “will reduce service by 45% in the coming year."

Bus service would be hit especially hard, with a total of 50 bus routes slated for elimination in stages. The first wave of cuts on August 24 (when SEPTA’s fall schedules begin), would immediately scrap 32 bus routes and significantly scale back others.

 Additional route cuts would follow by January 1, taking out 18 more bus lines to reach the total of 50 eliminated routes. 

Rail transit faces unprecedented cutbacks as well. Under the plan, five of SEPTA’s 13 regional rail lines – including the Paoli/Thorndale line, one of the system’s busiest – would be completely shut down. 

Service on the remaining rail lines, as well as on the Broad Street Subway, Market-Frankford Line (the El), and trolley network, would be reduced in frequency. Perhaps most strikingly, all SEPTA rail service would end at 9:00 p.m. nightly under a systemwide curfew, a move that would halt late-night trains and trolleys after 9 o’clock. 

Sauer said these sweeping cuts would amount to “the dismantlement of public transit for our city and region as we know it today." 

The downsizing would leave the Philadelphia region with “a SEPTA that is a shadow of itself, less useful for our riders and more expensive” due to higher fares. 

Reliable travel options for daily commuters would be greatly diminished, he noted, as the transit network shrinks. To cope with the downsized service, SEPTA would also implement cost-saving measures affecting its workforce. A hiring freeze for all employee positions is set to begin in September, and the agency may consider layoffs or further workforce reductions by spring 2026 as a last resort.

“We will be monitoring the size of the workforce needed to provide this fewer service,” Sauer explained, adding that management hiring has already been frozen and job cuts could follow if the situation doesn’t improve.

Steep Fare Hike to Highest-in-Nation Level

In addition to service cuts, SEPTA riders would face a significant fare increase in 2025. The proposed budget calls for a 21.5% fare hike, raising the base cash fare from $2.50 to $2.90 per ride.

That jump – scheduled to take effect on September 1 – would give Philadelphia one of the highest transit fares of any major city, on par with New York City’s $2.90 subway fare. 

The fare hike is intended to help close the deficit, but it comes on top of a smaller 7.5% fare increase SEPTA already implemented in late 2024. (The December 1, 2024 fare adjustment, which was SEPTA’s first fare change in several years, raised about $14 million in new revenue.) 

Under the new proposal, the price of a transit ride would climb even further. “Our customers are paying more... and with this proposal, they’ll pay even more,” Sauer said of the burden on riders. 

Transit advocates note that such a steep fare increase could price out some riders, especially low-income passengers who rely on affordable transit. SEPTA’s base fare has long been lower than peers like New York and Washington, but a $2.90 fare would mark a record high for Philadelphia. Other fares and passes would likely rise by similar percentages. SEPTA officials acknowledge the ridership “elasticity” effect – that raising fares and cutting service will drive some riders away – but say they have few options to generate more income absent increased funding.

Impact on Riders, Businesses, and 2026 Events

The drastic service rollback would have far-reaching effects on everyday riders and the region’s economy. SEPTA carries nearly 800,000 passenger trips on an average weekday, and the agency estimates it would lose 350,000 of those with these cuts. That drop of almost half the ridership represents 350,000 daily trips disappearing – a number Sauer pointed out is “more people than the busiest section of I-95 carries in a day." 

Commuters who can no longer rely on transit may turn to driving, which officials warn will flood local roads with additional traffic. “Those who can afford to do so will likely switch to driving, and that would add significant congestion to our already overcrowded roadways,” Sauer said. 

For those without alternatives, the remaining transit service would be less frequent and less reliable, potentially affecting access to jobs, schools, and healthcare. Riders who travel at night would be particularly hurt by the 9 p.m. curfew on trains and trolleys, as essential night shift workers, late-evening students, and city residents out for events could find themselves stranded. 

SEPTA has traditionally offered special late-night trains for big events, but under the cuts these extra services would end. Sauer warned that major Philadelphia events in 2026 could be hampered by the lack of transit support. 

“Beyond regular riders, those traveling to games at the sports complex and other special events [after 9 p.m.] would have to navigate the 9 p.m. curfew,” he said, noting SEPTA “would be forced to cease providing any additional service” for events. 

This includes planned support for the 2026 FIFA World Cup matches to be hosted in Philadelphia, as well as celebrations of the United States’ 250th anniversary in 2026. 

