Five steps to save mass transit

| Sunday, Dec. 5, 2010

The Port Authority of Allegheny County is bankrupt.

It is bankrupt financially, intellectually and morally.

The mass-transit agency's board and the elected officials who appoint the board members refuse to listen to suggestions about how to preserve some bus service, choosing instead to make massive cuts. The transit workers union would rather see fellow members lose their jobs than make any concessions on compensation or work rules. And the state continues in its role as enabler of irresponsible behavior.

By refusing to eliminate the right of transit workers to strike, the state has created an obscene imbalance of bargaining power in favor of the unions.

By involving itself in negotiations and causing scarce highway dollars to be diverted to Port Authority operations and agreeing to underwrite 16 percent of the North Shore Connector as part of the required local match to qualify for federal funding, the state has promoted the agency's irresponsibility.

Indeed, cumulatively, such actions over many years convinced the board and unions that the state would always be there with a bailout regardless of how recklessly they behaved. Clearly, that scenario is rapidly coming to an end with predictably disastrous consequences for transit users.

In short, the Port Authority is dysfunctional and cannot carry out its mission of providing affordable transit service to the residents of Allegheny County who depend on public transportation. Therefore, it is imperative that the government in Harrisburg take action without delay to repair public transit in Allegheny County.

• Step one: Address the bankruptcy issue.

As matters now stand contractual benefit and legacy costs are swallowing up more and more of the authority's revenue and creating a death spiral for the organization. Only bankruptcy provides a way for the Port Authority to deal with the ever-increasing and ruinous burden of pay and benefit costs.

Under the Pennsylvania Constitution, benefits promised under contract cannot be taken away by legislation or unilateral actions by public officials. Bankruptcy under federal statutes is the only avenue open to local governments in such desperate need of relief.

Unfortunately, under current Pennsylvania law, authorities are not permitted to file for bankruptcy. Therefore, the Legislature must amend relevant statutes to allow the Port Authority to enter into Chapter 9 bankruptcy.

• Step two: The General Assembly should pass accompanying legislation creating an independent oversight board for the Port Authority.

The Legislature should give it the power to force the transit agency to file for bankruptcy if the existing board of directors refuses to do so. The oversight board would also have veto power over all major capital projects.

• Step three: The Legislature should rewrite the act creating the Port Authority to remove its monopoly over transit services in Allegheny County.

Further, the newly created oversight board would have the authority to work with regional agencies or private transit companies to begin providing service on routes that the Port Authority has discontinued. This should also include the authority to lease surplus equipment to these agencies for a dollar a year as an inducement to offer service. No other state subsidy would be forthcoming.

• Step four: Eliminate the right of transit workers to strike.

Strikes or threats of strikes have been a major factor in the all-too-generous compensation and work-rule settlements over the years that are largely responsible for the authority's horrendous financial situation.

• Step five: Empower the oversight board to impose a hiring freeze.

As retirements and other attrition of workers occur, begin outsourcing the service previously covered by the former employees. In effect, over time continuously reduce the Port Authority's payroll and legacy cost buildup.

Because of terms of the Federal Transit Act, any worker displaced by having his/her job outsourced would be entitled to a year's wages for each year of service (up to six years' wages) in a severance package. Thus, retirement and attrition offer the only financially viable path to privatization or other outsourcing of service.

These steps will require much fortitude in the face of union and local official pushback. However, as can be seen plainly from the recent announcement of a 35 percent cut in bus service with more likely coming in less than a year, it is time for Harrisburg to act decisively, forcefully and expeditiously.

To be sure, these steps are not a magic wand that will make everything enormously better immediately. But taken together they offer a path to opening Allegheny County to more service, relieving some of the Port Authority's most onerous legacy cost burdens and changing fundamentally the power and intransigence of the unions in controlling authority operations and finances.

By allowing other agencies to offer service in the county -- and a long-term strategy of continuous outsourcing -- union leaders and members will have to become more cooperative in making the Port Authority efficient and competitive or lose their jobs.

At the moment, the unions are willing to take job losses because they believe service cuts will push the General Assembly into handing over more money. That gambit must be shown to be a losing proposition once and for all.

Jake Haulk is president of the Allegheny Institute for Public Policy.

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