Mayor Parker wants to cut free SEPTA fare benefit for city workers
Many city positions are vacant and Parker’s mandate that municipal workers return to the office full time has been unpopular. Cutting Key Advantage would remove one tool for attracting new employees.
Mayor Cherelle L. Parker’s proposed budget would slash a benefit that provides free SEPTA passes to city employees, a perk that the administration has promoted as a help in workforce recruiting and retention.
Spending for the Key Advantage program would be reduced to $5 million for fiscal year 2026, which begins July 1, Finance Director Rob Dubow said Wednesday during a City Council hearing. The city is spending just under $9 million for the passes in the current year.
“That is actually continued in the budget but at a lower amount,” Dubow said, addressing questions from Councilmember Jim Harrity.
The administration did not respond to a request to answer questions on the proposed spending cut.
Many city positions are vacant and Parker’s mandate that municipal workers return to the office full time has been unpopular. Cutting Key Advantage would remove one tool for attracting new employees.
Under the Key Advantage program, employers buy all-access SEPTA monthly passes at a steep discount to offer them to their workers, free of charge. It was established in March 2022 to help companies and institutions compete for employees with a novel benefit — while boosting ridership on the transit network.
Penn Medicine, Wawa, and Drexel University were the first participants.
Philadelphia started offering the passes in September 2023, after then-Mayor Jim Kenney made it a focal point of his budget proposal earlier in the year.
About 23,000 municipal workers are eligible for the passes, and about 15,000 use them regularly, according to SEPTA. On average, they take around 330,000 trips monthly, SEPTA says: 78% of the trips are on subways, buses and trolleys and 22% on Regional Rail.
After an introductory discount, SEPTA reevaluates the program every six months and resets the cost of passes for employers, though prices are not allowed to rise more than 10% at a time.
Employers “decide whether to take it on fully or pay for part of it and collect a co-pay from employees,” SEPTA spokesperson Andrew Busch said. The latter has become more common recently as costs have increased, he said.
Last August, amid a severe financial crisis, Drexel University said it could no longer afford to pay for the benefit for employees and dropped out of the program. Before taking that step, the university had been charging workers a $20 monthly co-payment.
SEPTA officials and the city are talking in hopes of reaching an agreement on price that would not require such a deep cut that could unduly increase employee costs, Busch said.
Kenney also launched Zero Fare, the separate program providing SEPTA passes to low-income people, at an annual cost of about $30 million. It was to be a two-year pilot program and then be evaluated for effectiveness. It’s been in effect for around 18 months and 25,000 people can use the passes.
“That was a two-year pilot. The pilot ended and we made the decision not to continue,” Dubow told Harrity, the Council member, during the hearing.
» READ MORE: Mayor Parker wants to defund a program that provides free transit passes for low-income people