Will RAD Funds Be Tapped for PAT?

Call it a strange case of foreshadowing. When the Regional Asset District (RAD) became law under Act 77 of 1993, only a few people other than Legislators would have noticed the curious fact that the language establishing the District and the accompanying one percent sales tax was appended to an act that amended existing language dealing with investigations conducted by the coroner’s office in Allegheny County. 

 

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Transit Pact on the Table

According to published reports and a news release from the County Executive’s office, there is a tentative deal between the Amalgamated Transit Union and the Port Authority that represents "the first step" to avoiding the service cuts and layoffs scheduled to go into effect September 2nd.

There will be scant details until the contract is voted on, sometime around August 19th. Therefore, any comment as to what is in the contract or what the contract does vis a vis the state putting up money for closing the 2012-13 deficit is speculation.

What can be commented on is how this contract process compares to the 2005 and 2008 contract expirations and negotiations. The last contract was not voted on until December of 2008, some six months after it expired. In 2005 it took until November of that year. If the present contract is approved it will have been a considerably shorter time frame. The 2008 contract also went to fact finding, and that process was not even completed until the end of August 2008.

Going back to January 1, 2006, ATU wages have gone up 3% per year with the exception of 2010, when the increase was 2%. Employees are paying 3% of their wages toward health care coverage. The 2008 contract also truncated employees into various classes based on age and length of service to determine post-retirement health benefits.

Pittsburgh Group Warns of Harm From PAT Service Cuts

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.

Where Do Proposed Cuts Stand Historically?

The Port Authority (PAT) unveiled its plans for service reductions this week, noting that if actions are not taken to close a $64 million budget gap a cut in service that would lower the number of bus and trolley routes from 102 to 56.

If it seems like familiar territory, it should.

Let’s place the cut in historical context, at least back to 2002 available data from PAT. As of September 2002 PAT operated 235 routes. That year, according to the National Transit Database there were 73.8 million unlinked trips on PAT. Service cuts came in September of 2002 and September of 2004; intervention by the Governor in 2005 staved off one round of service cuts; another round in June of 2007; the implementation of the transit development plan came in 2010 and 2011 and reduced routes through planning; another service reduction came last March and left PAT operating 102 routes, which was 133 fewer than what was operated in 2002.

There is not yet NTD data available for 2011 to show the impact of the cuts last March and the results of the transit development plan; in 2010 PAT delivered 66.1 million unlinked trips, about 11% lower than 2002.

Uncertainty and Confusion Abound at PAT

What seemed to be a clear and straightforward agenda at the Port Authority (PAT) board’s March 25th meeting turned into a much longer and drawn-out affair after the transit union made a last-ditch concession proposal in order to avert the 15 percent service cut necessitated by a revenue shortfall. 

 

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Another 11th Hour Plan

Roughly three months after citizens were treated to Pittsburgh City Council embarking on a series of pension solutions that stretched until New Years’ Eve (hours before a state-imposed deadline) we now have the events that transpired at today’s Port Authority board meeting.

In sum, service cuts amounting to 15% of service were to go into effect Sunday the 27th; the board was set to discuss an offer by a private operator to take over two routes that the Authority was vacating as part of those service cuts.

Then came a late-minute plan by the transit union: they would forego next year’s 3% wage increase, take a 10% pay cut now, and in exchange avert the service cuts (and by extension, the opportunity for PAT to contract with the outside vendor). The union’s proposal amounts to $18 million, some $12 million short of what the County Executive insisted was necessary to bridge the gap. As of this writing the PAT board is considering the offer and is supposed to determine this evening if the offer is palatable. If it is, the union will vote on the concessions tomorrow.

This messy episode (it is not the first last minute plan hatched to avert cuts or financial problems at PAT) could have been handled differently. The board could have not entertained any concessions of less than $30 million; they could have told the union to feel free to make concessions but they were going to go forward with their cuts and, if concessions proved solid, would consider restoring service and employees. Instead, they, like City Council and City staff in December, are under a ticking clock trying to rush and determine if the plan is viable.

PAT’s Day of Reckoning Denied Again

Pennsylvania’s Governor is in Pittsburgh today announcing that, surprise, surprise, he has found $45 million in unspent economic development funds that could be used to avert the planned service cuts at the Port Authority and grant the next legislature and the incoming Governor time to come up with a permanent fix.

Stop us if you have heard that one before.

It happened in 2005 when the Governor found close to $700 million to give to PAT, SEPTA, and other transit agencies in order to give his task force time to come up with a transportation fix. We wrote in a 2005 Policy Brief that the temporary fix "would make it very tempting to forget the real problem" plaguing PAT and its sister agencies. What followed was Act 44 and the ill-fated I-80 tolling plan.

The Southwest PA Commission had acquiesced to previous requests to flex highway money to PAT and, after doing it several times, said enough was enough. The Governor’s action-if carried out-gives SPC an out since what is being flexed is economic development money, not highway money.

That raises this question: why would the Governor, who is such a strong proponent of all the positives public sector economic development can deliver, leave some $45 million unspent? How many jobs could have been created with that expenditure in these tough economic times?

As we have written time and again, so long as the state continues to ride to the rescue with temporary fixes there is no impetus to address the right to strike, the monopoly status of PAT, or how to begin outsourcing of service. Will the next Governor and General Assembly let today’s action serve as a free pass?

A Plan to Mitigate Bus Service Cuts

As expected, the Port Authority of Allegheny County (PAT) has announced that it is out of options and will make drastic cuts in service beginning in March. Faced with a near $50 million budget shortfall for the current fiscal year and a looming $30 million deficit in the fiscal year starting in July, PAT’s Planning and Development Committee has recommended a 35 percent service cutback and a personnel reduction of almost 500 employees.  More cuts might be necessary later in the year.  Waiting and hoping for more money from cash strapped state government has been a poor strategy.

 

 

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