ESI was asked to assess the economic consequences of potential service cuts and fare increase due to SEPTA’s FY 2026 Funding Crisis.
Transportation access changes the value and economic potential of locations. Mass transit service has long shaped development and land use patterns in Southeastern Pennsylvania, connecting workers to jobs, students to schools, and residents to amenities and services of all kinds. The region’s transportation network is essential to the density and productivity that enables the southeast to produce 40 percent of Pennsylvania’s economy and tax base with 32 percent of the population concentrated on 5 percent of the land area.
Over more than a decade, ESI has produced numerous reports on the economic value of current and proposed SEPTA service to the region and commonwealth. These models and analytical techniques quantifying the value of service were employed to quantify the value of potential losses from the service cuts of more than 45% and fare increases of more than 20% associated with SEPTA’s funding crisis.
ESI’s report quantifies the potential effects of these cuts in terms of property values, employment, tax revenues, and social impacts. Degrading the region’s transit system would reduce its economic competitiveness by degrading its attractiveness as a place to live and work. These cuts are estimated to reduce regional housing values by nearly $20 billion and downgrade the region’s job growth trajectory, reducing regionwide earnings by an estimated $6 billion.
These economic losses in turn would have consequences for state and local governments and school districts, which rely on property values and earnings as the bedrock of the tax bases that enable governments to raise revenue to provide services. Total state and local tax revenue losses are estimated at nearly $700 million annually, equating to a loss of $11.4 billion in Net Present Value for state and local governments.