PHILADELPHIA (September 4, 2026) – Moody’s Ratings has revised its outlook for SEPTA from negative to stable – a direct result of the Authority’s improved Fiscal Year 2026 financial performance.
“This revision occurred without any change to the funding picture in Harrisburg during FY26, and was driven by SEPTA’s responsible and effective financial management,” said SEPTA Board Chair Kenneth E. Lawrence Jr. “It demonstrates to investors, policymakers and other stakeholders that SEPTA is making measurable progress and is a sound investment.”
Last summer, amid a budget shortfall that forced temporary service cuts, Moody’s assigned SEPTA a negative outlook. It reflected concerns that SEPTA’s deteriorating operating performance could eventually put pressure on bonds secured by dedicated state and federal funding sources.
Moody’s has now revised the outlook to stable, citing better-than-expected financial performance in FY26, driven by management’s disciplined approach to controlling expenses, expanding revenue and reducing the Authority’s structural deficit.
“This action represents a meaningful validation of our financial strategy from the global authority on credit and risk management,” said SEPTA General Manager Scott A. Sauer. “We will continue to find innovative ways to improve efficiency and manage our resources responsibly, as we work to transform SEPTA from back-to-basics to best-in-class.”
In June, SEPTA’s Board approved a total budget of $2.7 billion for Fiscal Year 2027 – a $1.84 billion Operating Budget and $920.7 million Capital Budget. The Operating Budget reflects the second and final year of the $394 million capital funds transfer approved by PennDOT to support operations.
Thanks to ongoing austerity measures, SEPTA has realized close to $30 million in annual savings, in addition to increased income from advertising, parking and investments. These efforts have reduced SEPTA’s structural budget deficit from $213 million to $192 million.
However, the Moody’s report indicates that over the long-term, SEPTA’s budget gap will be difficult to resolve without further financial support from the Commonwealth or significant adjustments to operations.
To read the Moody’s report, visit the Moody’s Ratings website.
For more information about SEPTA, visit septa.org, follow @SEPTA, or download the official SEPTA app.
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