Gov. Josh Shapiro approved a plan Monday giving SEPTA permission to access up to $394 million in capital assistance funds, staving off transportation cuts for two years.

The approval comes in the wake of a Common Pleas Court decision Sept. 4 ordering SEPTA to reverse all service cuts and halt any future cuts the authority had planned to cope with its funding crisis.

The court ruling came Thursday evening, following the second hearing for a lawsuit brought by Philadelphia attorney George Bochetto on behalf of consumer advocate Lance Haver and two SEPTA riders, who argued that SEPTA’s financial crisis is manufactured.

In his closing argument, Bochetto proposed an order reversing SEPTA’s cuts for 60 days. However, Judge Sierra Thomas Street’s order did not have a set time limit, instead ordering SEPTA to immediately reverse all cuts “until further order of court.”

The lawsuit argued SEPTA’s cuts disproportionately affected minority and low-income riders, with less of a burden placed on wealthier suburban riders.

After the hearing, SEPTA General Manager Scott Sauer said, “We’re not denying that [the cuts] are certainly hurting residents in the city, but we are arguing that it’s hurtful to everyone. … We’re not disputing the impact on low-income or minority riders. We know it’s there, we’ve said so in our equity analysis. We are trying to minimize those effects to the best that we can.”

The cuts were implemented amid a political stalemate in the state legislature, with the Democrat-controlled House and Republican-controlled Senate failing to reach a funding resolution.

Democrats, including Gov. Josh Shapiro (D), proposed increased funding for SEPTA amid its more than $200 million operating budget deficit. Republicans in the Senate pushed back, most recently with a proposal by State Sen. Joe Picozzi (R) to temporarily fund SEPTA by diverting money from the Public Transportation Trust Fund, which is typically used for safety upgrades. Picozzi’s proposal was rejected by House Democrats.

During the trial, Bochetto repeated that the state legislature’s budget is passed late almost every year. He argued the 60-day order should provide the legislature enough time to pass a budget while not burdening riders.

After Thursday’s hearing, Bochetto said, “We’re asking that they utilize the stabilization fund during this interim budgetary process to prevent rollbacks. … In 60 days, if the budget has been passed and all the money has been provided, then we don’t need the injunction.”

Bochetto’s team argued SEPTA could utilize its Service Stabilization Fund to continue operating while the legislature seeks a resolution.

What happens next?

The order allows the proposed fare hikes to remain in place while preventing service curfews, station closures, service reductions, and eliminations to any bus, regional rail, special service, or paratransit route.

On Aug. 29, the judge issued a temporary injunction ahead of the Sept. 4 hearing, blocking the 21.5% fare increase, followed by a 20% service cut that would have occurred on Sept. 2, while leaving previous cuts in place.

Thursday’s order allows SEPTA to enact the proposed fare increase while forcing the agency to reverse the Aug. 24 cuts, including a 20% service cut with 32 bus routes eliminated, 16 shortened, and service cuts to Metro and Regional Rail lines.

SEPTA announced they will restore service on on Sunday, Sept. 14, and implement the 21.5% fare increase.

In reaction to the decision, Robert Previdi, policy director for the Save the Train Coalition, told the Local, “I’m glad to see service will not be cut, but I don’t think this is a sustainable option. We need the state to take transportation funding more seriously, like our economy depends on it. And this should not be a partisan issue. Republican districts rely on roads, bridges, and highways that need maintenance, repairs, and upgrades just as much as our public transit systems do. It’s been over 40 years since there has been a major investment in our infrastructure and we’ve got rail cars on Regional Rail that are over 50 years old and four of them have burned up in fires in just the last six months. We need real investment dollars that push the agency to improve frequency and reliability so that more people ride. The less riders, the more traffic we will see.”

He added, “It is not a smart move to take funds meant for capital improvements to plug a hole in the operating budget. Yes, it is a risk, but since we’ve got no choice, I understand why it’s being done. But I hope this will awaken more people to the importance of fixing our transit system so that more people use [it]. ... Our roads and highways were not designed to handle so much traffic. We have a built-out rail system that is severely underutilized, why not make the highest and best use of it to keep traffic down?”

SEPTA’s argument

In response to Bochetto’s and Senate Republicans’ emphasis on SEPTA utilizing the stabilization fund, Sauer said, “We are using it and we’ve made no misstatements about that. We are withdrawing $113 million from the fund to close the budget gap at the end of this fiscal year. We use it every day. … We’ve already withdrawn more than $200 million from that fund since July 1.”

During the hearing, Jody Holton, SEPTA’s chief planning and strategy officer, said the loss of the fare increase from the initial injunction costs the agency over $500,000 per week. In addition, SEPTA will issue a $1.25 million refund for monthly passes purchased ahead of the injunction.

She also argued SEPTA’s implementation of cuts was necessary and executed to affect the least amount of riders, saying SEPTA followed guidelines mandated by the Federal Transit Administration so as not to disproportionately affect minority and low-income riders.

With SEPTA’s fiscal year budget planned around the cuts, Sauer said, “Every expense that we now have to incur beyond what we budgeted for will come from the [Stabilization Fund].”

SEPTA has not yet announced if it plans to appeal the order, with Sauer saying after the hearing, “We’ll consider all options.”

Tommy Tucker can be reached at Tommy@chestnuthilllocal.com.