Understanding SEPTA’s Statewide Economic ValueReport Highlights
June 2013
ECONSULT SOLUTIONS, INC.ECONOMICS | POLICY | STRATEGY
WHO WE ARE
QUANTITATIVE AND STRATEGIC ANALYSIS
RECENT PROJECTS
• Economic Development
• Real Estate
• Transportation
• Public Policy
• The value of open space
• Strategic Investment in Chicago Retail Corridors
• The Economic Value of SEPTA
• Impact of Supermarkets on Urban Land Value
THE ECONOMIC CASE FOR INVESTMENT IN SEPTA
WHAT WE EXAMINED
WHAT IS SOUTHEASTERN PENNSYLVANIA’S SHARE OF STATEWIDE TRANSPORTATION INVESTMENT?
ECONOMIC OUTPUT POPULATION TRANSPORTATION INVESTMENT
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
40%
32%
TRANSIT-13.3%
ROADS & BRIDGES-13.4%
27%
40% OF ECONOMIC OUTPUT, 32% OF POPULATION & 27% OF TRANSPORTATION INVESTMENT
SEPTA CAPTIAL INVESTMENT?
2012 INVESTMENT 34% BELOW 2010 PEAK
FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 $-
$100
$200
$300
$400
$500
$600
$354
$315 $342 $355
$431
$479
$426
$388
$316
$ M
ILLIO
NS
INVESTMENT AND CUSTOMER SATISFACTION
DECLINING INVESTMENT ASSOCIATED WITH LOWER SATISFACTION
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY20136.00
6.50
7.00
7.50
8.00
8.50
9.00
0
100
200
300
400
500
600
Satisfaction
Capital Spending, 1 year Lag Effect
SATI
SFAC
TIO
N R
ATIN
G
CAPI
TAL E
XPEN
DITU
RES
IN $
MILL
ION
S
HOW HAS SEPTA’S RIDERSHIP CHANGED OVER TIME?
FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 270.0
280.0
290.0
300.0
310.0
320.0
330.0
340.0
350.0
300.7 305.2
295.3 298.3
301.0 298.7
296.6
307.2
325.1 329.6
321.0
334.0
339.3
Unlin
ked
Pass
enge
r Trip
s (M
illio
ns)
SEPTA’S RIDERSHIP IS AT A 23-YEAR HIGH
HOW EFFICIENTLY HAS SEPTA INVESTED PUBLIC FUNDS?
2005-2006 2007-2008 2010 2011 20120%
2%
4%
6%
8%
10%
12%
10.1%
6.3%5.8%
4.7%4.3%
CHANGE ORDER RATES (A MEASURE OF PROJECT COST OVERRUNS) CONTINUE TO DECLINE
HOW DOES SEPTA’S OPERATING EFFICIENCY COMPARE WITH OTHER PA TRANSIT AGENCIES?
SEPTA OTHER PA AGENCIES$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$1.49
$2.66
STATE SUBSIDY PER RIDER
SEPTA OTHER PA AGENCIES0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
42%25%
FARE RECOVERY RATIO
SEPTA’S EFFICIENCIES & RIDERSHIP GROWTH HELP KEEP SUBSIDY COSTS BELOW AVERAGE
HOW DOES SEPTA’S OPERATING EFFICIENCY COMPARE WITH INDUSTRY PEERS?
New York (MTA)
Wash. DC (WMATA)
Phila. (SEPTA) Chicago (RTA) Boston (MBTA)0%
10%20%30%40%50%60%70%80% 77%
68%
52% 52% 51%
HEAVY RAIL
New Jersey (NJT) Phila. (SEPTA) Boston (MBTA) Chicago (RTA)0%
10%20%30%40%50%60%70%80%
59% 57%
45% 41%
COMMUTER RAIL
Boston (MBTA) Phila. (SEPTA) New Jersey (NJT)0%
10%20%30%40%50%60%70%80%
49% 46%
23%
LIGHT RAIL
New Jersey (NJT)
Chicago (CTA)
New York (MTA)
Phila. (SEPTA)
Wash. DC (WMATA)
Boston (MBTA)
Chicago (Pace)
0%10%20%30%40%50%60%70%80%
45%38% 36%
30%25% 23% 19%
BUS
SEPTA’S FARE RECOVERY RATIO IS WITHIN A COMPETITIVE RANGE OF INDUSTRY PEERS
NOTE: THE NATIONAL TRANSIT DATABASE DOES NOT COUNT REIMBURSEMENTS FOR FREE & DISCOUNTED SENIOR CITIZEN TRAVEL IN PENNSYLVANIA AS FARE REVENUE, DEFLATING SEPTA’S FARE RECOVERY RATIO BY APPROXIMATELY FOUR PERCENTAGE POINTS
HOW HAS SEPTA’S CAPITAL FUNDING CHANGED OVER TIME?
FY1995
FY 1996
FY1997
FY 1998
FY 1999
FY 2000
FY 2001
FY 2002
FY 2003
FY 2004
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
0
100
200
300
400
500
600
700
REJECTION OF I-80 TOLLING FOR ACT 44
$191 M FROM ARRA
$ M
ILLI
ON
S
SEPTA’S CAPITAL FUNDING IS AT A 15-YEAR LOW
HOW MUCH CAPITAL FUNDING DOES SEPTA RECEIVE COMPARED WITH ITS INDUSTRY PEERS?
