County Executive Vows to Fix Port Authority

Member Group : Allegheny Institute

(May 29, 2012)–Allegheny County’s Chief Executive told the Tribune Review that changes are coming for the Port Authority (PAT), either within the existing structure or in a new structure—no indication has been offered as to what that new structure might be.

In that interview, the Executive indicated the agency needs to do more cross training, i.e., between bus drivers and light rail operators. He says more advertising revenue is needed and that more corporate dollars to extend the free fare zone to Station Square would be a good thing.

Cross training is not a bad idea, but requires union agreement. And there are many fewer light rail operators and bus drivers so it is not likely to do much for cutting costs. It will almost certainly create more overtime pay. What’s worse, offering more free rides on the light rail system will worsen after event peak demand and cause long wait times for service. The recent experience with after game and concert crowds all showing up at one time should have been a serious reminder of the capacity limitations of the light rail system.

In fact, the difficulties facing PAT go far too deep for simple cosmetic changes to have significant remedial effects. What we now have at PAT is analogous to a car with an engine that is sputtering from bad ignition problems, has exhaust valve leakage, is burning oil and wasting fuel and needs a massive overhaul or replacement. The Executive’s proposals are the equivalent of rotating the tires, washing and waxing the vehicle and maybe adding some water to the cooling system.

If PAT were a private entity, it would have filed for bankruptcy long before now. It faces insurmountable legacy and compensation costs that cannot be avoided because of labor contracts entered into over the decades. Any meaningful solution for PAT must address the legacy and compensation cost problem, including reforms that slash the current deficits and set up a system to avoid a repeat of what has happened to Authority finances.

Unless the state approves a change in law to allow PAT to declare bankruptcy, there only three options: (1) massive, permanent voluntary concessions by retirees on health and pension benefits along with reductions in future retiree benefits and wage costs by current employees, (2) huge and expanding annual increases in state taxpayer funding to avert disastrous service cuts, or (3) disastrous service cuts. Substantial voluntary concessions on retiree benefits and employee compensation rest with the unions—they are not likely to happen. Whether the state will abandon its firm opposition to handing more dollars to the Authority is anyone’s guess.

In addition to allowing bankruptcy the Legislature needs to set in motion a set of changes that will prevent the return of a situation such as PAT now faces. That would include eliminating the right of transit workers to strike, requiring the Authority to begin privatizing bus service, and allowing competition from regional transit agencies and private companies.

Until these things are done, PAT will never be able to operate as an efficient, cost effective transit system Allegheny County residents should expect to have.

The Executive needs to be working with the Governor and Legislature to effect some meaningful changes that will actually benefit transit users and stop the hemorrhaging of money at PAT as well as the threats of work stoppages and huge service disruptions.

History does not offer much hope that any of the necessary steps will be carried out—at least not in a timely fashion. The Legislature has clearly demonstrated time and time again a reluctance to take any action that diminishes or reins in the power of labor unions. Sadly, inconvenienced transit users who are not well informed on the true source of PAT’s financial problems take the side of the unions and push for more tax dollars to cover the extravagant costs labor contracts have created.

Until the role of the right of transit workers to strike and the excessively generous compensation packages are understood by the public, the attitude that it is a miserly Legislature and Governor who are the villains in the story will persist delaying any real solutions to PAT’s woes.

Jake Haulk, Ph.D., President

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