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I think part of the problem is that public transportation advocates complain about each looming cut. However, based on the article that you cited it seems as if the cuts made were needed. However, I do agree that at some point you shouldn't cut anymore.
I think you need to distinguish cuts driven by funding cuts and cuts driven by efficiency programs.
The TDP, for example, involved some cutting, but it also involved some expanding, and overall it was designed to improve efficiency. Which it has been doing.
Ironically, though, the more efficient you become, the worse funding cuts become. Maybe this is worth being explicit about:
Say you are spending $X to get quantity A in service. Becoming more efficient means $X will now get you A + B in service. So if you then cut $X in funding, you now lose A + B in service, not just A.
So I totally get that people feel there is sometimes a "boy who cried wolf" feel to some of what transit advocates say about cuts. But funding cuts which follow efficiency programs really are different, and can have much worse effects.
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I think the reason the public still wants cuts from the unions is that most of the country doesn't have a pension and pays a lot more for health care.
To be blunt, I think a lot of people are being deliberately misled about what PAT's management has done in recent years, and what PAT's management is actually authorized to do, as a way of deflecting attention from why exactly these cuts are happening.
That's not to say the public doesn't want further union concessions, or in general to have something done about PAT's legacy costs, but I think a lot of the response to this particular crisis is going down well-worn paths and is not tracking what is actually happening this particular time.
BrianTH, I'll go back to the original quote from the Tribune-Review article:
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In 2010, the so-called legacy costs that include retiree health care and pensions for unionized workers cost Port Authority $93.2 million, up from $15.9 million in 2003. The costs represent about a quarter of the agency's operating budget, and they are expected to grow to about $116 million by 2016. Port Authority, union set to start contract talks - Pittsburgh Tribune-Review
At what point can we consider the provision of transit services by PAT a front for it's main business - providing pensions and health care benefits to former employees? The scheme reminds me of the old mafia front businesses. The 'costs' are 25 percent of the operating budget.
Don't forget that these benefits were granted after 20 years of 'service' - they're not normal pensions earned by people retiring in their 60's.
The only way to disguise the magnitude of this insanity is to funnel state money into the PAT money pit so the pensions don't seem such a large portion of the business. It doesn't change the fraudulent nature of the scheme.
BrianTH, I'll go back to the original quote from the Tribune-Review article:
At what point can we consider the provision of transit services by PAT a front for it's main business - providing pensions and health care benefits to former employees? The scheme reminds me of the old mafia front businesses. The 'costs' are 25 percent of the operating budget.
Don't forget that these benefits were granted after 20 years of 'service' - they're not normal pensions earned by people retiring in their 60's.
The only way to disguise the magnitude of this insanity is to funnel state money into the PAT money pit so the pensions don't seem such a large portion of the business. It doesn't change the fraudulent nature of the scheme.
(1) There's nothing fraudulent about PAT and its dealings with retirees. Short-sighted or imprudent perhaps, but not fraudulent. Healthcare and retirement benefits were negotiated during a time when those promises seemed reasonable -- obviously now they don't.
(2) Exactly what point are you trying to make? Perhaps you just don't understand this, but the state cutting PAT's budget does absolutely nothing to retiree benefits. In fact, since PAT is handcuffed to those obligations, the state funding cuts will simply increase the percentage of the operating budget that is dedicated to retiree benefits.
(3) Unless you want to actually see PAT become an agency dedicated solely to the purpose of providing retirement benefits, then you should be opposed to the state funding cuts. As has been mentioned countless times -- an idea which for some reason escapes you -- PAT cannot reduce those costs independently of the state.
MLNorth, my reading says the retirement benefits were first granted by previous management to itself. Then it granted these benefits to union workers. No one was paying attention when this happened and it received no public attention until it was already hurting PAT's budget. This isn't a normal granting of pension benefits. It's unprosecuted fraud.
I get that the state needs to act to make bankruptcy a viable option. All of those who keep calling for more state spending on Pittsburgh public transit act as though this is impossible. It's not. The only way to force the issue is to stop the flow of state money into PAT coffers.
This isn't a normal granting of pension benefits. It's [not] unprosecuted fraud.
I fixed it.
Not everything that's financially unsustainable is fraud. Regarding transportation funding, there are all kinds of things that require state subsidization -- rural roads and highways, bridges, airports -- and of course that doesn't make them "fraudulent."
But you can use whatever language you want to use, because I think most reasonable people recognize that you're being completely hyperbolic.
