Jake Haulk & Eric Montarti: Bail out the Port Authority? No, reinvent the way mass transit is delivered
As the long-running saga of the Port Authority of Allegheny County's tortured finances winds toward the metaphorical cliff on Sept. 2, it's time to rethink the state's entire approach to the mass-transit agency's bus service problem.
According to the authority's board of directors, a 35 percent service reduction will go into effect in two weeks unless an agreement can be reached to close a $64 million deficit. Presumably, that agreement would involve concessions from the Amalgamated Transit Union (ATU) and management along with additional state money. The ATU, which represents the bulk of non-salaried employees, is set to vote on a new contract today. As of this writing no details of the agreement have been officially released.
But one report says the proposed union contract contains language that would void the contract if the state and county do not come up with enough money to prevent layoffs or preclude the closing of a garage.
How should the state respond to this poison pill?
First, it should stop negotiating with the union with respect to how much it will offer in concessions in order to get additional state money.
Then the commonwealth should adopt an entirely different approach to the transit issue in Allegheny County. The state should be focused on helping to provide bus service to as many riders as possible for each tax dollar it spends.
In that regard, consider that the National Transit Database reports PAT bus costs to be at $5 per rider, about 50 percent higher than the average for the 50 largest transit agencies in the country.
Further, note that PAT drivers' hourly pay is about $10 higher than the average for drivers at the regional transit agencies in Southwest Pennsylvania.
Spending commonwealth taxpayer money wisely requires that if it is possible to shift money from a very high-cost provider to lower-cost providers so as to increase transit service in Allegheny County, then the state must pursue all such opportunities.
Specifically, Gov. Tom Corbett should have officials of the Port Authority and regional transit systems meet to see which routes or service areas those agencies can pick up quickly — including possible connections to Port Authority hubs and busways — while allowing the Port Authority to keep its lowest cost-per-rider service going as it makes service cuts.
The regional transit agencies could be offered assistance on a per-rider basis to incentivize them to begin new service. Moreover, because the Port Authority will have a substantial surplus of buses after making service cuts, it should enter into inexpensive bus leases with the carriers to reduce their need for capital.
Thus, instead of coming up with an additional $30 million or more each year for the Port Authority to cover outlandish legacy costs and very high operating expenses, the state should look for ways to spur additional Allegheny County service from regional agencies.
There should also be a coordinated effort to find private providers to pick up routes where it makes economic sense.
Of course this process should have begun earlier because the pressures of time now could preclude getting a workable handoff of bus service this year. But it does mean that if there is to be any state bailout this year, it must be for only one year with the proviso that the state will empanel a task force to work on a long-term solution along the lines proposed above.
The state should not commit to continuously underwriting the Port Authority's extraordinarily high benefits.
Beyond that, the governor should make any additional state funding this year conditional on the transit unions' written commitment not to oppose legislation that will take away the right of transit workers to strike. That legislation should be drafted and submitted to the appropriate committee as soon as possible.
Unless the right to strike is eliminated, the ability to contain costs and operate efficiently in the future will be hampered severely, if not rendered impossible.
And even with a no-strike law, it is unclear how the Port Authority achieves long-term financial viability unless it is granted authority to declare bankruptcy to deal with the enormous legacy cost problem.
Kicking the can down the road again is not an answer.
Jake Haulk is president of the Allegheny Institute for Public Policy. Eric Montarti is a senior policy analyst there.