DECEMBER 6, 2010

Super Rendell Finds Bailout For Failing Port Authority

Gov. Rendell has "found" $45 million dollars of Federal Transportation Funds (for Economic Development) to bail out the failing Port Authority. Proponents claim it as a success, stating that it will save more than 500 jobs and postpone cuts to bus and port services.

Pittsburgh's Port Authority was projecting a $47 million deficit in its 2010-2011 budget. In order to prevent the Port Authority's threatened closing of 45 bus routes and stoppage of some weekend and night services, Gov. Rendell thought it to be in the best interest of the taxpayers to save these jobs and fund the deficit.

Unfortunately for Pennsylvanians, anytime the government says it saved jobs, it's usually far from the truth. Take a similar situation where the governor found $700 million to give to SEPTA, PAT, and other transit agencies to "give them time to find a solution." They didn't—with costs still rising, these organizations are pushing to tax other sectors of the economy in order to subsidize themselves. If anything, all this $45 million does is postpone the reforms necessary to make the Port Authority cost efficient.

The last question one should ask is: with a multi-billion deficit, and constant moaning about structurally deficient bridges, why was $45 million just laying around for Gov. Rendell to give away?

posted by NICHOLAS FETT | 00:00 PM | 0 comment

AUGUST 6, 2010

SEPTA's Extravagant Spending

Earlier this week, the Pennsylvania Senate Transportation Committee heard testimony from SEPTA officials defending their lavish spending habits during a state transportation funding crisis.

Senator Rafferty expressed concern, saying:

Perception is reality. In [these] tough economic times when we’re making cutbacks … when [people] hear reports about Christmas dinners and they hear reports of gifts, I think the [SEPTA] chairman and the board ought re-evaluate that position. (Subscription)

Fox 29 found SEPTA officials spent:

• $15,000 on three Christmas parties for their unpaid board,
• $1,100 at the Fountain Restaurant for a going away party for a former General Manager,
• $3,600 for a meet and greet with legislators at a Harrisburg Restaurant,
• and $18,000 on three first-class tickets to Seoul, while another executive made the same trip for $1,300.

SEPTA, like PHEAA and other state entities that compete (or would, if not for laws granting them a monopoly) with private companies, is continually criticized for luxurious spending. So why does it continue? It continues because these entities are not accountable to their customers or beholden to a bottom line. As long as they have friends in Harrisburg, the taxpayer abuse will continue.

Mass transit services can be provided more effectively and cheaply by competitive contracting. It's the only way to stop SEPTA's overspending while dramatically improving mass transit service.

posted by ELIZABETH STELLE | 02:48 PM | 0 comment

APRIL 27, 2010

PA Needs Infinity Dollars to Repair Roads

The Tribune Review has a story that transportation advocates are now claiming that Pennsylvania needs $3 billion in additional revenue per year just to keep roads and bridges up to standard. This is almost double what the estimated need was a few years ago, and far higher than the $400-plus million the state would have gotten from tolling I-80. It seems that when it comes to transportation - like many other areas of government spending - the solution is always "more money."

Here, however, are some free-market solution, that don't involve higher taxes on Pennsylvanians

• Transportation Funding Solutions Require Reforms and Reprioritization
• Report: The Emerging Paradigm: Financing and Managing Pennsylvania's Transportation Infrastructure
• Commentary: Five Alternatives to Tolling I-80
• Policy Brief: Mass Transit Reform: Lessons for Pennsylvania
• Policy Brief: Paying for Our Paving: Why Leasing the Turnpike Makes Good Economic and Public Policy Sense
• Reason Testimony: Modernizing and Expanding Pennsylvania's Transportation Infrastructure through Public-Private Partnerships

posted by NATHAN BENEFIELD | 09:29 AM | 3 comments

MARCH 15, 2010

SEPTA and I-80 Tolling

While the transportation industry is propping up the myth that I-80 tolls won't be used for transit in Pennsylvania, SEPTA officials are busy lobbying for I-80 tolling in order to get more money, suggest they'll be "back into that spiral we were in 10, 15 years ago" without that extra money. One of these days I fully expect SEPTA to come to the legislature and admit that they need infinity dollars to keep functioning.

Proponent of I-80 tolling are pushing Sen. Arlen Specter to "go see the president and get this done." This, despite the fact that the decision rests with the Federal Highway Administration, and the law covering tolling of current freeways forbids using tolls for transit and diversion to other projects. But I guess if Sen. Specter and President Obama both want it done, laws don't matter.

posted by NATHAN BENEFIELD | 08:37 AM | 0 comment

JANUARY 19, 2010

Five Alternatives to Tolling I-80

A recent Pocono Record article calls the Pennsylvania Turnpike Commission's proposal to toll I-80 "a riddle with no easy answers" (HT GrassrootsPA). However, there are alternatives to that plan, which is little more than a tax on I-80 drivers, that would free up dollars to be spent appropriately on transportation infrastructure.

1. Repeal prevailing wage laws. Prevailing wage laws drive up costs for construction. State mandated wages for government projects 40% higher, on average, than the private sector pays for the same work. Repealing these laws, and paying market wages, would free up hundred of millions, if not billions, for highway construction and repair.
   
   
2. Stop redirecting highway and bridge money to other purposes. While the transportation community bemoans the need for additional funding, citing structurally deficient bridges and dilapidated roads, hundreds of millions of dollars each year are redirected from road maintenance to bike trails, beautification projects, and new roads named for politicians. Just recently, Rendell gave $7 million from a mysterious pot of money in PennDOT to give bonuses to SEPTA workers, rewarding them for striking on election day.
   
