jfrey40535 wrote:I don't exactly know the difference between the operating budget and the capital budget. I know what they are, but what is the difference in how the funding is allocated? What pays for capital projects? Where does that money come from. As far as I'm concerned, its all the same pot.
Nope. It's definitely two distinct pots, and it's important to understand the difference. The operating budget pays for running the buses and trains and trolleys (e.g. diesel fuel, conductors' wages, Amtrak trackage rights, staffing cashier booths, police ...), and for routine maintenance of vehicles, tracks, and stations (cleaning, snow removal, painting, ...).
The capital budget pays for one-time expenses like buying trains, building stations, and rebuilding the El. The best way to understand is to view a copy of the capital budget on
http://www.septa.org and see the kind of stuff in it.
Now there's something of a gray area containing stuff like heavy overhaul of vehicles, lease payments, and operating expenses related to a capital project (like running extra buses while a major project shuts down a rail line). Those expenses may be shifted from one budget to another, depending on which has more funding problems. This is an old practice, and one that SEPTA has by necessity been good at--the treasurer's department, where Faye Moore worked before being named GM, is one of the few parts of SEPTA that functions pretty well.(^)
Now, the two biggest sources of funds for the operating budget are the farebox and the state. The counties also contribute a share, and the feds contribute a small and decreasing share. You can look up the exact numbers in the budget--they're quite easy to find.
For the capital budget, the largest source of funds is the federal government, with the state paying the next largest share, and the counties the least. Fare revenue goes entirely to the operating budget and not to the capital budget(*). The exact breakdown depends on the particular expense and the particular federal program funding it, but the typical split is 80% federal, 16.7% state, and 3.3% local.(#)
If the capital budget is the same one that put those million dollar art sculptures atop Frankford Terminal, then there is definitely abuse going on. Regardless of what budget paid for that, that money could have gone to improved service. How do metal art sculptures in Frankford improve transit quality? If they wanted to make the place better looking, they should have planted trees and flowers to help erase the ghetto look.
I'm not sure on this, but I presume there was a city quota mandating the art spending, as there is on other major construction.
Not to mention, the $65+ million that was spent for the never-to-run Rt 15 trolley could have erased this year's budget deficit. I hate to say that, but the thing is never going to run.
Nope. The 15 infrastructure is definitely a capital expense, and the deficit is in the operating budget. Raiding capital funds to pay an operating deficit, especially a structural deficit, is bad public policy, and except in certain circumstances (like part of papering over last year's deficit) is gonna get you in trouble.
^--I'll tactfully reserve comment on how much of that translated into effectiveness as General Manager.
*--with the exception of the bit of the operating budget that gets paid as facilities rent to the City of Philadelphia--the City plows that into the capital budget as part of their share of matching funds.
#--assuming this split would apply despite clearly stated DOT policy that the feds would pay no more than 60% of the cost of a New Starts project is what caused FTA to reject SEPTA's Schuylkill Valley Metro plan.