The Port Authority’s peril

The Port Authority’s peril

Is the Port Authority of Allegheny County destined to fall over a fiscal cliff?

It’s a valid question given some general observations of mass transit experts from around the country regarding the once waning but now waxing coronavirus pandemic, the long-lasting effects on ridership and the damage – yes, damage — that related taxpayer bailouts might have caused.

Faced with tanking ridership during the height of the first waves of the pandemic in 2020, the feds doled out billions to transit agencies nationwide. The Port Authority alone raked in about half-a-billion dollars in “relief” money.

But as a recent Wall Street Journal headline noted, “Public transit is flush with cash, but not riders.”

“Unless ridership recovers from its pandemic-induced drop, agencies will again confront large budget deficits once the federal money runs out in three or four years” analysts told The Journal. “That could mean service cuts and fare increases, according to transit agencies.”

And cautions Reason Foundation scholar Baruch Feigenbaum, in the same story, “As soon as the money stops flowing, transit agencies are going to be in the same position as they were before.”

Or worse, as the Allegheny Institute’s Eric Montarti detailed in June (in Policy Brief Vol. 21, No. 23) regarding Allegheny Count’s mass-transit agency.

The Port Authority could find itself between a rock and hard place given its rising budget, higher employee count, still-flagging ridership but higher fares and uncertain future funding, the think tank’s research director concluded.

And its “egregiously high costs …must be taken into consideration,” he said.

How long the federal bailout dollars last depends on how the Port Authority earmarks that money and ridership, which remains far below normal numbers with a return to normalcy far from a given. But it could exhaust its rescue dollars by fiscal 2024.

As the companion commentary piece to last month’s Policy Brief reminded:

“(T)he elephant in the room remains one that the mass-transit agency refuses to acknowledge — its extraordinarily high costs (specifically, its bus per revenue mile and per revenue hour operating costs — when compared with peer agencies and even those much larger).”

Back to Baruch Feigenbaum, the Reason Foundation analyst. He stressed to The Journal that America’s mass-transit agencies must find ways to adapt instead of living off the federal dole.

“The problem with free money is it does not encourage innovation, and that’s really what transit agencies need to be encouraged to do right now,” he said.

“It’s just postponing the reckoning.”

And for the Port Authority of Allegheny County, that reckoning is decades overdue.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).