No PAT Fix in Budget Address

The Governor devoted two short paragraphs in his budget message (ten pages in all in this printed version) to transportation-he made no distinction between mass transit, roads, or highways-and indicated that it will be treated as a "distinct and separate topic". That could mean there will be a special session on transportation the way there was one for property taxes in 2006. But that also means there is no quick fix for the woes that plague the Port Authority, which is facing a $64 million deficit and plans to eliminate a substantial number of routes in September.

Whether the transportation plan encompasses some, all, or none of the recommendations made by the Transportation Commission in its report last August in unknown. The Commission suggested various increases to fees and taxes to pay for transportation needs.

The Governor also stated that the solutions need to be long-lasting. While transit advocates are hoping for long-lasting and growing revenues, perhaps there will be focus on the cost-side changes that are long overdue: the power to strike, the impact of monopoly power, and the need to look at bankruptcy for legacy costs.

The real question is how the Governor will handle the issues related to PAT in the coming months with the deficit and previous history of temporary flexes to get the agency through tough spots and avoid a planned round of service cuts.

Commission Will Have to Tackle Transit Costs

In the transit presentation made to the Transportation Funding Advisory Commission (TFAC) on Monday (by officials of PENNDOT) it was stated "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".

If the commission accepts this thinking-the implication that transit agencies are not under the expectation to lower costs and should be granted special status because they deliver a greater social good-then there will never be resolution to the continual crises at transit agencies like the Port Authority (PAT).

Thanks to state-granted monopoly power which shields them from competition and prevents them from acting like private companies and a seemingly never-ending series of bailouts and one-time fixes, the "business" keeps going on at PAT. How else can one explain the 70% growth in bus operating costs from $6.40 to $10.94 (using operating expense per vehicle revenue mile) over the time frame of 2000-2009 according to data from the National Transit Database? Or the explosive and crippling growth in worker benefit costs at the agency over time?

The 2009 data shows that of the nine transit agencies serving Pennsylvania’s major urban centers PAT’s bus cost was second only to SEPTA ($13.06). Other agencies fill in the range from $7.31 in Altoona to $5.93 in Scranton.

What about a transit system where a premium is placed on competition and contracting out? The Regional Transportation District in Denver has been outsourcing 50% of its bus service for a long time now and shows bus operating costs of $7.73 in 2009, about 30% lower than PAT, 40% lower than SEPTA. In 2000, according to the National Transit Database, their cost was $5.62, meaning while PAT grew 70% the RTD grew 38%. While there is no profit involved there certainly was an impact from market forces.