With no supplemental trains or extended hours for such events, attendees would have to find other transportation. Local businesses – from stadiums and concert venues to restaurants and retailers – fear losing customers if people cannot easily travel at night or on eliminated routes. “The effect on local businesses would be immediate and far-reaching,” Sauer said of the anticipated economic ripple effect.

$213 Million Funding Gap Drives Crisis

SEPTA’s austere budget is driven by a projected $213 million operating budget gap for fiscal 2026. Transit officials say this fiscal crisis has been building for years, exacerbated by the expiration of federal COVID-19 relief aid and rising costs. 

“Like most transit agencies across the country, SEPTA is facing a structural budget deficit due to a combination of the ending of federal COVID relief funds and increases to the day-to-day costs of providing service,” Sauer explained. 

During the pandemic, Washington provided emergency funding that kept buses and trains running despite plummeting ridership, but those one-time dollars are now gone. At the same time, expenses for fuel, power, vehicle maintenance, and security have climbed sharply with inflation. Labor costs are also higher due to recent union contracts and the need to address safety and cleanliness issues on the system. 

SEPTA has already taken steps to cut costs and boost income, but it hasn’t been enough to close the gap. Over the past three years, the agency pursued internal efficiencies and spending cuts, reducing consultant contracts and even freezing management salaries. 

On the revenue side, SEPTA increased fares modestly in late 2024 and reinstated parking fees at park-and-ride lots. 

Thanks to those efforts, the deficit was whittled down somewhat – “we’ve managed to reduce our budget deficit to its current state of [$]213 million,” Sauer noted – but a massive shortfall remains. 

By law, SEPTA must pass a balanced budget each year, so it cannot operate at a loss. With no additional funding identified to fill the $213 million hole, the only way to balance the budget on paper was to slash services and raise fares to reduce costs and increase revenue. Transit officials stress that they have “done a lot already to reduce our costs… and we know that there’s more we can do to be leaner,” but even painful internal cuts can’t solve a gap of this size. 

“There’s no amount of cutting internally and still holding on to the service we provide that’s going to [save] $213 million,” Sauer said bluntly. 

In other words, without a new income source, deep service reductions are the only way for SEPTA to balance its budget.

Hope Hinges on Harrisburg Funding Rescue

SEPTA’s leadership emphasizes that this dire scenario could still be averted – but only if state lawmakers step in with a funding solution. 

“Let me make this clear: This doesn’t have to happen,” Sauer said, underscoring that the proposed cuts and fare hikes are a worst-case plan. “If the state legislature passes Governor Shapiro’s budget [including his transit proposals], we don’t have to do any of this,” he said. 

Pennsylvania Governor Josh Shapiro has put forward a transit funding package in his state budget proposal that would provide a new dedicated revenue stream to agencies like SEPTA. That plan, which could include shifting unused state funds or authorizing new local taxes for transit, is currently under consideration in Harrisburg. Last year, Shapiro’s administration provided a one-time stopgap – diverting federal highway funds to SEPTA – to delay these drastic cuts. 

However, a long-term fix did not pass the legislature. Now SEPTA officials are pleading with state lawmakers to enact a sustainable funding source before the new fiscal year starts on July 1. They have been making their case in the state capital and warning colleagues statewide; transit agencies in Pittsburgh and other regions are facing similar fiscal cliffs. 

Local leaders are backing SEPTA’s appeal as well. Philadelphia Mayor Cherelle Parker and the surrounding counties have collectively increased their contributions to SEPTA’s budget, and business groups have voiced support for saving transit service. 

“They all see the value in what SEPTA provides,” Sauer said of the business and civic community, noting that employers depend on transit to bring both their customers and workers. 

The consensus among regional officials is that the state must step up. As Sauer put it, funding transit is “very important to this region and to the Commonwealth” of Pennsylvania. 

SEPTA’s proposed 2026 budget will go through public hearings this spring and must be approved by the SEPTA Board by the end of June. In the meantime, SEPTA remains in talks with legislators. Sauer expressed guarded optimism that a deal will come together, even as the agency moves forward with its contingency plan. 

“We have to plan using the resources that we currently have,” he said, “but I’m still hopeful, I’m still optimistic that this is going to get done." 

If Harrisburg delivers a funding breakthrough, Philadelphia riders could be spared the brunt of these cuts. If not, the region will face an unprecedented rollback of its transit system as the new fiscal year unfolds.