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Yesterday, the Southeastern Pennsylvania Transportation Authority (SEPTA) board approved fiscal-year 2007 operating and capital budgets totaling $1.42 billion.

The $991 million operating budget is $39.2 million, or 4 percent, higher than FY2006’s budget primarily because of increases in wages and costs associated with fuel, materials and services, and health care.

SEPTA is anticipating a $50.3 million budget shortfall, which might be resolved if the state legislature approves a long-term subsidy source for public transit agencies. In February 2005, Gov. Edward Rendell announced a plan to flex federal transportation funds to state transit agencies to address budget shortfalls for the remainder of FY2005, all of FY2006 and first-half FY2007. If a long-term funding source is not available by December, SEPTA officials will have to find an alternative means to make up the deficit.

Meanwhile, the authority’s $438 million FY2007 capital budget includes funds for the Market Street Elevated reconstruction project, Regional Rail Route R5 Paoli Line improvements, a rail station and parking improvement program, and new Silverliner V regional rail cars.