Management & Operations

Dedicated state funding is critical need

Posted on April 1, 2005 by Paul Skoutelas

Pennsylvania is home to two of the nation’s largest transit agencies — the Southeastern Pennsylvania Transportation Authority (SEPTA) in Philadelphia and the Port Authority of Allegheny County in Pittsburgh — as well as more than 50 smaller public transportation providers in cities such as Harrisburg, Lancaster, Erie and Scranton. Like many other transit systems across the country, these agencies have been challenged with increasing costs in such areas as fuel, healthcare and pensions. In Pennsylvania, the lack of a truly predictable, dedicated and growing source of revenue for public transportation has made the annual challenge of balancing operating budgets particularly difficult and has required agencies to seek innovative ways to increase revenues and decrease costs. Winning over elected officials
For example, over the past eight years, the Port Authority has achieved more than $187 million in operating savings as a result of wage, salary and hiring freezes; the elimination of 141 jobs, including 57 administrative positions; decreased workers’ compensation costs and personal injury and damage claims; reduced inventory levels; and significant reductions in general administrative expenses, including travel and marketing. During much of this same time period, the average annual growth of the agency’s operating costs has been 1.9% — well below the rate of inflation. The Port Authority’s ability to contain its costs has been recognized in two independent audits, which have enabled the agency to secure and gain the confidence of elected officials. Historically, the state has played the largest role in funding the operations of transit agencies. The General Assembly, as part of its annual budget process, sets the levels of direct operating assistance and distributes those funds by formula. In 1991, it also established the Public Transportation Assistance Fund (PTAF), which provides the second highest source of operating assistance for transit agencies. Unfortunately, both General Operating Assistance and PTAF funding have not been able to keep pace with the inherent costs of providing public transportation in Pennsylvania. In addition, the overall downturn in the economy since 9/11 contributed to the Port Authority, SEPTA and other transit agencies having to raise fares and reduce service levels — with predictably negative results. Ridership fell, mobility was reduced and customers had to worry about the future of their transit services. A gubernatorial intervention
Showing an understanding of the problem and awareness of the serious ramifications of not properly funding transit, Gov. Edward Rendell in late February announced a plan to “flex” federal highway funds to state transit agencies through December 2006, including $68 million in the current fiscal year for the Port Authority and SEPTA. Showing their support for public transportation, the Southwestern Pennsylvania Commission and the Delaware Valley Regional Planning Commission both approved the transfer of these funds. This action forestalled fare and service changes at both agencies. It was welcome news for thousands of transit supporters, many of whom recently gathered in Harrisburg to lobby for increased funding. Clearly, public transportation has the support of the governor and many members of the General Assembly. In fact, over the past year, more and more discussion has been taking place on how to get dedicated funding for public transportation. At no other time has Pennsylvania ever been closer to the passage of such legislation. The discussion that has been percolating for years is growing in intensity, and with it so is a promising future for public transportation in one of the nation’s most transit-dependent states.

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