The Transportation Commissions FINAL Report to the GOV (Pittsburgh, Homestead: lawyers, unemployed)
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Then, what would prevent the creation of another Port Authority, under a different name, without the legacy costs?
I don't think this is a fair solution to the problem, but the threat of that would certainly give all parties in this mess the motivation to allow a bankruptcy option. Something is better than nothing for pensioners. The state and county wouldn't be pouring money down a black hole for eternity.
Stop all funding of PAT and move to create a new Transit Agency. Watch how fast the bankruptcy option becomes law.
Then, what would prevent the creation of another Port Authority, under a different name, without the legacy costs?
The same thing that prevents a PAT bankruptcy--state law would have to authorize all that, and currently it does not.
Incidentally, you'd also have to look at how this plan would affect things like federal funding, title to various assets, how to maintain continuity of service, and so on. I suspect that a bankruptcy would end up being a lot better approach (they usually are if maintaining ongoing operations is important).
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but the threat of that would certainly give all parties in this mess the motivation to allow a bankruptcy option.
Unfortunately, since the party that needs to be threatened to authorize a PAT bankruptcy is the state, and since the threat of instead dissolving and replacing PAT also can't be invoked without the state authorizing it first, this idea doesn't really get you anywhere new.
What I'm seeing in this situation is something similar to what happened to the steel industry in the late 1970's, but it involves pensioners rather than current workers.
I had a relative working at J&L back then who started working in the early 1950's. By the late 70's he was getting 14 weeks of leave as part of the union contract. They were laying off younger workers so he and others like him could keep those perks. They ate their young.
What happened? The steel industry went away.
If there's no way to reduce the pensions at Port Authority, it will go away too.
Just an aside, but the steel industry really "went away" (of course there is still a steel industry in the area, it just employs a lot less people) because of technological changes and increased competition from new producers in other locations using those new technologies. No amount of labor concessions could have kept the same level of steel industry employment in this area.
But none of that is really relevant to PAT. PAT isn't trying to produce a good that will be sold in many different markets, in competition with producers located all around the world, for a profit. Rather, PAT is providing a public service for the benefit of the stakeholders in its service area. If PAT had some sort of viable competitor for that role, such a comparison might make more sense (although the situations would still be disanalogous in various ways), but of course there is no such competitor. Similarly, if PAT disappeared, the beneficiaries of PAT's services couldn't just switch to an alternative transit authority, as steel customers switched to alternative producers, because they have no such alternative.
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If there's no way to reduce the pensions at Port Authority, it will go away too.
Note PAT's current labor contracts are very different. The legacy benefit costs are an ongoing issue, but I don't think it is true that the very existence of PAT depends on cutting those costs--failing to cut them just means we will get less service than we should for a given amount of funding.
I think the labor issue with the steel industry is a relevant comparison. There was nothing magical about the Japanese steel industry (the major competitor in that era). They simply had a better cost structure which made investment in new process technology profitable in Japan, but not here.
As for cutting services and raising fares not forcing PAT to gradually disappear, I beg to differ. It will spiral and change downtown drastically.
I think you're right - the next reduction in service, down to 50 routes, is a death-spiral. The effect on downtown, though, might be less grim than for suburban business zones. The PG has already run one story which mentioned the difficulty low-wage employees are having getting to their jobs in Robinson. The remaining routes are likely to continue to serve downtown, if for no other reason than that downtown is in the middle.
It's the outlying areas which will be cut off for anyone who doesn't own a car, primarily workers in maintenance and retail. In fact, taken far enough, it might even be good for downtown. A twenty-route system would effectively be little more than a shuttle service between the East End and downtown/Oakland. Outlying malls will eventually have to pay a premium for their employees, either by paying for their own transportation services or by increasing employees' wages enough to cover transportation costs. In effect, PAT's reduction to a skeletal system will probably mean a competitive advantage for downtown businesses.
Interesting observation on the effect on retail businesses, sqaurian. It might not hold true for office workers downtown, where the businesses are already paying a premium for that space.
It wouldn't be that difficult to project the effects of increased fares and decreased services on the various sectors of the Pittsburgh economy and the geographical regions, I would think.
Just do surveys of who exactly is riding the busses now, when and to where they are going.
There will be a price point where commuting by car makes more sense. There will also be a point when service reductions make it too inconvenient to ride the bus.
Some of this data should be available now with the recent reductions in service.
This data collection and analysis should be done, but it probably won't be. Instead, we'll find out the consequences after they're already here.
There was nothing magical about the Japanese steel industry (the major competitor in that era). They simply had a better cost structure which made investment in new process technology profitable in Japan, but not here.
This is all a diversion, but Pittsburgh companies faced growing competition not just from Japan, but in many places in the world AND elsewhere in the United States. And in fact Pittsburgh steelmaking companies did invest in the new technologies, which are still operating today. But those new processes were far less labor intensive than the old processes.
So it is true that Pittsburgh lost its relative advantage--a large dedicated labor force--with the advent of the new technologies. But again, there is simply nothing labor concessions could have done to stop that from happening.
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As for cutting services and raising fares not forcing PAT to gradually disappear, I beg to differ. It will spiral and change downtown drastically.
But that isn't what you originally claimed. PAT's service reductions and fare increases are not being caused by some unexpected increase in legacy costs, but rather by a cut in PAT's funding, and I agree that without adequate funding, PAT will go into a death spiral.
As always, I think we need to be clear on what is currently happening. The state shifted its transportation funding, including its funding for PAT, from the general fund to a dedicated fund. To provide the necessary revenues for the dedicated fund, among other things the state planned to toll I-80. The feds have said the state cannot toll I-80, so the amount of money in the dedicated fund has fallen way short of what the state planned. This has led to automatic cuts in the state funding for PAT, which is forcing PAT to cut service and raise fares. This has also led to funding cuts for other transit agencies and road projects, and people have proposed various solutions to solving this general transportation funding crisis. There is broad support in the state legislature to do something, but Corbett is blocking action.
None of this is to deny that legacy costs are an ongoing issue for PAT. But they didn't cause the current cutbacks, the state slashing PAT's funding is what did that.
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