PA: The beginnings of a transit deal? Pa. House Democratic leader is open to using a transit account to help fund SEPTA -- with conditions

Could compromise be forming in Harrisburg?

With Pennsylvania's state budget nearly two months overdue, forcing SEPTA to implement service cuts without additional funding, lawmakers may, at last, be finding some common ground over funding mass transit.

On Tuesday, House Majority Leader Matt Bradford (D., Montgomery), a top Democrat involved in budget negotiations, expressed an openness to using a fund suggested by Senate Republicans to support mass transit — becoming the second top Democrat this week to show new interest in the fund after House Democrats and SEPTA largely panned its use earlier this month.

Bradford said in an interview Tuesday he is open to using the Public Transportation Trust Fund, a special fund of approximately $2.4 billion — on the condition that there is a recurring revenue stream, and a mechanism to backfill any funds used. Pennsylvania's state budget was due June 30 and is now in its ninth week overdue, with mass transit funding as one of the major holdups to reaching a final deal and sending tens of billions of dollars out to Pennsylvania schools, counties, and more.

Bradford's comments and change of course come after Gov. Josh Shapiro told reporters Monday that he supports using the fund as part of a "broader package," and as top leaders at the closed-door budget negotiation table shift their tone on a compromise transit funding deal with the GOP-controlled Senate following SEPTA's implementation of major service cuts, with fare hikes on the horizon.

Democrats' willingness to use the fund marks a sign of compromise between the two sides, which have grown increasingly combative. Democrats still oppose the Senate's original plan, which did not intend to backfill any capital funds and would have diverted $412 million in mass transit capital reserves to road and bridge repairs.

"There is a big difference between if there is some available funds for the short-term up front, but there is not the ability without replenishing [the PTTF] and a sustaining and recurring revenue to do that as a long-term solution," Bradford said. "Just raiding capital funds, period, does not accomplish that."

Until Monday, Shapiro had appeared to oppose using the fund, and his transportation secretary told a state House committee that "every single dollar" in the fund "has an expected use." House Democrats, for their part, quickly rejected the Senate proposal by voting it down in committee, and Bradford initially said it was a nonstarter.

Following weeks of escalating political attacks from both parties as SEPTA's service cuts went into effect on Sunday, the top negotiators — Shapiro, Bradford, and Senate Majority Leader Joe Pittman (R., Indiana) — have indicated they may be on a path to an overall state budget deal that would send additional funding to SEPTA and other mass transit agencies after all.

"We are willing to consider everything to get this accomplished," Bradford added.

Pittman, a top critic of SEPTA's management who has opposed additional funding for the beleaguered agency, said Bradford's and Shapiro's change of tune is "welcome news."

"If the administration and the House Democrats are willing to use existing dollars in the PTTF program to fund transportation, then I believe that is an important step to figuring out a path forward," said Pittman, the main negotiator for Senate Republicans in budget talks.

"They tried to push us around, and all of a sudden now they're seeing things a little differently," Pittman said Tuesday, echoing his fiery speech on the Senate floor earlier this month, where he postured that rural areas have been overlooked by Pennsylvania's cities, an argument that Democrats quickly rejected.

"I'm very encouraged that, perhaps, they've changed their tactics from just trying to push around and bully us to figuring out a way to embrace some of the policies that we put forward in a thoughtful manner."

Mass transit funding — with a particular focus on SEPTA, Pennsylvania's largest public transportation system, which receives more than $1 billion from the state each year — has been among the top sticking points in budget talks. But this week, a glimmer of agreement seemed to emerge, as Pittman, Bradford, and Shapiro all expressed interest in using a blend of revenue streams as part of a final deal.

The other issues ahead

If leaders are able to reach a deal on the transit portion of a final budget deal, there are still a number of issues they need to work through before a budget is passed and any funding can be released to SEPTA and other agencies.

Top budget negotiators still have to agree on a total spending number, as well as whether and how to regulate and tax so-called skill games, a proposal that is widely seen among lawmakers as a top potential recurring revenue source to fund mass transit.

What's more: Pittman will have a challenging time selling any state budget to the most conservative members of his caucus. For example, Sen. Dawn Keefer (R., Cumberland), who led the House Freedom Caucus before her election to the state Senate, has pledged not to vote for a state budget higher than $47.9 billion, going so far as to take a flamethrower to a replica of Shapiro's $51.5 billion budget proposal in a social media video earlier this year to emphasize her stance.

Other GOP senators have opposed state budgets in previous years for various reasons, and there remains a variety of opinions among GOP senators on how to tax and regulate the skill game machines that have proliferated around the state by the tens of thousands and remain untaxed.

Pittman acknowledged the diversity of opinions in his caucus in an interview Tuesday, and said he might not be able to get all 27 members of the Senate GOP to support a final budget deal. Any budget deal requires at least 26 votes to pass the 50-person Senate, though the deal is likely to have bipartisan support because it is being negotiated with the Democratic House and Shapiro.

"To me, what we need to be focused on is making sure that our base principles are part of this overall budget, with the recognition that we are negotiating with the House Democrat majority and a Democrat governor," Pittman said. "The budget that we come to an agreement on will not be viewed as the ideal budget, certainly in my own mind, let alone within various members of our caucus."

Among the priorities for GOP members are fiscal responsibility and accountability, Pittman said in an interview earlier this month.

"At the end of the day, we don't want a lot," Pittman said at the time. "We want a fiscally responsible product. ... The bottom line is, we want to make sure that we don't spend more than we need to, and that we make sure we're trying to set ourselves up for a long-term fiscal trajectory that is stable."

In the Democratic-controlled House, Bradford may also have a difficult time selling any final deal on skill games as a recurring revenue source for Philadelphia Democrats, some of whom broadly oppose that the slot-machine look-alikes be legal at all, since they are concentrated in poor Black and brown neighborhoods, and argue that the machines are predatory and attract violence across the city. However, Philadelphia lawmakers may be more willing to compromise as urgency for a budget deal has increased among regional Democrats to provide relief to SEPTA and reverse the service cuts and the transit agency's "death spiral."

Negotiations continued into Wednesday. Bradford and Pittman were both absent from the Capitol earlier in the week; Pittman hosted a fundraiser in Armstrong County on Monday, while Bradford was in Pittsburgh. House Speaker Joanna McClinton (D., Philadelphia) was also hosting a fundraiser in Pittsburgh on Tuesday.

Correction: An earlier version of this story incorrectly stated how much money would be diverted to road and bridge repairs under the Senate GOP plan. It would send $412 million to repairs.