Southeastern Pennsylvania Transportation Authority (SEPTA) - Lack of Funding

Southeastern Pennsylvania Transportation Authority (SEPTA) - Lack of Funding

Introduction

This research paper is based on the Southeastern Pennsylvania Transportation Authority (SEPTA) funding crises. SEPTA is a public company; it is responsible for the management of public transport in the Pennsylvania. It is considered as the largest network of transit' of North America and serves a population of over 15 million people. In 2012, attendance has exceeded 2.6 billion trips, and daily attendance week exceeds 8.5 million users. In total, the SEPTA operatse a fleet of 5,700 buses, 8778 cars and subway trains and 736 stations. Transportation management is an integral part of business like other functional areas. Transportation costing requires effective maintenance of costs and expenses are expected. There is a need of classifying cost effectively and efficiently. .

There has been huge increase in the transport system and the transport industry of USA. America has been growing since many years. With the increase in the transportation system, there have been many changes in the regulations that govern the transport system of the country. There are different modes of transport system that are comprised of different mediums of transport including rail, air, water networks and roads. The major transportation system is dependent on the automobile in order to travel shorter distances and longer distances. Airplane or railroads are some other modes of transportation. The evolution of the transportation system has a great history in USA. The evolution of technology has brought the transportation from the carts to the automobiles and further to the mass transit system (Allen, 1979).

It has been noticed that over the next 20 years, SEPTA will need approximately $8.5 billion to pay for additional state of good repair projects. That cost combined with the backlog means that the total state of good repair cost from 2011 through 2031 will approximately be $13.2 billion. This is more than 43 times the size of SEPTA's current annual capital budget. In addition, if SEPTA keeps investing in state of good repair projects at the currently programmed funding levels, the backlog will grow from $4.7 billion to $8.6 billion by 2031.

Budget and Financial Difficulties

The SEPTA budget is a concern for the company as a whole. It is also a significant concern for the city of Southeastern Pennsylvania, residents of the state and local government. Based on 2012 figures , the SEPTA's debt was about $31 billion. While the operating loss totaled $860 million in 2011, and $ 337 million in 2012. The budget of the SEPTA is structurally deficient. The increase in expenses during the period 2000 - 2004, coupled with the economic downturn that has led to a significant increase in the burden of debt. The fiscal problems faced by SEPTA have multiple causes. First, the company can not operate on the basis of the income of tickets. For illustrative purposes, the income of tickets represents only 41% of the expected revenues in the 2013 ...