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For Philadelphia Transit, a Canceled Project Could Be a Blessing

The scrubbed rail extension illustrates the financial crisis at Southeastern Pennsylvania Transportation Authority and at other transit agencies around the country. Still, some advocates say it’s an opportunity, too.

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The federal government denied SEPTA's request for funds to pay for a rail extension because it didn’t feel confident the transit agency would have enough money to cover the inevitable cost overruns for the project, which had ballooned to more than $3 billion at the most recent estimate.
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In Brief:
  • The Southeastern Pennsylvania Transportation Authority (SEPTA) spent at least $53 million planning a train line to King of Prussia, which it abruptly paused this year when it was denied a federal grant.

  • The agency is facing a $240 million budget gap next year and a $5.1 billion state-of-good-repair backlog.

  • SEPTA and transit advocates hope state lawmakers will provide new funding streams that could sustain capital expansion projects and improve service frequency.


  • If you’re taking public transit from Philadelphia to King of Prussia, a western suburb that’s home to the third-biggest shopping mall in the United States, you’d better leave a good amount of time. Zar Hill knows this because he does it five times a week. Most days, it takes a little over an hour on the bus to get from his home near Center City to his job at the Foot Locker in the King of Prussia Mall.

    If there’s anything wrong on Interstate 76, though, it can take much longer. For the most part, Hill, 23, doesn’t mind the commute: Sometimes the bus is dirty and there are unruly people who cause problems for other riders — “your typical a-holes,” he says. But his bosses tend to be understanding when he’s not on time for a shift.

    “They know the whole SEPTA situation,” Hill said recently, after riding the 125 Bus from LOVE Park to the King of Prussia Mall. “They’ve been dealing with it for years.”

    For the last few years, SEPTA has been pushing to extend an existing high-speed rail line from the city to King of Prussia, hoping it would be a boon to the regional economy by connecting its major job centers while relieving congestion on highways and giving faster, more reliable service to transit-dependent riders. The agency spent at least $53 million planning the project, according to a report.

    But in March, SEPTA abruptly dropped the plan when the Federal Transit Administration denied the agency a Capital Investment Grant to complete the extension. The reason why, agency leaders say, is that the feds didn’t feel confident SEPTA would have enough money to cover the inevitable cost overruns for the project, which was estimated at around $500 million a decade ago but ballooned to more than $3 billion at the most recent estimate.
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    An artists's rendering of the canceled King of Prussia rail extenstion project. (SEPTA)
    The cancellation of the project — SEPTA leaders are careful to call it a “pause,” without nursing expectations that it will ever be resumed — was a blow to the agency’s capital plan, but welcome news to advocates who feel SEPTA should focus on improving service in the city, where most of its riders live. It also illustrates a much bigger crisis at SEPTA, which, like every big transit agency, is facing a sustained loss of riders, a growing budget gap and an exceedingly narrow path to stability that runs through the often-unfriendly state Legislature.

    “We’re in a very fragile state,” says Leslie Richards, SEPTA’s general manager.

    A Signature Project 


    The King of Prussia rail project has been talked about in the Philadelphia area for decades, but only became an intense focus of SEPTA’s capital planning in the last few years. It was conceived as a signature project for the agency, which already operates an extensive regional rail network, dozens of bus lines, eight trolleys and two subways. The loudest support for the project came from a coalition of business groups. King of Prussia has developed fairly steadily since the 1970s and ‘80s as a corporate and retail center with an increasing amount of housing, says Eric Goldstein, president and CEO of the King of Prussia District, a business improvement group that spearheaded the KOP Rail Coalition.

    The rail project would have dramatically improved the commute for the roughly 15 percent of King of Prussia’s workforce that commutes from Philadelphia every day, Goldstein says. And it would have been a job-creating boon to the region, with construction jobs on the rail itself and new development around transit stations along the route. Train service is “one of the few missing things” in King of Prussia, Goldstein says. But even still, it was always an “enhancer” for the community, never a “definer.”

    “We’ve certainly been a force for decades without it. The past decade has been incredible without it, and we have no reason to believe the future won’t be incredible without it,” Goldstein says.

    Other Priorities


    Many transit advocates in the city have argued that extending rail service to a far-flung suburb was a questionable capital priority for SEPTA, especially given that it was only projected to carry about 10,000 riders a day. Since the pandemic began and ridership cratered in the city, the King of Prussia rail project seemed increasingly to some like a bad idea. Leaders argued that capital expansion wasn’t a zero-sum game, that KOP rail would be a big improvement to the transit network without taking away from other parts of the system, and that federal funds would be better spent in Philly than another region. But it always felt like KOP rail was a project that came at the expense of other agency needs, says Daniel Trubman, a transit advocate in Philadelphia.

    “There’s a financial element, but there’s also a focus element: An agency can only have so many priorities,” Trubman says.

    Shortly after the KOP rail project was canceled, SEPTA announced it was reallocating hundreds of millions in funding from that project to two other capital projects, including modernization of its trolley system and accessibility upgrades at railway stations. Those projects will have operational benefits throughout the system too. And the fact that they’re getting a boost from the cancellation of KOP rail is a vindication of the view that capital projects do keep some resources from other priorities — “something to keep in mind going forward,” Trubman says.

    “We don’t celebrate the cancellation of any public transit project, because it’s something that is an essential service for our communities,” says Connor Descheemaker, coalition manager for the advocacy group Transit Forward Philadelphia. “But the challenge with pausing a project like this is to ensure that this decision only leads to better and more well-researched and better publicly supported [capital projects].”

