Issue Summary (Updated January 2011)

Another Bailout for PAT

The Issue:

The Port Authority of Allegheny County has been bailed out once again.  What's to be done once this money is spent? 

What We Know:

After doing it several times in the last five years, and after publicly pledging not to do it again, the board of the Southwest Pennsylvania Commission (SPC) which steers transportation money for the region, caved in to the pressure to avoid another financial catastrophe at the Port Authority.  This was ostensibly done to buy time for the incoming Governor and Legislature to find a long term revenue fix for the agency.

But as we have pointed out time and again PAT has a spending problem, not a revenue problem.  It exhibits operating costs that are out of line with other mass transit agencies around the country; its drivers enjoy high wages and benefits that are far out of line with other local governments, other transit agencies, and the private sector.  It continues to engage in a "building binge" taking on projects that are not justified in terms of opportunity costs or return on investment.  It operates as a monopoly with no competition from other regional agencies or private carriers. 

In 2012 the agency's labor contract expires and with it comes a promise that there will be threats of a shutdown of the system by a labor strike should the PAT board and elected officials try to get savings from the transit union. 

Recommendations:

It is quite clear what has to happen.  The Legislature should be thinking about additional oversight, ways to allow PAT to enter bankruptcy to ease legacy costs, a hiring freeze, taking away PAT's monopoly, and removing the right for transit workers to strike.