Flexible Healing of PAT is No Cure

"In the future our limited highway dollars should first be used to repair our existing roads and bridges, not close holes in the transit budget"—Southwestern Pennsylvania Commission (SPC) Resolution 02-05, January 2005. This statement was issued after the SPC had just made another shift of highway funds to the Port Authority (PAT). Now the Governor is talking about moving highway funds for PAT again. Will SPC acquiesce?

The SPC, the agency charged with administering Federal transportation dollars in the region, must have a feeling of déjà vu. Some five years after trying to make a case that transportation funding should not consist of robbing Peter to pay Paul the Governor noted this past week in front of the Senate Transportation Committee that he would be willing to take money designated for roads and bridges and give it to PAT to close its anticipated FY2011 budget gap of $47 million. How much will be needed next year and the year after was not mentioned.

The action is referred to as "flexing" and SPC is no stranger to being asked to carry it out. They did it in November of 2003 ($10 million), January of 2005 ($3.5 million), March of 2005 ($25.3 million) and July of 2005 ($112 million). The last—and largest—flexing came about when the state just happened to luck into $666 million in Federal money that came from unspent allocations and reimbursements. Altogether $150 million was flexed to PAT over a two year time period. The generosity to PAT was also displayed in 2006 when SPC approved diverting Federal congestion mitigation funds for the North Shore Connector. That sum represents a lot of road and bridge repair work in western Pennsylvania that did not happen. It is also important to remember that Pennsylvania officials have been talking about a capital funding deficit for roads and bridges for many years. Yet there was little resistance to flexing the money needed for roads to mass transit.

Flexing the money was ostensibly done to avoid the disastrous effects of route cuts, layoffs, and fare hikes that would have been the result of a PAT shortfall and to give the Governor’s Task Force time to come up with recommendations of what to do about funding the state’s road and transit needs. In fact, it was actually a bailout of PAT because there was no likelihood of labor concessions during subsequent contract negotiations. The threat of a strike prompted the Governor to step in with the flex money to avoid the ugly and disastrous spectacle of prolonged strike of drivers and mechanics.

An outgrowth of all those machinations was Act 44, which contained the ill-fated provision to toll Interstate 80 and use the proceeds for transportation. As predicted by the Allegheny Institute the tolling request was summarily rejected by the Federal government. Plans to toll I-80 have to rank as one of the worst policy decisions in the state’s history. A phone call to the Highway Administration could have prevented the years of unseemly and costly maneuverings to gain approval to toll the highway.

So here we are again: PAT is threatening to cut routes, layoff workers, and raise fares all the time demanding that the state come up with a long-term fix. But they certainly would not object to having another flex action take care of the immediate and daunting problems headed their way.

So what would be the downside of just taking $50 million in road money to get them through this tough time and to give the state some breathing room to deliberate on a way to fund roads and transit? One needs to look back no further than the 2005 flex action to see the reason not to go down the flex road again.

Reacting to the announcement that the state had come into the $666 million in newfound money, the Institute wrote in a Policy Brief (Volume 5, Number 10) that "it would be very tempting to forget the real problems at Pennsylvania’s major mass transit systems and wait for the Governor’s new task force to make recommendations after the 2006 elections". Noting PAT’s poor performance on transit operation indicators compared with other systems around the country, especially its extraordinarily high driver pay, outrageously generous health and retirement benefits, the Brief made five recommendations for the Legislature to insist upon before more money was handed out.

They included eliminating the most underused routes, hiking fares to $2 and providing a voucher for low-income commuters, shutting down the Wabash tunnel (used for passenger vehicles), ending the North Shore Connector project, and outsourcing as much of their operations as possible. With the exception of re-evaluating routes and hiking fares, no other steps were taken, then or since. The large capital projects roll on, despite the fact that they either compete with the agency’s mass transit mission (Wabash) or that they may not have the means to operate them once built (Connector).

Look at what transpired in 2008: the transit system was nearly shut down by a bargaining impasse and walkout that arose over disputes about the generous health care benefits enjoyed by union employees. Note this occurred just three years after the previous settlement despite the flexing and cost saving recommendations of the Governor’s Task Force that were blithely and with impunity ignored by PAT.

There can be no doubt left. PAT has a spending problem, not a revenue problem. PAT is convinced that someone will continually ride to the rescue when their profligate ways outstrip their available resources. And PAT’s conviction will be borne out once more if highway money is flexed once again. Next year, the story will be the same, only worse. Learning is not taking place.

The Legislature needs to do two things immediately. First: rewrite the law that created the Port Authority to take away PAT’s transit monopoly in Allegheny County. Second: repeal the right of transit workers to strike. PAT will never solve its money problems until those two things are done. It will simply continue to eliminate service, raise fares, and beg for money from the state as it gradually becomes nothing more than a collector of state revenue to pay retiree benefits. This fiasco has gone on long enough. It is a severe indictment of state government that it has been an ongoing enabler in PAT’s slide into the financial debacle.
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EricMontarti, Senior Policy AnalystJake Haulk, Ph.D., President
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