Friday, July 13, 2007
Kudos to the Chief Executive’s Stance on Cost Saving
Just when it appears the Port Authority would receive yet another bailout from state taxpayers, along comes Allegheny County Executive Dan Onorato to attach heavy strings to that money. Under the proposed budget agreement, which still has not been finalized, the Port Authority (PAT) would receive an extra $55 million from the state on top of a base subsidy of $135 million. But if PAT wants more money, Onorato is going to hold their feet to the fire and require the agency to reduce labor costs. For that, the County Executive deserves a pat on the back.
The catch to this additional state money is that Allegheny County would have to provide a partial local match for the funds—an extra $5 to $10 million above the $25 million the County currently provides. Where this money would come from, most likely from new tax streams, is up for debate. But what is apparently not up for debate is the County Executive’s intention to withhold any additional funding until PAT cuts costs, specifically the compensation structure of union and nonunion employees. According to Onorato, PAT will “not get a penny more of revenue until they fix the cost structure….”
As we have chronicled through our research, costs at the Port Authority are far out of line with other transit agencies around the country. PAT employees have the nation’s highest transit worker wage rates adjusted for the cost of living. Moreover, the health benefits for active and retired employees are spiraling completely out of control. So far, the union has been adamant in resisting any meaningful compensation cuts or efficiency enhancing improvements.
To no one’s surprise, Onorato’s stand has drawn the ire of the union president. Obviously making the necessary changes to lower costs and improve efficiencies will be a daunting task. Let’s hope the County Executive will continue to stand firm in his push to achieve much needed changes at the transit agency.
The catch to this additional state money is that Allegheny County would have to provide a partial local match for the funds—an extra $5 to $10 million above the $25 million the County currently provides. Where this money would come from, most likely from new tax streams, is up for debate. But what is apparently not up for debate is the County Executive’s intention to withhold any additional funding until PAT cuts costs, specifically the compensation structure of union and nonunion employees. According to Onorato, PAT will “not get a penny more of revenue until they fix the cost structure….”
As we have chronicled through our research, costs at the Port Authority are far out of line with other transit agencies around the country. PAT employees have the nation’s highest transit worker wage rates adjusted for the cost of living. Moreover, the health benefits for active and retired employees are spiraling completely out of control. So far, the union has been adamant in resisting any meaningful compensation cuts or efficiency enhancing improvements.
To no one’s surprise, Onorato’s stand has drawn the ire of the union president. Obviously making the necessary changes to lower costs and improve efficiencies will be a daunting task. Let’s hope the County Executive will continue to stand firm in his push to achieve much needed changes at the transit agency.