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Originally Posted by Goinback2011
I get that the state needs to act to make bankruptcy a viable option. All of those who keep calling for more state spending on Pittsburgh public transit act as though this is impossible.
No one is calling for more state spending on PAT. The arguments I see being made are more along the lines of receiving a funding benefit that is proportional to the taxes Allegheny county contributes to the state coffers. And at the moment, transit advocates are asking for less funding cuts, not a funding increase.
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Originally Posted by Goinback2011
It's not. The only way to force the issue is to stop the flow of state money into PAT coffers.
If you want to make PAT more profitable and efficient, why on earth would you destroy ridership? If the state truly wants to make PAT more viable, then it should be attacking retiree benefits and pushing for efficiency improvements and increased ridership at the same time. It would be in direct opposition to that objective to destroy ridership.
The state has the power to bring about those changes but is choosing not to.
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Originally Posted by Goinback2011
Why does this escape you?
Because what you're proposing doesn't make any sense.
At what point can we consider the provision of transit services by PAT a front for it's main business - providing pensions and health care benefits to former employees? The scheme reminds me of the old mafia front businesses. The 'costs' are 25 percent of the operating budget.
Even if you were thinking of this in percentage terms, if it is only 25% legacy costs, it still isn't MOSTLY legacy costs.
But that is the wrong way to think of it anyway. The money going to pay for vital transportation services is money well spent. Conversely, if you don't think all the money going to pay for legacy costs is money well spent--and I would tend to agree--then you need to directly cut those legacy costs so you can reduce the money being spent on legacy costs. And all that remains true at any relative percentages.
Perversely, the state is currently on track to achieve the exact opposite result: by cutting PAT's operating funding without giving it any means to reduce its legacy costs, it will end up ONLY cutting the money being spent on the good stuff, and NOT AT ALL cutting the money being spent on the bad stuff. That outcome makes no sense if you are not actually anti-transit, and again all that remains true at any relative percentages. Indeed, even if all you care about is maximizing the relative percentage of funds being spent on current transit services versus legacy costs, the state's current track will just make those relative percentages worse by that standard.
So again, if you want to lobby the state to give PAT the authorization to reduce its legacy costs, up to and including through authorizing bankruptcy, I'll be right there with you. But if you are supporting cutting PAT's state funding without providing it any means to reduce its legacy costs--which is what is currently on track to happen--then you are supporting the exact opposite of what you claim to want to achieve.
Incidentally, I'm not questioning your sincerity, just pointing out the logical implications of your expressed concerns in light of the current policy debates going on at the state level. But I very much believe a lot of anti-transit politicians and their supporters fully understand all this, and they are deliberately trying to put PAT into a death spiral so that they can eliminate it entirely.
No one was paying attention when this happened and it received no public attention until it was already hurting PAT's budget.
That's not at all true. PAT has been under constant public scrutiny since it was formed in the early 1960s, and indeed there have always been critics of its labor contracts.
But I would agree most people were not as worried about some of those contracts as they should have been. In part that was because they didn't have the benefit of our hindsight: people didn't foresee that transportation policy at multiple levels was going to take an extended anti-transit turn, and they didn't foresee the magnitude and the effects of the steel bust, and they didn't foresee the ongoing explosion in health costs. Still, I think it is fair to say they were also just too willing to grant themselves higher level services while pushing off the (uncertain) costs to future generations.
And that's a fundamental problem with figuring out how to resolve all this. Ideally, we would claw back a lot of that, but many of the consumer-side beneficiaries of that cost-shift are long gone (dead or moved away). Similarly, many of the ongoing recipients of those contract benefits are also long since departed from Allegheny County. So there are no easy ways to achieve such a claw back.
Of course some politicians try to slide by all this by acting as if certain political units had a life independent from the people within those units--it is "Allegheny County" which is to blame, or "the City of Pittsburgh", and the County or the City should have to suffer the consequences! Again, though, in reality many of the people living in the County or the City today are not the same people as the people who benefited from those contracts back then, or are still benefiting today.
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I get that the state needs to act to make bankruptcy a viable option. All of those who keep calling for more state spending on Pittsburgh public transit act as though this is impossible. It's not.
I have personally never said it is "impossible". However, there is no actual progress in that direction currently going on in the state government, and realistically there is bipartisan opposition to doing such a thing, so it will take an extended public campaign without the guarantee of success, certainly not on any particular schedule.