   Furthermore, Act 44 - which includes tolls on I-80 and higher Turnpike tolls - promises $250 million annually for mass transit even if I-80 isn't tolled (and a ten-year average of $414 million to transit agencies if it is). These toll dollars should not be used to prop up inefficient transit agencies, but should be dedicated to bridge and highways - specifically those used by Turnpike drivers.
   
   
3. Enable public-private partnerships. Public-private partnerships (P3s) are the emerging paradigm in transportation funding. While the proposed Turnpike lease received the bulk of media attention, P3s are far more expansive than that. Using P3s on new construction - express lanes, high occupancy lanes, new highways, new bridges, and the like - are much less controversial, and could happen now. Len Gilroy of the Reason Foundation outlined the potential for P3 in Pennsylvania in a recent testimony.
   
   
4. Eliminate the Pennsylvania Turnpike Commission (PTC). Instead of giving the Turnpike Commission control over I-80, we should eliminate what is among the most corrupt and inefficient agencies in the country. Doing so, rolling the Turnpike Commission into PennDOT, and eliminating an unnecessary bureaucracy (e.g. the PTC employs one "manager" per mile of road) would offer substantial saving in transportation spending.
   
   
5. Privatize rest stops. While the state spends taxpayer dollar to manage rest stops along its highways, they could make money by privatizing them, and leasing out the property to restaurants and service stations. While service plazas can be found along the Turnpike, federal law prohibits this amongst freeways. However, as Ronald Utt points out in a recent Heritage paper, this law was intended to protect existing businesses in the 1950s - most of which no longer exist - and there is little will to enforce it. In fact, Pennsylvania already has privatized several rest stops, but there is opportunity to do much more - for instance, along I-80.
   

The idea that we simply need to spend more money in transportation - and raise taxes or tolls to do so - is wrong-headed. Until the state starts spending current tax and toll dollars efficiently, and capitalizes on opportunities for private funding, lawmakers have no reason to ask taxpayers and drivers for more revenue.

posted by NATHAN BENEFIELD | 10:15 AM | 2 comments

DECEMBER 18, 2009

PA Highway System Ranked 38th in Nation

Tony Phyrillas highlights Pennsylvania standings in the Reason Foundation's 18th Annual Highway Report. PA ranks 38 among the most cost-effective state-owned highway systems. The top five include small government states like North Dakota, South Carolina, and Montana. The bottom five are characterized by large burdensome state governments including New York, California, and New Jersey.

While Rendell is quick to press for more infrastructure funding, he consistently directs generous amounts of state funds to failing mass transit systems. Additionally, the questionable spending practices of PennDot and the Pennsylvania Turnpike Commission need to be addressed before we can significantly improve the cost-effectiveness of Pennsylvania highways.

posted by ELIZABETH STELLE | 08:03 AM | 0 comment

DECEMBER 4, 2009

SEPTA is Financially Sound?!

In a letter to the Philadelphia Inquirer, SEPTA general manager Joe Casey challenges our commentary in which we called for SEPTA to competitively contract routes and for barriers to public sector strikes. Casey says that SEPTA's pension "plan is fiscally sound", that "SEPTA is financially sound," and that our solutions are "simplistic alternatives."

Of course we were referring to the SEPTA that is expecting a $120 million deficit in 2011, and the one that reported in October an operating revenue decline of 4.6% over the previous year to date, while operating expenses had increased 2.5%. This sounds like the same definition used to tell us Fannie Mae was "financially sound."

SEPTA's two largest pension fund (SAM and City Transit) were funded at 71% and 61% of accrued liabilities - underfunded even by government standards - as of June 2007, according to SEPTA's latest annual report (page 43). This is, of course, before the massive decline in the market which hit all pension plans hard. I can't say why SEPTA hasn't made the latest data on pension plan values public, but I can't imagine the news will indicate "fiscally sound plans."

And instead of "simplistic alternatives" like mass transit competition, penalties for government workers who strike, or even pension reform, SEPTA supports much more complex and well thought out solutions:

1. More state money for SEPTA - almost $7 million from an unknown pot of money in PennDoT that Governor Rendell handed over to SEPTA for employee bonuses.
   
2. More state money for SEPTA - by tolling I-80 drivers to subsidize SEPTA, even though the road doesn't come near SEPTA's service area.

posted by NATHAN BENEFIELD, ELIZABETH STELLE | 10:15 AM | 0 comment

NOVEMBER 9, 2009

If Your Erection Lasts Longer than a SEPTA Strike ...

Alex Charyna points out this tidbit in the Philadelphia Daily News - one demand of the SEPTA union was more Viagra:

Yes, it appears that labor issues are not the only dysfunction troubling SEPTA workers. The Daily News reported that some are unhappy that their current health-care plans cover - and here it's important to use caps for emphasis - ONLY 10 VIAGRA PILLS A MONTH.

Some union members want the pill - again, excuse the shouting - DAILY, which makes you worry that every bus, trolley, and subway route has the potential to turn into an express, particularly during those problematic four-hour peaks in service.

posted by NATHAN BENEFIELD | 09:18 AM | 0 comment

SEPTEMBER 9, 2009

Let's Just Buy Everyone Flying Cars

The Patriot News reports on an insanely bad idea - taxpayer funded buses, then trains, from Lebanon to Hershey to Harrisburg.

First the study, funded by the transportation industry and conducted by an engineering firm, projects that buses would serve 17,000 riders per day - about four times what Capital Area Transit serves now (I'm assuming the daily rides are one-way, rather than round trip, if not, then only twice current ridership), and the annual cost would be $4.3 milllion ... one-fourth CAT's current costs.  Doesn't seem too realistic.

Then they recommend building a new rail line - with a $267 million up-front cost, or $191,000 per estimated riders (then a $12,000 per-rider annual cost). Couldn't there be a less expensive way to travel ... like giving rides on Airwolf?

posted by NATHAN BENEFIELD | 07:35 AM | 0 comment