Port Authority Facing Deficits

News reports tell us the Port Authority is staring at a $25 million deficit in the current fiscal year, and possibly another $25 million next year. They complain that revenues are down and fringe benefits, especially health care, are rising quickly.

Is anyone surprised? Back in 2008, the Port Authority Board caved to union demands and agreed to a contract with no savings in it other than far distant pension and health care payments. A savings that could be reversed in future contracts.

The union was threatening a strike that could have savaged the local economy and brought massive hardships to transit users and produced highway traffic tie-ups. And as usual, the Authority blinked.

Thus, the Port Authority will now be forced to (a) go hat in hand to Harrisburg to ask for more money (b) raise fares again and/or (c) reduce service and layoff drivers and mechanics. This is what happens when a financially strapped entity fails to do its duty and stand up to unions. But wait. The management is hamstrung because it dares not take a strike for fear of what happens to the economy and the fact that it might end up losing some of its already slim user base.

So the problem really goes back to Harrisburg and the state government where there is no real effort to take away the transit workers’ right to strike. Consequently, severe financial problems will continue. As we have recommended many times, the Port Authority must stop filling vacancies and when 20 positions open up due to attrition and retirements, it should outsource routes those jobs supported. Over time, the Authority could make a significant dent in the ability of the transit union to overpower the Board in contact negotiations. We will know the Authority is serious when they announce a complete hiring freeze.