    Funding Stretched Thin


    Philadelphia isn’t alone in having to rethink its ambitions for transit expansion. Earlier this year, Atlanta’s transit agency announced it could only move forward with about half the projects it had initially planned to fund with a voter-approved sales tax. Most other big agencies are facing huge shortfalls in their operational budgets resulting from a loss of riders, lower fare revenue and the expiration of federal relief money.

    SEPTA has recovered about three quarters of bus riders from the pre-pandemic baseline but only about half of subway and regional rail riders. The agency is facing a $240 million deficit next year, which Richards says will force it to enact both fare increases and service cuts on the order of 20-30 percent unless it can get more funding from local, state or federal sources.

    According to its most recent capital budget, SEPTA’s maintenance backlog has ballooned to more than $5 billion. Inflation and supply chain costs will keep pushing that number higher. The agency is also carrying out a redesign of its bus network, but so far it doesn’t come with any new funding for expanding service overall. New money is coming in from the Infrastructure Investment and Jobs Act (IIJA) that Congress passed in 2021, but it barely keeps up with rising costs, Richards says.

    “We’re very grateful, but when you look at the formula, SEPTA gets another $100 million a year out of IIJA. And almost all of that is being eaten up by inflation, by increases in labor costs, by increases in material costs,” she says. “It’s almost not even an increase.”

    Transit Needs More Money


    SEPTA needs a new funding model if it’s ever going to be in the position of pursuing ambitious expansions again, or even keeping up with maintenance and frequent service, Richards says. On this issue, the agency and transit advocates are aligned — even those who have been critical of the KOP plan and some of SEPTA’s other priorities.

    SEPTA ranks near the top among transit agencies in terms of generating revenue through fares and other earned sources, but ranks much lower on local subsidies, according to Descheemaker, of Transit Forward Philadelphia.

    To address that gap, SEPTA is hoping the state Legislature will approve enabling legislation to allow Philadelphia and its surrounding suburban counties to generate more transit funding from local fees and taxes. Pennsylvania state Rep. Ben Waxman, a Democrat who represents Center City Philadelphia, introduced that bill in April.

    In years past, the Republican-controlled state Legislature was sometimes openly hostile to transit — “It was seen as a city issue or a poor people issue,” Waxman says — but this year, Democrats have a narrow majority in the Statehouse, and the newly elected Democratic governor, Josh Shapiro, has deep roots in Montgomery County, just outside of Philadelphia. Waxman says there so far doesn’t seem to be much explicit opposition to letting Philly area counties raise their own funds to support SEPTA projects, but it’s a question whether the bill will get high enough priority in the Legislature to pass this year.

    Richards, who took over the top job at SEPTA after working as secretary of transportation for Pennsylvania, says she’s optimistic Harrisburg leaders will step up to approve more funding. State lawmakers tend to respond to urgency: “Things don’t move until the last tipping point of, it has to be done or there’s going to be repercussions,” she says. And the repercussions of service cuts for the Philly region, a major part of the state’s economy, would be huge, Richards says.
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    Pennsylvania Department of Transportation Secretary Leslie Richards (left) described SEPTA as fragile as it faces a sustained loss of riders, a growing budget gap, and an exceedingly narrow path to stability that runs through the often-unfriendly state legislature.
    (Tim Tai/TNS)

    Is A Better Future Possible?


    Just as the King of Prussia rail project crashed to a halt, a movement has grown to build a new subway on Roosevelt Boulevard, a fast, dangerous arterial in northeast Philadelphia that advocates say would provide a much better benefit to transit riders. The project was proposed years ago, but like many others, it went dormant.

    Jay Arzu, a city planning Ph.D. student at the University of Pennsylvania, rediscovered it in a class led by Leslie Richards, and has since made it his mission to revive the project. The most recent projections suggested it would have many times more riders than the King of Prussia rail extension. Jared Solomon, a state representative who represents parts of northeast Philly where the subway would be built, hosted a well-attended town hall about the project earlier this year, and another is in the works.

    In some ways, the Roosevelt Boulevard Subway project is far-fetched. The projected cost is much higher than it was for the KOP rail, and SEPTA couldn’t even come up with enough local matching funds to bring that project to completion. Richards says she’s a fan of the project — she’s still a fan of the KOP project too — but said publicly in January that there was no viable way for SEPTA to pay for it. Undeterred, Arzu says that Richards’ rejection of the subway project only amplified the movement around it.

    Arzu dreams of attending a press conference in a few years’ time in which local, state and federal officials announce the start of construction for the Roosevelt Boulevard Subway. It’s doable by July 4, 2026, he says. But the first thing that has to happen is for the state to step in and help SEPTA raise more money.

    “We can actually give this region a level of service that it deserves if we fully fund SEPTA,” Arzu says. “That’s gonna be the word of the year: fully fund SEPTA.”

    Note: This article was updated to more accurately reflect the share of King of Prussia's workforce that travels from Philadelphia.
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    Riders walk past SEPTA's Market Frankford Line stop at 15th Street in Philadelphia. The agency is facing a $240 million deficit next year, which could force it to enact both fare increases and service cuts on the order of 20-30 percent unless it can get more funding from local, state, or federal sources.
    (Steven M. Falk/The Philadelphia Inquirer/TNS)
    Jared Brey is a senior staff writer for Governing. He can be found on Twitter at @jaredbrey.
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