Port Authority CEO Steve Bland's remarks to the Authority's Board of Directors regarding the impact of the statewide transportation crisis.
Delivered during the Board's regular monthly meeting, May 28, 2010
Last month, I cautioned that we’d soon be grappling with the statewide transportation funding crisis, and now, that time has arrived.
Since I arrived at Port Authority in 2006, we've experienced great progress in many areas and also endured a few low points too. Through it all, we've focused on finding ways to improve the agency and how it serves this community, with a specific focus on efficiency. But as we all know, change isn't always easy.
We’ve trimmed routes, eliminated positions and scaled back benefit levels. As a board, you’ve made some very difficult choices in a relatively short amount of time.
It's paid off. These moves have saved some $52 million in annual operating expenses – nearly matching the $60 million called for statewide by Gov. Rendell's Transportation Funding and Reform Commission in its 2006 report.
The nearly quarter of a million riders who use Port Authority daily also have stepped up and are paying higher fares and are adjusting to changes in their longstanding commuting habits. We have done what's been asked of us, with the hope that the passage of Act 44 by state lawmakers would resolve our chronic budget crisis. We supported Act 44 and believed it was a step in the right direction.
Our actions have been widely recognized, both in Allegheny County and around the Commonwealth. But Act 44 has not lived up to the intentions of its creators, and we are now faced with a Statewide transportation funding crisis, which is particularly acute here in Allegheny County.
Today, we face a $50.6 million budget deficit and have little more than a month to find solutions. The good news is, it was a $52 million projected deficit last month when I reported to you. Frankly, we wouldn't be in this position today if Act 44 had delivered on its original intent.
State lawmakers did the right thing in 2007 by adopting this law. It was a bold and historic move to carve out a dedicated funding source for transportation. It was intended to be an adequate, reliable, predictable and growing source of funds for the upkeep of our extensive road and bridge network, as well as for the numerous public transit systems that dot the Commonwealth.
The reality is, now three years after its passage, those intentions have not panned out.
- First, in contrast with other areas of the State which saw significant increases in operating aid when Act 44 passed, Port Authority saw an initial reduction in funding when compared with the prior year.
- Second, since that time, annual growth in operating aid (intended to be inflationary in nature) has averaged just over ¼ % per year.
- Third, given the current recession and reliance on Sales Tax proceeds to partially fund the Act, we may actually see an additional reduction in funding next year.
- Fourth, when coupled with above inflationary trends in major expense line items like healthcare, fuel and (due to the 2007 stock market collapse) pension contributions; all beyond our control; our funding status was already precarious.
- Finally, and most recently, in April of this year, one of the most crucial underpinnings of the law – the tolling of Interstate 80 – was disapproved by the Federal government. This one decision alone had the effect of reducing the already inadequate transit funding level by 37-1/2%.
Early in my management career, one of my supervisors confronted me with a significant mistake that had been made by one of my staff. In one of those real learning moments that we all encounter from time to time, I tried to defend myself; saying “I wasn’t aware of the error,” and “I wasn’t the one who made the mistake.” My supervisor calmly told me “Steve, it may not be your fault, but it is your problem – fix it!”
Today, I would give that same message to our State Legislators. They didn’t create the current transportation funding crisis, but they are the only people who can fix it.
Governor Rendell and his administration have been very clear in their support for a fix. Now, that leaves only the Legislature to do the job. All we're asking them to do is finish what they started. This was the right move then, and it's the right direction now.
Without a solution, we will be forced to consider various scenarios to balance our budget. None of these fall into the category of “efficiency,” or “right-sizing.” They will all fall into the category of “draconian,” and “damaging.”
We will provide more detail over the next couple months, but they include several alternatives, including eliminating many more routes, cutting weekend and evening service, and increasing fares significantly.
No less important, more crucial “state of good repair” capital projects will be deferred, increasing the likelihood of further service disruptions as we’ve seen over the past month.
Whatever options we choose, it will touch every aspect of our community. It will affect union workers, corporations, schools, universities and medical centers; as well as all corners of Allegheny County. The cuts will impact the shape of Port Authority forever. We'll have no choice but to layoff hundreds of employees and shut down at least one bus division. The Port Authority that serves us today will not be the Port Authority that exists afterward. And I fear that, once it’s gone, it can never come back.
For a City its size, Pittsburgh enjoys one of the best transit systems and highest levels of ridership in the nation. The same can be said for our brothers and sisters in Philadelphia, and in many other smaller communities in the Commonwealth. Whether or not this distinction, and competitive advantage, can continue is now in play at the State level.
These are tough decisions and this is a crucial moment. We wish there was another option or more time to find a solution. We're out of options and out of time.
This Board will act on a budget next month and decide in July about service levels and fares. Public hearings will be scheduled shortly thereafter. Although we recognize the Legislature has many critical problems on their plate, and we truly wish they had more time to consider this one; we’ve simply run out of time. Obviously, we will be communicating all of these details to the public as they develop.