SEPTA is Financially Sound?!
In a letter to the Philadelphia Inquirer, SEPTA general manager Joe Casey challenges our commentary in which we called for SEPTA to competitively contract routes and for barriers to public sector strikes. Casey says that SEPTA’s pension “plan is fiscally sound”, that “SEPTA is financially sound,” and that our solutions are “simplistic alternatives.”
Of course we were referring to the SEPTA that is expecting a $120 million deficit in 2011, and the one that reported in October an operating revenue decline of 4.6% over the previous year to date, while operating expenses had increased 2.5%. This sounds like the same definition used to tell us Fannie Mae was “financially sound.”
SEPTA’s two largest pension fund (SAM and City Transit) were funded at 71% and 61% of accrued liabilities – underfunded even by government standards – as of June 2007, according to SEPTA’s latest annual report (page 43). This is, of course, before the massive decline in the market which hit all pension plans hard. I can’t say why SEPTA hasn’t made the latest data on pension plan values public, but I can’t imagine the news will indicate “fiscally sound plans.”
And instead of “simplistic alternatives” like mass transit competition, penalties for government workers who strike, or even pension reform, SEPTA supports much more complex and well thought out solutions:
- More state money for SEPTA – almost $7 million from an unknown pot of money in PennDoT that Governor Rendell handed over to SEPTA for employee bonuses.
- More state money for SEPTA – by tolling I-80 drivers to subsidize SEPTA, even though the road doesn’t come near SEPTA’s service area.