A transit tax wish list, revisited

An April 2019 blog analyzed a report that advocated for expanded tax and fee options for local governments to support mass transit agencies.  The issue at the time was the change on the horizon (in 2022) when the payment from the Pennsylvania Turnpike Commission to the Public Transportation Trust Fund was to drop to $50 million.  That funding change has occurred, and the state now transfers sales and use tax revenue to the fund.


With the coming expiration of federal COVID dollars for mass transit agencies, there should be no surprise that agencies are starting to look for new money.  To be sure, ridership has yet to return to pre-pandemic levels for many agencies.  This includes Pittsburgh Regional Transit (PRT), where the latest data show bus and light-rail ridership are still down significantly.


A news article notes that leadership at the Southeastern Pennsylvania Transportation Authority (SEPTA) is raising the possibility of fare hikes and service cuts once the federal money is gone.  The article describes a legislative proposal introduced into the House of Representatives that would expand county options for subsidizing mass transit.  Many of the options would be along the lines of proposals in the 2019 report.


Allegheny County would be the only county able to continue to levy taxes on alcoholic beverages and car rentals as permitted by Act 44 of 2007.  Those taxes are budgeted at a combined $49.5 million for this year.


The bulk of the collections are for the tax on alcoholic beverages; collections have fluctuated through the pandemic and after.  Inflation has also had an impact.  The change in the Northeast Consumer Price Index from 2021 to 2022 was 6.9 percent, well above the previous three years.  If county drink tax collections came in at the 2022 budget level ($42.2 million), the 14 percent growth likely would have been impacted by inflation’s effect on the price of alcoholic beverages.


If approved, taxes, surtaxes and fees on deed transfers, motor vehicles and motor vehicle registrations, personal income, local services and rides originating in the specific county from transportation network companies (arranged through an app) could become real.  Some of these items are already taxed by the state, municipalities and/or school districts.


But where is the insistence on cost reductions? PRT has done very little in the way of layoffs, service reductions or utilizing smaller vehicles as a way to adjust to low ridership. Hopefully the General Assembly takes the need to reduce costs into consideration before providing counties with a menu of new levies which would exacerbate issues with mass transit spending.



A Regional Transit Authority: Will Consolidation Be Better?

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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What to Do About Mass Transit Costs in PA?

“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”.  So began the presentation on mass transit made by PENNDOT to the Governor’s Transportation Funding Advisory Commission (TFAC) on May 16th


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Buses, and Trains, and Trucks, Oh My!

The Governor’s transportation panel met in Harrisburg on Monday to hear presentations on mass transit, rail, and truck modes and discuss funding options for what is pegged at $10.7 billion of "unmet needs" in the state’s infrastructure. With three separate modes to receive testimony upon, there is a lot of information for the panel to digest as it works toward issuing recommendations by August.

Here are some of the interesting factoids taken from the presentations:

Transit-When considering the funding for the state’s transit agencies, Federal and state subsidies provide 50% of SEPTA’s budget with local funding and fare revenue providing the remaining 50%. All other systems derive much more funding from Federal/state sources with PAT at 65%, other urban systems (in total) at 70%, and rural carriers at 80%. PAT accounted for 15% of the 432 million boardings in FY 09-10. The highest base fare for transit-levied by five systems-is $2.

Trucking-Roughly 1.2 million tons of freight are moved each day in PA. The industry in PA pays $1.39 billion in state and Federal taxes and fees annually. Truck-related fatalities per 100 miles driven fell in recent years.

Rail-Some $40 million from the capital budget and the rail funding assistance program is dispensed in Pennsylvania.

How to fund the state’s transportation needs? That question was given a 16 page treatment looking at existing sources, new sources, short-term, long-term, etc. Everything from increasing registration fees, tire fees, rental and lease fees and taxes were mentioned, along with dedicating certain sources of revenue to specific uses (like driver license fees to the state police or small games of chance for transportation) along with new forms of local taxation for transportation needs (sales tax, income tax, etc.). Many of the funding options were raised by the previous Governor’s transportation panel in 2006.

Commission Mechanics

Yesterday’s blog discussed the rather limited scope under which the Governor’ Corbett’s Transportation Funding Advisory Commission (TFAC) will operate. Governor Rendell’s task force-the Transportation Funding and Reform Commission (TFRC)-likewise dealt with transportation issues, and the Executive Orders creating each respective group provides a good starting point for comparing and contrasting the two efforts.

