Friday, June 24, 2011

Port Authority Board Adopts Fiscal Year 2012 Budgets

Port Authority's Board of Directors today adopted a $370.2 million operating budget for its Fiscal Year 2012 (July 1, 2011 – June 30, 2012) that maintains service, staffing and fares at current levels.

"There's a window of opportunity now for leaders across the state to finally resolve the transportation funding crisis," said Authority CEO Steve Bland. "Collectively, we can establish a more reliable and sustainable funding source to ensure public transportation continues benefiting riders in the Pittsburgh region and throughout the state."

The Authority is able to stabilize service, fares and staffing through June 30, 2012 only by using most of its remaining reserves and the remainder of the one-time $45 million emergency contribution made by former Gov. Rendell. If leaders are unable to agree on a transportation funding solution by the end of FY 2012, Port Authority then would face a significant deficit for FY 2013 and be forced to cut more service to offset the reduction in funding.

"We're very encouraged by the widespread interest in protecting our transportation programs in Pennsylvania and Gov. Corbett's initiative to seek potential solutions through the Transportation Funding Advisory Commission," Bland said.

The Commission is expected to issue recommendations by Aug. 1.

The Authority's balanced budget follows a rocky year for transit riders. The Authority was forced to increase fares, reduce service by 15 percent in March and eliminate 260 positions to help offset the state funding cuts.

In Pennsylvania, all public transit systems receive a significant level of funding, based on a formula, from state government to help provide daily services. At Port Authority, this amount is supposed to be $184.1 million. However, a state budget shortfall was caused last year primarily by a federal decision to not allow Pennsylvania to generate revenue by charging tolls on Interstate 80. In addition, state sales tax receipts were down.

A few facts about this year's budget:

  • $370.2 million total expenses, up from $356.6 million – about a 3.8 percent increase.
  • Approximately $40 million in one-time use of reserves and the remainder of the state’s $45 million emergency contribution are needed to balance the budget.
  • Port Authority projects ending FY 2012 with only $10 million in reserves.
  • Union employees will receive a 3 percent contractual wage increase. Non-union employees are under a wage freeze.
Capital Budget

The Authority's Board also approved capital improvement budgets for two years. The fiscal year 2011-12 budget totals $182.9 million and the fiscal year 2012-13 budget totals $149.2 million.

Operating and capital improvement budgets serve different functions. Capital funding received from local, state and federal sources that is designated for specific projects cannot be used for operating expenses.

The capital budget reflects how Port Authority maintains its extensive system, including 26 miles of light rail tracks, nearly 15 miles of busways and roughly 800 vehicles. Major projects such as the North Shore Connector extension are paid with capital budget dollars, not operating dollars.