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Southeastern Pennsylvania Transportation Authority (SEPTA) is once again facing a fiscal-year budget deficit — but this time, the shortfall can’t be made up with service cuts and fare increases, authority officials said.

In order to overcome a projected $70 million FY2005 budget deficit, SEPTA will need a new long-term funding source.

"Any attempt to solve our budget crisis solely with fare hikes and service cuts would greatly reduce the fundamental services of our transit system," said SEPTA General Manager Faye Moore in a prepared statement. "Without a solution by the end of this year, SEPTA will be incapable of providing the transportation services our region requires."

Next month, authority officials will hold public hearings throughout SEPTA’s five-county service area to discuss options on resolving the projected deficit — which won’t include specific fare increases or service cuts. Officials are working with Pennsylvania legislators to acquire long-term funding. If the deficit is not reduced by fall, SEPTA will hold another round of public hearings to propose fare increases and service reductions.

During the past three years, authority execs have worked to overcome increasing budget shortfalls by increasing fares, implementing service reductions and transferring capital funds for long-term improvements to the operating budget. Since 1995, SEPTA has eliminated more than 1,200 positions, reducing its workforce 12 percent.

But rising fuel and health care costs, and flat state subsidy levels have contributed to the authority’s budget shortfalls. If the authority doesn’t receive long-term funding, officials are projecting a $100 million FY2006 budget deficit.

"A long-term solution must be found if SEPTA is to avoid the annual budget crisis cycle every spring," said Moore.

The authority plans to propose a $920 million FY2005 operating budget contingent on obtaining a new long-term funding source.