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Southeastern Pennsylvania Transportation Authority (SEPTA) is struggling with a $55 million fiscal-year 2004 budget deficit, and officials believe FY2005 won’t be any better — it’ll be worse.

The authority is projecting a $70 million deficit based on rising health care costs, pensions and ADA paratransit costs, while operating revenues and subsidies are expected to remain flat.

"While we were able to balance our operating budget last year without implementing the sever service cuts and fare changes that were initially considered, without greater financial support … our ability to provide present transit services will again be jeopardized," said SEPTA board chair Pasquale Deon Sr. in a prepared statement.

The authority is working with the state to secure a long-term funding source.

During the past eight years, SEPTA has balanced its budget by cutting jobs, reducing expenses and implementing a fare increase. In FY2004, the authority cut materials and services costs, reviewed internal and external claims more stringently, and increased parking lot fees from 50 cents to $1.

The SEPTA board is required to adopt a balanced budget before July 1.