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Challenges remain for Port Authority

| Monday, Jan. 16, 2017, 9:00 p.m.
Philip G. Pavely | Tribune-Review
A Port Authority bus makes a stop on Liberty Avenue in Downtown, Friday, September 2, 2016.

The Port Authority of Allegheny County could be embarking on a bold new era as 2017 bows. “Could be” remains the operative phrase.

Indeed, the mass-transit agency that ferries passengers to and fro on buses and a light-rail system begins the new year with a new contract for unionized employees and a new fare system for riders.

But as scholars at the Allegheny Institute for Public Policy caution, a number of challenges remain.

A four-year contract went into effect on New Year's Day. And while it does eliminate any threat of a strike in the near term, it does increase the Port Authority's costs, say Eric Montarti and Jake Haulk.

The authority has allocated $156.3 million for wages and salaries in fiscal 2017. That's a modest increase of 8.4 percent over the last decade. But the cost of benefits this fiscal year — $150.6 million — represents a 36 percent increase over 2007.

Calculated another way, however, the numbers are a bit more stark.

“Over the past 10 years transit employment has fallen from 3,127 to 2,680 or 17 percent,” the institute's senior policy analyst and president note. “That means total compensation per worker has climbed from $81,580 in fiscal 2007 to $117,676 in fiscal 2017, a 44 percent jump.”

Going forward, however, a new benefits structure (including elimination of lifetime medical coverage) should serve to tamp down at least some of those increases.

And while a new fare system will eliminate confusing zones with different prices, Montarti and Haulk remind it is not without cost.

“The fare change is expected to generate more paid ridership … but will also create lower revenue due to the elimination of the (higher) Zone 2 fare,” they say.

And, “In order to implement the fare change, including the cost of additional police to enforce the new system, marketing, software and the loss of Zone 2 revenue itself, the total cost to the Port Authority is estimated at $7.5 million,” Montarti and Haulk add.

Additional enforcement costs could be incurred because of the North Shore Connector. Free T rides remain in place under the new fare system (“free” to users but subsidized by Alco Parking, a private company, and the Stadium Authority, a public entity).

“Riders staying within that zone won't have to pay upon boarding but those going past the last stop Downtown and on to the South Hills will,” Montarti and Haulk remind.

As the Allegheny Institute recommended in June, the better move would have been to eliminate all free rides, as was done with buses Downtown.

“Unless or until the Port Authority provides the actual cost of providing service between Downtown and the North Shore, the taxpayers will not know the extent of the net subsidy … being offered to riders,” Montarti and Haulk say.

“In light of the enormous subsidy (hundreds of millions of dollars) already received in building the North Shore Connector, taxpayers have a right to know why rides are being given away,” they add.

All that said, Montarti and Haulk note that with the strike threat passed and other important changes in place, “the prospect of having to manage the fare policy change … may seem calm in comparison.”

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

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