Tag Archives: monopoly

Pittsburgh Schools Head Asks For Ideas

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Staring at a nightmare of intertwined problems seemingly of Gordian Knot proportions, Pittsburgh’s Superintendent issued a plaintive call for help in the form of ideas about how to solve the conundrum. Joining in a non-helpful way, the Post-Gazette weighed in editorially praising the school for not raising tax rates for twelve years, ignoring entirely the tremendous ongoing decline in enrollment over the period and the increases in other revenue that have allowed the schools to keep spending well above $500 million.

Here’s an idea for the Superintendent. Send to the Board a proposal to set aside $10 million to create a thousand $10,000 scholarships that can be used by parents who wish to send their children to non-public alternatives. With the current spending of over $21,000 per student that would represent a savings for taxpayers. And if the recipient students perform better academically, which most probably will, it is a win-win for taxpayers and students. If demand for scholarships is greater than a thousand, arrange to expand the program year after year.

But here’s the problem that will have to be confronted. With declining enrollment, school employment, including teachers, would be reduced. No doubt there will a lot of screaming by the unions and their supporters about the cuts. If that happens, the parents of school children in the City will be able to see what is really important to the Board-their kids’ education or kowtowing to unions.

The Board will be under intense pressure from unions and the indefatigable defenders of the public education monopoly who have long since forfeited any moral claim to their anti-choice positions. Years after year and decade after decade miserable academic performance and wasted potential of so many students lives. Where do they go to get back the opportunity derived from a good education?

The truly remarkable part of the story is that the union and the defenders of public monopoly education apparently feel no responsibility or remorse. For the unions, it is understandable if not defensible. They are about their members and their power. Students are and have always been secondary. Maybe some individual teachers would like to put students first but they toe the union line when they have to choose between the students and union loyalty.

Bottom line, the Superintendent should make this such an important priority that she will threaten to resign if the Board refuses to consider the idea.

Predictably Wrongheaded Comments at the Labor Parade

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What would a Labor Day parade be without a few choice parade attendee comments demonstrating a lack of economic understanding and faulty logic? Gems from this year include the parade’s theme, a steelworker’s opinion and a head scratcher from a school teacher.

According to the head of the Allegheny County Labor Council "the message of this year is bring our jobs home." Presumably, he means bring back the factory jobs that have gone overseas or to states with a better business climate. He cannot mean teacher, transit driver, or firefighter all of whom provide local government services that cannot be supplied from Taiwan or Alabama.

So what does it mean to "bring our jobs home"? How can they be "our" jobs if someone else has them? Were they "our" jobs before they left? Were they the workers’ jobs? Were they the unions’ jobs? How interesting. Who hires the workers and pays them their wages and benefits? If the jobs belonged to the workers or the unions, how were they able to pick up and move? Clearly, to the extent jobs can be owned by someone they are owned by the employer. The labor effort belongs to the worker, but the job must belong to the owner.

And why did the jobs leave in the first place? Some were lost due to productivity improvements or technological changes that eliminated jobs or made fewer workers necessary. Some were lost due to less expensive or higher quality imports that lowered demand for U.S. made product. Some were lost as companies sought better business and labor climate locations for their production facilities.

If the Labor Council wants to see more job growth in the sectors that have seen huge losses over the decades, the first thing they must do is to quit thinking in terms such as "bring our jobs home." To business owners and decision makers, that phrase conveys the notion that the same old adversarial labor-owner attitude persists. After all, in many cases it was labor’s exorbitant and intransigent demands regarding compensation, work rules, time off and grievance procedures that caused a lot of the jobs to move away. Until labor leaders (as well as rank and file) in the private sector realize what intense competition means and learn to deal with it, the odds of "their" jobs returning will remain extremely slim.

Meanwhile, back at the parade, a steelworker offered the opinion that President Obama needs a second term because it takes two terms in order to get anything done. One has to smile at that in light of the hash the President’s policies have made of the economy, the debt that has piled up, the impending tax hikes, the runaway job killing regulatory environment and the loss of business confidence in the President’s economic leadership. And beyond that, it is amusing to consider how the unions excoriated earlier Republican Presidents at election time arguing they did not deserve a second term even when the economy was in far better shape than it is currently.

Finally-and the cake taker-came from a local teacher who said, "Every child should have the right to learn the same-not the best education their parents can pay for." Here some speculation as to meaning is called for. Surely, it cannot mean that if a parent can afford a high quality education for a child that child should learn the same as everyone else. More likely, the teacher means that public education is needed to ensure that all children have an opportunity to attend school. But like most public school teachers, this teacher believes that government provided education must be a government monopoly run education. Consider students in the Pittsburgh school district where spending is well in excess of $20,000 per pupil. If the taxpayers could switch $12,000 per year to parents so they could choose their child’s school and educational opportunity, does anyone doubt the parents could afford and find a much better education than the average student in the Pittsburgh schools is receiving?

So, the unjustified assumption underlying the teacher’s comment is that because the taxpayers subsidize education, the schools must be a public monopoly. That of course is not the only option. But in the union dominated public school system that is the mindset. Teachers are the most important element in the education equation, not the students. And certainly the taxpayers get no consideration at all as witnessed by the demands teachers continue to make and the strike threats even when the economy and taxpayers are struggling.

Paraphrasing the teacher’s comment, "We need to make more money so parents cannot possibly afford to pay for a good education for their children and only taxpayers can be squeezed for that much money."

