Alarm raised anew on Port Authority deficit

If trend continues, the 2012-2013 budget may be $30 million in the red
Thursday, June 16, 2011
By Jon Schmitz, Pittsburgh Post-Gazette
The Port Authority board is prepared to adopt an operating budget for the coming fiscal year that maintains current service and fares through next June.

After that, officials said, look out.

To balance the budget that begins in July, the agency plans to spend much of its reserve fund and all of the remaining emergency funding that was provided by departing Gov. Ed Rendell early this year.
Those one-time infusions total $40 million and will leave the authority with $10 million in reserves. If the state doesn’t act to cure the transit system’s chronic funding problems, the 2012-13 budget will be at least $30 million in the red.

“2013 will be horrendous if they don’t address the statewide issue,” authority CEO Steve Bland said.
That would follow March 27 cuts that eliminated 29 routes, trimmed service on most others and threw 180 union workers out of their jobs. Ridership for April and May was off by 9.5 percent compared with April and May 2010, according to figures released on Wednesday.

“This is about what we expected,” authority spokesman Jim Ritchie said.

The board will vote June 24 on a $370 million budget for the year that begins July 1. It is meant to tide the agency over until July 2012 in hopes that a commission appointed by the new governor, Tom Corbett, solves a statewide transportation funding crisis that is affecting transit agencies and highway and bridge programs.
State funding, the authority’s largest source of income, has remained flat or decreased for the past several years as inflation has driven up salary, benefit and fuel costs.

The authority’s contribution to employee pension funds will grow from $20 million this fiscal year to $33.3 million next year, a hangover from the 2008 market crash that depleted assets, forcing the agency to throw in more money to keep the funds healthy.

Health care, at $69.8 million, will swallow nearly a fifth of the coming year’s budget, with nearly half of that spent on retirees, who outnumber active employees. That is expected to be a major focus of upcoming talks with the authority’s unions, whose contracts expire June 30, 2012.

Mr. Bland noted that the previous round of bargaining in 2008 yielded the biggest union givebacks in authority history. “The next one will have to break that record for us to have any hope for sustainability into the future,” he said.

Union employees will get 3 percent raises in the final year of the current contract, while nonunion employees will continue under a wage freeze that began a year ago.

Diesel fuel, which cost the authority an average of $1.98 per gallon in 2010, is projected to cost $3.40 per gallon in the coming year, adding $5.5 million to the budget.

Average weekday ridership in May was 205,066, down 8.2 percent from May 2010. In April, average weekday ridership was 203,103, down 10.8 percent from April 2010.

For the two months combined, 21,500 fewer riders took transit on an average weekday. However, Mr. Ritchie said, the size of the dropoff might have been magnified slightly by glitches with the new fare collection system, which failed to properly register some customers. He said the problem has been corrected.
For the fiscal year, the authority had carried 58.2 million passengers as of the end of May, a 3.4 percent decline from the same period a year ago.

Jon Schmitz: or 412-263-1868. Visit the PG’s transportation blog, The Roundabout, at Twitter: @pgtraffic.

First published on June 16, 2011 at 12:00 am