Generally, my point is you have to do this in a certain order: first authorize bankruptcy, then cut legacy costs, then use the proceeds to either cut the budget or improve service. You're trying to leap to the last step without accomplishing the first two steps, which will do the opposite of what you claim to care about.
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The only way to force the issue is to stop the flow of state money into PAT coffers.
There is no reason to believe that mechanism will work. Indeed, this entire conversation is proof that doing nothing about PAT's legacy cost problems while forcing it to reduce its service levels has, if anything, the effect of reducing the political support for doing anything at all to improve PAT's long-term financial health.
Again, it is a very cynical, but all too plausible, plan: just keep forcing legacy costs to be a greater and greater percentage of PAT's expenditures, then finally kill it off entirely when almost no one has any direct stake left in keeping it functioning.
Suggesting that bankruptcy is the solution to PAT's problems does make sense, ML North, you just don't like it. All organizations (except PAT) have bankruptcy as an option to deal with unsustainable fixed costs, including pension promises that can't be kept. So long as money from Harrisburg is forthcoming, that option won't be explored.
If you think the pension benefits granted under previous PAT management are legitimate and sustainable, then by all means, lets set up a special taxing district where you and BrianTH and others who believe this can be specially taxed to pay for benefits like this. From my perspective, the pensions are fraudelent and management just wasn't prosecuted for granting them.
Why not award $10M pensions to PAT bus drivers and then force taxpayers in Altoona to pay for them? What a racket.
Suggesting that bankruptcy is the solution to PAT's problems does make sense, ML North, you just don't like it.
You're completely wrong. It is an option, but the objective of bankruptcy would be to separate the viable part of PAT (transportation services) from the unsustainable obligations (retiree benefits). And it makes absolutely no sense to destroy the viable part whenever it is possible to go directly after the unsustainable obligations, but nonetheless that's what you're advocating and the state is doing.
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Originally Posted by Goinback2011
All organizations (except PAT) have bankruptcy as an option to deal with unsustainable fixed costs, including pension promises that can't be kept.
Wrong again. Cities, towns, counties, and school districts would have to take similar procedural steps to file bankruptcy under Chapter 9.
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Originally Posted by Goinback2011
If you think the pension benefits granted under previous PAT management are legitimate and sustainable, then by all means, lets set up a special taxing district where you and BrianTH and others who believe this can be specially taxed to pay for benefits like this.
I think that PAT needs to deal with retiree benefits; however, the state is destroying transit service and leaving retiree benefits untouched, and you're supporting that plan.
Continue to follow that plan and you'll end up with an agency that only pays retiree benefits and offers no service whatsoever. Obviously you'd be against that scenario, but for some reason you're sending the train down that track.
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Originally Posted by Goinback2011
From my perspective, the pensions are fraudelent and management just wasn't prosecuted for granting them.
Then you don't know what "fraudulent" means.
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Originally Posted by Goinback2011
Why not award $10M pensions to PAT bus drivers and then force taxpayers in Altoona to pay for them? What a racket.
As has been discussed ad nauseam, Allegheny County has a net outflow for transportation funding, meaning it contributes more to than it receives from other counties.
It also comes up pretty much every time we discuss PAT's finances here.
So the problem isn't getting people to "explore" the idea, the problem is persuading the state to authorize it. And again, the holdup is that:
(A) There is bipartisan opposition to setting such a precedent, which could also be used against politically-powerful retirees like the police and fire retirees; and
(B) Anti-transit people prefer having this rhetorical weapon to use against transit authorities.
And unfortunately this very conversation really is showing the cruel efficacy of (B).
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If you think the pension benefits granted under previous PAT management are legitimate and sustainable, then by all means, lets set up a special taxing district where you and BrianTH and others who believe this can be specially taxed to pay for benefits like this.
First, I don't think I could have been any clearer about my agreement that these legacy costs should be trimmed, so I am now having second thoughts about not questioning your sincerity.
Second, as I have noted a million times now, if the state wants to get out of the transportation business entirely, meaning it will make no expenditures for transportation and also collect no taxes for transportation, and instead will devolve all that down to the counties and other smaller units, then great!
But of course the reason that won't happen any time soon is that places like Blair County know they have been coming out way ahead in that game, even when the state has been funding PAT. The anti-transit folks in the state government are just so greedy, cynical, and short-sighted that they want to make that deal even better for their constituents than it already is, even though that would be foolish for the long term health of the state's economy.
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