Sunday, May 20, 2007

The Economic Impact of Service Cuts and Fare Increases

The Economy League of Greater Philadelphia has released a report on the economic impact of the service cuts and fare increases that SEPTA will impose if the state legislature does not come up with funding to fix a $130 million budget shortfall. The report is entitled "The Price of Inaction: An Analysis of Economic Impacts Associated with SEPTA's FY 2008 Operating Budget "Plan B" Alternative" and was prepared by Econsult Corporation.

The report paints a dire picture of the economic impact of shrinking the SEPTA system and raising fares. Note that SEPTA's budget shortfall is about the same as the CTA's 2007 budget shortfall. Does anyone have a sense whether this study of the impact of the SEPTA cuts is reasonable and whether the conclusions are transferable to this region? The key findings are that the SEPTA budget cuts would:
  • Cost current transit riders an additional $182 million annually through higher fares and longer wait times.
  • Cost drivers and additional $38.9 million because of increased congestion and the higher cost of driving.
  • Cause the five counties in Southeastern Pennsylvania to lose 14,500 jobs and $868.5 million in net earnings.
  • Depreciate property values by about 6.5 percent regionwide, a net value reduction of over $7 billion.
  • Reduce state and local tax collections by about $90 million annually.

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