Alternatives to the Port Authority’s Planned Service Cuts

Facing a budget deficit of $47 million the Port Authority (PAT) says it will cut service hours by 35 percent, lay off 500 employees and eliminate service to 50 communities. The reasoning behind the 35 percent service reduction when projected revenues are only off by only 14 percent has not been adequately explained. One explanation is surely the outrageous level of health care and other benefit costs, especially those related to retirees that cannot be cut.

In any event here’s a better plan than the one PAT is talking about. First, the Legislature and the Governor should remove PAT’s monopoly over transit service and order the agency immediately to allow other transit providers to offer service, especially in those areas where PAT is planning to eliminate service. Moreover, the Legislature should eliminate the right of transit workers to strike.

Finally, PAT should ask all City and County officials, as well as civic and business leaders, to admonish the transit unions to make immediate pay and benefit concessions in order to save many jobs and lower the number of service hours that have to be cut. The retirees should be asked to make some sacrifices as well.

The continual slashing of service is no way to run a railroad, especially when PAT has no competition to fill the service gaps.

The lesson here is that government granted monopolies of a needed service whose employees are permitted to strike will become bloated, grossly inefficient, a heavy burden on taxpayers and a poor excuse for a service provider. That is PAT in a nutshell.

Tale of Two Transit Authorities

Lost amidst the discussion of the Port Authority’s annual ritual of talking about service cuts, layoffs, and fare hikes as a result of what they see as not enough revenue was the fact that the neighboring Westmoreland County Transit Authority hired a new contractor-from out of state, no less-to operate and maintain its fleet of buses. The WCTA has contracted out its bus service since 1978 due to the fact that the law that incorporated it prohibited it from directly operating buses.

The WCTA had to choose between seven bidders for its business, and the winner has stated that it will offer jobs to all 45 current drivers and mechanics without changing their current benefits. An Allegheny Institute survey of the WCTA contained in a 2005 report found that their drivers’ wage was well below that of PAT.

The outcome of the contractor change? According to the director of WCTA there will be no fare increases or changes to bus service and routes. He also said "I anticipate that the public will not notice any difference."

Contrast that with the status quo at PAT and it is hard to see how the union’s lockdown on mass transit in Allegheny County can be justified. If PAT leadership had refused to back down from its goal of outsourcing a portion of operations it would be much farther along on rightsizing operations than where things stand today.

Port Authority Irresponsibility: A Never Ending Story

Is history repeating itself?  Later this week the state will convene a meeting in the eastern suburbs of Allegheny County to come up with a fix for roads, bridges, and mass transit in the wake of the none-too-surprising rejection of placing tolls on Interstate 80. 


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What is the Next Fix for PA’s Transportation Needs?

"…tolling I-80 from border to border is a highly contentious issue and could face substantial difficulties in obtaining Federal approval"-

Allegheny Institute Policy Brief, August 28, 2007

As we pointed out for the better part of the last three years, the state’s plan to ask the Federal government to allow for tolls to be placed on Interstate 80 in order to generate revenues for the state’s roads, bridges, and public transit systems was going to be a long shot. At the time there were other states waiting for permission to levy tolls on previously un-tolled roads, but that was for upgrading and maintaining the roads themselves, not for other transportation needs. That goes without mentioning the negative economic impacts placing tolls on I-80 could have had in the northern corridor.

Near the close of 2007 we suggested that "a major overhaul of the [Act 44] or, better yet, a complete rescission seems to be the best option for Pennsylvania". Yet the state pressed on, ignoring a letter from the Federal Highway Administration (FHWA) in December of 2007 that the plan was not well thought out; the plan was rejected in September of 2008, yet the following May Turnpike officials still felt the application was "viable" and was hoping for a more favorable response from the Obama Administration. That hope was dashed by yesterday’s rejection.

So what follows this episode? The state House Transportation Chairman has said that Act 44 was "plan B" and now there is an indication a special session will be called by the Governor to address possible solutions. Shouldn’t that have been in the works in September of 2008? How did they not get the message?

All Hail the Port Authority’s Alleged Cost Savings

For sure, the heading is a bit tongue in cheek. In the latest press announcement, the Port Authority says through management efficiencies it has cut another $10 million from the cost of the North Shore Connector, bringing the total cost reductions since last May to $24 million. The estimate of the final cost of the project is now placed at $528. Of course, that assumes no unexpected cost overruns on the remaining 30 percent of the project-a big assumption.

What the Port Authority assiduously avoids telling us is that the final cost is still nearly double the estimated cost. In February 2004, the price was said to be $363 million. But then they cut the convention center leg and other elements of the project. These cuts were said to save $80 million. Thus, the project cost should have been lowered to $280 million and that means the $528 million new final estimate is 89 percent above the original estimate of the project’s cost.

Moreover, by dropping the convention center leg of the Connector a large and disproportionate fraction of the putative benefits of the project were lost. The per rider cost for a round trip on the North Shore Connector over its first 20 years will be $45, assuming the ridership forecast is accurate. It would be cheaper to provide limo service from the North Side to Downtown.

And so it goes with this ill-conceived money wasting boondoggle.

Towns Board the Transit Study Bus Again

Responding to a desire to spur high density development near transit stops, the state created legislation allowing for "Transit Revitalization Investment Districts", TRID for short, to encourage it. Soon after the South Hills communities of Mt. Lebanon and Dormont received funds via the County’s Redevelopment Authority (the authority received $225k under TRID) to analyze and study the potential for such development.

Among other things, the 2007 study showed that the towns had both lost population during the study period but that the losses were more pronounced in areas close to the transit stops. Hasn’t one of the long time arguments of transit advocates been that transit generates its own demand as people realize the benefits of being close to stations?

Apparently not dissuaded by what the first study said, now comes word that they are going back to the well once again for $200k ($150k for Mt. Lebanon, $50k for Dormont) to "fund preliminary engineering for development". The money for the study would come from the Community Infrastructure and Tourism Fund, an $80 million pot of money funded by gaming money and set aside for the County for the purpose of funding "construction, development, improvement, and maintenance of infrastructure projects" according to the Gaming law.

Was that what the Legislature intended when the money was set aside? With such broad language it is hard to say so. Now it is possible that close to $500k will have been spent to determine if such development is feasible. A quick look at the nearby Castle Shannon stop, where a developer has been trying for years to get a high density transit development done, could have saved some money.