Commission Will Have to Tackle Transit Costs

Commission Will Have to Tackle Transit Costs

In the transit presentation made to the Transportation Funding Advisory Commission (TFAC) on Monday (by officials of PENNDOT) it was stated "let’s face it-transit agencies are not private companies and do not make a profit. Public transit has both a business and a social mission".

If the commission accepts this thinking-the implication that transit agencies are not under the expectation to lower costs and should be granted special status because they deliver a greater social good-then there will never be resolution to the continual crises at transit agencies like the Port Authority (PAT).

Thanks to state-granted monopoly power which shields them from competition and prevents them from acting like private companies and a seemingly never-ending series of bailouts and one-time fixes, the "business" keeps going on at PAT. How else can one explain the 70% growth in bus operating costs from $6.40 to $10.94 (using operating expense per vehicle revenue mile) over the time frame of 2000-2009 according to data from the National Transit Database? Or the explosive and crippling growth in worker benefit costs at the agency over time?

The 2009 data shows that of the nine transit agencies serving Pennsylvania’s major urban centers PAT’s bus cost was second only to SEPTA ($13.06). Other agencies fill in the range from $7.31 in Altoona to $5.93 in Scranton.

What about a transit system where a premium is placed on competition and contracting out? The Regional Transportation District in Denver has been outsourcing 50% of its bus service for a long time now and shows bus operating costs of $7.73 in 2009, about 30% lower than PAT, 40% lower than SEPTA. In 2000, according to the National Transit Database, their cost was $5.62, meaning while PAT grew 70% the RTD grew 38%. While there is no profit involved there certainly was an impact from market forces.