Pittsburgh Group Warns of Harm From PAT Service Cuts

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Weighing in on the impending slash in bus service in September, an organization called the Pittsburgh Community Reinvestment Group has issued a report claiming that the 35 percent reduction in service will create additional costs for Allegheny County residents of between $328 and $405 million per year. Higher commuter costs, more congestion, and increased parking rates are the principal drivers of the group’s estimate. The group could have added the loss of business revenue that will occur. Hard to estimate but it is almost certainly a significant number.

But the group-an advocate of more state money for transit-is missing two important considerations. First, the crisis at PAT did not arise because of inadequate state funding. The crisis is a product of decades of kowtowing to union demands for pay, benefits and work rules under the threat of transit worker strikes and the damage that inflicts on the community. The Reinvestment Group might want to go back and estimate how much the excessive costs created by the over generous contracts have cost state and local taxpayers and transit users over the last decade. The Allegheny Institute has reported frequently on PAT’s expenditure levels over the years. A reasonably solid estimate could be calculated fairly quickly.

Second, if the impending cuts do occur and appear to be permanent, there will be openings for new transit providers to begin offering service. The recently passed law stripping the Port Authority of its monopoly status will permit regional transit agencies and private carriers to initiate service to pick up some of the slack. PAT should be in discussions with regional transit agencies about how they can coordinate the introduction of service in area and on routes where major cuts are coming. This would include leasing buses to the agencies for a dollar a year to help keep their costs down. PAT could enter into contracts with private companies to cover routes about to be shut down.

PAT should begin these conversations immediately and announce they are doing so as a way to force concessions out of the unions. A transit strike is still a high probability event since the driver and mechanic contract has expired. By encouraging other carriers to offer service and coordinating with the new carriers PAT can make clear that business as usual is not happening. Finally, the state ought to eliminate the right to strike as soon as it returns from summer break. And it could add a provision to replace the Port Authority with a state appointed management team to prepare a bankruptcy filing-the only sure way to do something about the legacy costs that are crippling the Authority.

Solving PAT’s Financial Woes: State Problem or Local Issue?

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The ongoing saga of the financial morass at the Port Authority (PAT) has developed an interesting twist.  Governor Corbett, through a spokesperson, has responded to PAT’s entreaties for a hefty boost in money from the Commonwealth to cover an impending $64 million deficit by telling PAT that, “they should look to their own resources to come up with a solution.” 

 

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PAT Retiree and Employee Concessions Are Critical

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Right on cue, the Port Authority has rolled out the latest doomsday scenario of service cuts and layoffs. No doubt the huge projected budget shortfall, if unaddressed, will require enormous cutbacks. But as sure as robins returning in the spring, there is no talk of addressing the underlying causes of the financial disaster that PAT has become.

Whipping up rider and business sentiment in an effort to persuade Harrisburg to increase its subsidy-despite the looming $700 million state revenue shortfall for the current budget year-is the overused and cynical modus operandi. Where are the brave elected leader voices demanding that retirees with their enormous legacy costs and current employees with their $25 per hourjobs with Cadillac benefits and efficiency killing work rules make some sacrifice to save jobs and bus service?

That’s not how the game is played in Pennsylvania. Rather, it’s lobby for more money to feed the voracious maw of employees, past and present. And when Governors and County Execs manage to get more money from the state as happened so many times in the past, especially under the previous Governor, what is the lesson learned by employees and retirees? Hold out, make no concessions, more money will be coming from the state or Feds. If the state blinks in the current round, the unions will have their convictions reinforced and the game of chicken will be repeated next year.

The state should set an amount of subsidy per rider, adjusted for inflation of no more than the 2011 level and keep it there permanently.

On the other hand, the state shares a lot of responsibility for PAT’s financial condition by caving in to union demands in the past, by refusing to eliminate the right to strike and being far too deferential to requests for funding for money pits such as the North Shore Connector and by permitting the monopoly status of PAT to continue when competition was sorely needed. It can begin to take some responsibility for its failure to prevent the problems that have being brewing for years. Change the law so the Port Authority can declare bankruptcy-the only way it can deal with its massive and growing legacy costs. Appoint an independent board including several non-Allegheny County members to oversee the organization. Remove the monopoly to allow other carriers access to the County and eliminate the transit workers right to strike.

In the meantime, concessions must be forthcoming and permanent. Some additional monetary help might be granted on a temporary basis if the retirees and employees make a strong, good faith effort. But the additional help must be accompanied by other legislative actions including those recommended above. The Commonwealth needs to take bold steps to deal with PAT and not kick this can down the road again.

Will the State Act on Allegheny County’s Mass Transit Situation?

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The wolf is sitting on the doorstep at the Port Authority of Allegheny County (PAT).  A little over six months from now the agency will be staring into the abyss of a $64 million budget shortfall for the fiscal year beginning July 1, 2012. 

 

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A Regional Transit Authority: Will Consolidation Be Better?

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Alluding to the dire financial forecast that threatens the Port Authority (PAT) in FY2013 a candidate for Allegheny County Chief Executive recently offered the idea that it would perhaps be better to have a regional transit agency, much like the Southeastern Pennsylvania Transit Agency (SEPTA) that serves the opposite corner of the Commonwealth, handle transit operations here.

 

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Port Authority Staring into the Abyss—Again

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In what is fast becoming an annual rite of fall, the Port Authority (PAT) has issued an advisory telling one and all that disastrous service reductions are coming unless state taxpayers come up with tens of millions of additional dollars to support its spendthrift ways. 

 

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County Council Continues Its Irresponsible Voting

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Hard on the heels of its repugnant and indefensible vote to smear W and K Steel by designating it as a “sweatshop”, County Council has added to its irresponsible record by voting unanimously for a resolution urging the Port Authority (PAT) to spend all the recently received bailout money by June 30 to avoid impending service cuts and layoffs.

 

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