Federal windfall rescues SEPTA Gov. Rendell announced $412 million to stabilize transit agencies until 2007. GOP leaders question why he kept it quiet.

Posted: March 01, 2005

Gov. Rendell yesterday swept away SEPTA riders' anxieties about fare hikes and service cuts by requesting that a recent, undisclosed windfall of federal highway money be used to make transit agencies solvent statewide until 2007.

"This is a good day. There will be no need for service cuts, layoffs or fare increases. Riders have certainty," Rendell said as he announced a funding package far broader in scope than anticipated.

But for its part, SEPTA said it would not formally act on threatened cuts and fare increases until its March 20 board meeting. SEPTA board chairman Pasquale Deon said: "I'm hoping what he says he can do, he can do. We'll keep the system operating on that premise."

Rendell was expected this week to transfer $68 million in highway money to float struggling transit agencies. Of that, SEPTA expected $42.5 million to rescue riders from a 20 percent service cut and a fare hike of 25 percent threatened to begin Sunday.

Rendell instead surprised everyone with a transfer of $412 million to stabilize transit agencies until 2007.

At a morning news conference at 30th Street Station, the governor said the U.S. Department of Transportation gave the state permission to spend $666 million in new federal highway grants effective Feb. 3. About one-third of that, he said, would result in new road and bridge improvement projects.

Unlike previous transfers of highway funds to rescue transit, Rendell added, this plan would not cancel or delay any road work.

While welcome news for train and bus riders, Rendell's announcement appeared to blast apart the recent and fragile detente between Rendell and GOP House and Senate leaders. For two years, they have tangled on whether and how to rescue mass transit.

In recent weeks, both sides have agreed on the need to also bolster the state's lean budget for road and bridge repairs.

On Feb. 9, Rendell submitted his proposed 2006-07 state budget, proposing a $5.8 million increase in transit funding. He failed to mention the Feb. 3 federal windfall then and last week, when his $562 million tax-hike proposal for transit and roads was rebuffed by GOP leaders in a meeting.

The bonanza announced yesterday warmed Rendell's critics here but infuriated many GOP leaders in the state capitol.

"Gov. Rendell has stood with the city and the riders who rely on SEPTA on a daily basis," Mayor Street said.

But the unexpected news sent State Rep. Rick Geist (R., Blair), chairman of the House Transportation Committee, into a heated exchange with Secretary Allen Biehler of the Pennsylvania Department of Transportation.

"We had words," Geist said. "It is amazing to me how they can find money when they need it. Why didn't Rendell do this in his budget?"

House Speaker John M. Perzel (R., Phila.) was more sanguine. "Nothing surprises me," he said. "If it takes care of the problem, I'm OK."

With a new bounty of road grants coming this year, SEPTA can bank on the transfer next week by the Delaware Valley Regional Planning Commission, its chief predicted. The agency, which channels all federal transportation funds in Southeastern Pennsylvania, meets March 9 to consider Rendell's request.

"My board members will probably approve this," director John Coscia said yesterday, sounding gleeful at the prospect of an extra $86 million in road funds this year alone. "We will add more projects. This is a win/win situation."

And Rendell warned SEPTA's largest union, whose contract expires in two weeks, that a city transit strike on the heels of such largesse would not bode well for permanent funding relief from state lawmakers.

"The workforce should understand the effect that would have in Harrisburg," Rendell said of Transport Workers Union Local 234, which represents city transit operators, mechanics and cashiers.

At issue in the coming talks is whether SEPTA will succeed in forcing veteran union workers to contribute weekly for the first time for health care and retiree prescriptions.

"Today in America, there isn't anybody who does not contribute to the cost of their health care," Rendell said.

Pennsylvania's $666 million highway windfall came as the result of a spending stalemate in Congress, whose members have bickered for the last two years over how much each state would receive under a new transportation spending plan. The last guidelines expired in September 2003.

With no prospect for new spending rules in sight, the U.S. Department of Transportation has been disbursing transportation grants to Northeastern states using historically generous guidelines, Coscia said.

A memo distributed by PennDot to local transportation officials yesterday notes that the additional funds "were available to the Commonwealth on Nov. 15, 2004. The authority to spend these funds was received on Feb. 3."

All of which astounded Rendell's critics.

"Welcome to our world of dealing with Ed Rendell," said Steve Miskin, a spokesman for House Majority Leader Sam Smith (R., Jefferson).

Asked why he had not been more forthcoming with lawmakers in recent weeks about the federal transportation grants, Rendell said yesterday that he "always said I would" transfer highway money. "This is robbing Peter to pay Paul. It is my hope that the legislature will act. All of this money could be programmed for roads and bridges and highway repairs."

There is little chance now for a transportation tax hike package in Rendell's term, said Erik Arneson, a spokesman for Sen. David J. Brightbill (R., Lebanon), the majority leader. "It was insanity then. It is insanity now. This is just a wild dance that he is doing on this issue," Arneson said. "It doesn't bring credibility to the table. This is going to make things more difficult."

The refusal by the GOP-controlled legislature "to sit down and have serious negotiations" about crafting a transportation tax hike plan made it necessary to move the new road money to transit, Rendell said.

As a result, many Pittsburgh transit riders have a refund coming. To meet a $25 million deficit, the Port Authority of Allegheny County began charging March pass holders about 14 percent more. Cash fares were to rise a quarter from $1.75 to $2 today with a 12 percent service cut beginning Sunday.

By executive order, Rendell created a nine-person "Transportation Funding and Reform Commission" to audit how SEPTA runs and suggest new means for long-term funding.

Contact staff writer Jere Downs at 610-313-8128 or jdowns@phillynews.com.

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