Some Similarities:

  • Both Governors designated the Pennsylvania Secretary of Transportation as the titular chair of the Commission
  • Both Executive Orders stipulated that Commission members would not be compensated for their service, other than travel and related expenses
  • Both Commissions received staff support from the Department of Transportation

Some Differences

  • Governor Corbett’s Commission is much larger with 35 members, whereas Governor Rendell’s had 9 members
  • Governor Corbett will select all members of his Commission, whereas legislative leaders made 4 of the 9 appointments on Governor Rendell’s Commission
  • Governor Corbett’s Commission is working on a much shorter time frame: the Executive Order was signed on April 21st, and the final report is due on or before August 1st of this year. Governor Rendell’s Commission was created February 28, 2005 and its final report was due on or before November 15, 2006 (it was actually submitted on November 13, 2006)
  • Governor Rendell’s Executive Order ordered operational audits of SEPTA and PAT
  • Governor Corbett’s Executive Order includes public and private use airports as part of the transportation mix

Standing PAT

The County’s first Special Committee on Public Transportation convened a few minutes after 5 PM on Tuesday and before adjourning a few minutes before 6 PM raised questions regarding Act 44, the current labor agreement for the PAT union, and some of the differences between PAT and the much larger SEPTA system in Philadelphia and much of the southeast region of the state.

One of the six Council members in attendance asked about legacy costs at SEPTA; another asked about how funding under Act 44 has affected SEPTA; a PAT staff member offered to research the matter further.

A quick look back at the 2006 Task Force appointed by Governor Rendell points out the differences, and our research has highlighted those differences in publications since the time of the Task Force’s report. To wit:

  • SEPTA had "starting bus driver and mechanic rates below U.S. transit industry average" while PAT had "operator wage rats historically higher than industry and statewide average; highest in the U.S. when accounting for cost of living"
  • SEPTA demonstrated a "limited pursuit of Federal New Starts program and other expansion projects evident from investment of only one (1) percent of capital dollars for expansion; PAT was characterized as having "aggressive pursuit of new starts and other expansion projects despite significant operating deficits for existing services and shortfall in local subsidies".
  • At the time SEPTA "contracts out 2 fixed route bus services in outer suburbs" while PAT "collective bargaining agreements are silent on contracting out fixed route services".

What was evident five years ago as the Task Force toured the state must come back around and be front and center in Council’s chambers.

Philly Strikes Out

Just hours after the conclusion of last night’s game 5 of the World Series between the Phillies and the Yankees some 5,100 bus, trolley, subway, and mechanics belonging to Transport Union Workers Union Local 234 in Philadelphia walked off the job, idling a significant portion of southeastern Philadelphia’s transit service affecting 450,000 riders per day and having significant negative economic and safety implications.

Well, at least they were kind enough to honor the wishes of elected officials who, according to published reports, asked them not to go on strike while the World Series was in town. The Philadelphia Inquirer noted that the Governor himself noted that a strike during the Series would give the City "a little bit of a black eye" while national attention was focused on the City. Perhaps he had fear of another "the Bronx is burning" moment occurring.

So now residents of Philadelphia and the southeast corner can take consolation in the fact that people around the nation aren’t tuned into the imbalance of power that exists in Pennsylvania in regards to its transit unions. They hold all of the cards and can shut the system down to get what they want. It just happened four years ago in Philadelphia when the system was idled for a week. It has come precariously close here in Pittsburgh until the intervention of elected officials and national unions prevented a strike, only by caving in to union demands.

Pennsylvania needs to get out of the small minority of states that allow transit workers to go on strike. That likely won’t happen. So here’s what should be done: the Governor’s own Transportation Funding and Reform Commission report from three years ago said that SEPTA (and PAT) should be required to "evaluate competitive contracting" in transit service "at least one every four years in concert with the expiration of labor contracts". That would allow private operators to bid and compete against the public sector unions for the right to provide service. Not surprisingly, the Transit Workers Union wants to try to erase provisions in the current labor contract that allow for outside contractors to do repair and maintenance work on vehicles.

How outrageous! TWU workers want it all and then some. Consider that the state legislature just permitted Philadelphia to increase its sales tax another point in order to fund its anemic pensions, much of which is likely a result of over-promises to unions. For a City that has now accounted for a significant share of all transit strikes since 2000, the Governor does not need to worry about the City getting a black eye-it already has one.