Chicago (RTA) New Jersey (NJT) Wash. DC (WMATA)
Boston (MBTA) Phila. (SEPTA) $-
$200,000,000 $400,000,000 $600,000,000 $800,000,000
$1,000,000,000 $1,200,000,000 $1,400,000,000 $1,600,000,000
$1,352,000,0
00 $1,160,000,0
00
$1,000,000,000
$883,000,000
$311,000,000
$957,000,000
$1,152,000,0
00 $997,000,000
$815,000,000
$304,000,000
FY 2012 FY 2013
PER…PASSENGER $2.07 $4.36 $2.40 $2.21 $0.92PASSENGER MILE $0.34 $0.36 $0.49 $0.49 $0.19VEHICLE MILE $6.96 $7.27 $7.75 $9.16 $3.47
SEPTA’S CAPITAL FUNDING IS ORDERS OF MAGNITUDE BELOW COMPARABLE AGENCIES
HOW MUCH ADDITIONAL FUNDING DOES SEPTA NEED TO ACHIEVE A STATE OF GOOD REPAIR (SGR)?
FY2012 FY2014 FY2016 FY2018 FY2020 FY2022 FY2024 FY2026 FY2028 FY2030 FY20320
1
2
3
4
5
6
7
8
9
ELIMINATE BACKLOG IN 20 YEARS ($652M/
YEAR)
MAINTAIN EXIST-ING BACKLOG ($329M/YEAR)
CURRENT LEVEL OF SGR SPENDING
($200M/YEAR)
SGR
BACK
LOG
($ B
ILLI
ON
S)
+$129M PER YEAR TO MAINTAIN BACKLOG; +$452M PER YEAR TO ELIMINATE IT
ECONOMIC IMPACT METHODOLOGY
STANDERD I-O ANALYISIS2,166 capital projects from FY 2004 to FY
2012
Projects split into 23 unique capital budget
departments
Average the past 5 years of activity from
each department
Non-local, non-state spending drops out
Non-local, state project costs stay in the state
model
Expenditures are then apportioned by RIMS II
category
Total costs are aggregated by RIMS II category and inputted
into the model
Local, state projects stay in both the state
and local models
Expenditures are then apportioned by RIMS II
category
Total costs are aggregated by RIMS II category and inputted
into the model
WHAT DOES SEPTA MEAN TO THE REGION’S ECONOMY?
ANNUAL IMPACTS CAPITAL INVESTMENT OPERATIONS TOTAL
DIRECT OUTPUT($ M) $265 $920 $1,185
INDIRECT & INDUCED ($ M) $305 $1,586 $1,892
TOTAL OUTPUT ($ M) $570 $2,506 $3,077
TOTAL EMPLOYMENT 4,079 19,971 24,050
TOTAL EARNINGS($ M) $170 $1,201 $1,371
SEPTA SUPPORTS JOBS, TAX REVENUES, AND ECONOMIC PRODUCTIVITY
ECONOMIC VALUE OF SEPTA
MEASURING THE GAINS ASSOCIATED WITH TRANSIT INVESTMENT
• Lower over all costs of travel by lowering congestion• Time• Parking
• Fewer travel fatalities and injuries• Reduced travel related pollution• Agglomeration economies
• Productivity is enhanced in dense environments. • Variety of location choices—urban, suburban and exurban • More travel options for households• Lower transit operating costs
INVESTMENT AND OPERATING COSTS
LOWER INVESTMENT RAISES TRANSIT OPERATING COSTS
10 9 4 3 2 1 -
0.20
0.40
0.60
0.80
1.00
1.20
1.40
AGE OF BUS
MAI
NTE
NAN
CE C
OST
PER
MILE
($)
SEPTA AND GREATER PHILADELPHIA TRAVEL COST
WITHOUT SEPTA DRIVERS AND TRANSIT RIDERS COST INCREASE DRAMATICALLY
Transit Users Net Increase in Cost: $581 million.
Shift to driving: $336 million Parking: $182 million Shift to private transit $502 million
Costs are partially offset by savings of $439 million that otherwise would have been spent on SEPTA fares.
Regional Drivers Net Increase in Costs: $1.37 billion.
Value of time lost: $1.19 billionParking cost increase: $176 million
Safety Costs from Additional Auto Travel: $134 million
Total Increase in Travel Cost: $2.08 Billion Annually
PERSPECTIVE ON TRAVEL COSTS
• Travel Cost Is Like a Tax, But Worse• Reduce the Competitiveness of a Region
• No Revenue For Providing Services
• Negative Impacts of Increased Travel Cost• Employment• Real Estate Values• Tax Revenues• Safety Impacts
WHAT ARE THE LONG-TERM ECONOMIC & FISCAL IMPACTS OF ELIMINATING SEPTA?
CITY OF PHILADELPHIA
COMMONWEALTH OF PENNSYLVANIA
JOB LOSS (246,000) (102,000)
EARNINGS LOSS ($ M) ($9,700) ($6.700)
PROPERTY VALUE LOSS($ M) ($59,000) ($95,000)
TAX LOSSES ($ M) ($1200) ($409)
DECIMATION OF THE CITY OF PHILADELPHIA
TRAVEL COSTS AND TRANSIT SYSTEM REDUCTION
LOWER INVESTMENT RAISES TRAVEL COSTS
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
0
500
1000
1500
2000
2500
PERCENT OF SEPTA SERVICE ELIMINATION
TRAV
EL C
OST
S ($
MILL
ION
S)
WHAT ARE THE LONG-TERM ECONOMIC & FISCAL IMPACTS OF STATUS QUO FUNDING LEVELS?
CITY OF PHILADELPHIA
COMMONWEALTH OF PENNSYLVANIA
JOB LOSS (59,458) (24,772)
EARNINGS LOSS ($ M) ($2,355) ($1,631)
PROPERTY VALUE LOSS($ M) ($14,296) ($8,443)
TAX LOSSES ($ M) ($289) ($99)
A MASS MIGRATION FROM CITY, WITH SEVERE IMPACTS ON THE REGION & COMMONWEALTH