[PRCo] Re: *-->__Service__Adjustments__<--*

[Fred Schneider]

Jim Holland: 
You opened up a whole new area for me to study.  And it makes the church 
treasurer's job look simple! 

I note from Jim Holland's item that PAT needs to put pressure on the 
state legislature to get a dedicated source of money to run PAT.  I'll 
be honest Jim.  I did not open the URL.  I just read what you wrote. It 
matches what I found on the PAT website.   The locals must put pressure 
on Harrisburg.  That state is evil.  The capitol should provide transit 
in Allegheny County and assess the costs on the taxpayers in Kane, 
Bradford, Wilkes-Barre, Lancaster, Philadelphia and so forth.   Heaven 
forbid that we should pay for it locally.   I'm responding only to give 
my take on how the system works .... some of the answers go deeper than 
some will want to read.  The basic premise that I read into what Holland 
provided is simply that we must anger the public and deflect the anger 
so it burns someone else.   There is a correlary that it appears that 
the state has been more than adequately compensating the major transit 
authorities  .... in fact Lancaster has received such a surplus of money 
that they have been able to restore Sunday service and to add several 
routes!  And all this comes from the same PennDOT.    And there is a 
third point, and that is I'm not at all certain that I know what I'm 
talking about. 

As I weave this missive, I am sure I have made some mistakes.  After all 
it is incredibly difficult to interpret governmental budgets because of 
all the different pockets from which money moves.   I expect people who 
know a lot more than me to jump in any correct any false logic and I 
invite that, including, but not limited to, Ed Tennyson and John 
Swindler.  You'ns can give me a course in transit accounting. 

I'm not sure how to continue this preamble other than to say I tend to 
be very skeptical when a major transit authority issues a press release 
saying we will have to "raise fares" or "we are being forced to curtain 
service on X, Z, and DD lines, " or we must "eliminate evening service" 
because the state cut back on our grant moneys.  It is a very old game, 
similar to Pittsburgh Railways telling the press that they had to 
eliminate West End trolley service because the state would not let them 
on the new bridge (rather than admit it simply isn't profitable to stay 
there).    The object of the game is deflect as much anger as possible 
to someone else, and to stir up those people whose deflected anger will 
help you the most.  Which people?  Employees .... suggest layoffs ... 
because the TWU often contributes to state political election campaigns, 
they will press the case in the state capitol.  Welfare recipients .... 
a very large block of people.  Widows too.  Workers who are captive 
riders ... suggest cutting off the buses just before 9 PM so that the 
kids working in malls can't get home.  Parents ... cut Saturday service 
so Mom has to drive the kids to the mall.  You suggest the most damage 
you can and then deflect the anger on the state capitol and away from 
your own playing field.  Or maybe announce that you are going to 
eradicate all extra buses that simply run to serve schools.    It is a 
whole lot easier to con Senator Finias T. Phogbound into providing more 
money than to put up with locals if you try to run an honest business, 
raise fares to keep up with inflation, fix vehicles, and adjust 
schedules to demand.    It is also so much easier to get the state to 
pay for the inflation out of tax revnues.  Remember that the nickel fare 
in 1900 adjusts to about $5.50 today (and if you want to adjust for loss 
of taxes that transit paid, and lost efficiency of scale, maybe 
$7.00).   Seems to me that the transit bosses have pretty well managed, 
through capital grants and operating assistance grants from the federal, 
state and local governments to shift more than inflation onto taxes. 

II've done a little digging:    The 2003 estimate for state population 
(done by the US Census Bureau) is 12,365,455.  Allegheny County has 
1,261,303 people.  Philadelphia County is home to 1,479,.339 people 
while the entire SEPTA service area has a population of 3,875,021.  
PAT's service area contains about 10% of the state's people while 
SEPTA's region has 31% of the state population.  That might suggest that 
only 42% of the state transit subsidies should go to those two cities.  
We all know that will not work because there are huge areas in the state 
with no public transportation that don't need subsidies.       I have 
been unable to get a complete picture of how much money they get from 
PennDOT.  Perhaps John Swindler will help.  (He has said in the past 
that they get far more than their population share.)  But I cannot see 
that in the data I can get on the web. 

Now what do the budgets look like?  And, as you read these, remember 
that it is probably easier for a local politician to squeeze the 
testicles on a state politician than on a federal politician.  With that 
in mind, federal operating subsidies have dropped from about 20% of 
total  costs in 1980 to something over 6% today.  But the ever astute 
locals have figured how to capitalize maintainance (i.e. shift it from 
operating costs to capital) and get Washington to pay for it.  (This 
reads hire a consultant to review your fleet at midlife, write an 
overhaul bid including spare parts for the future, and then ask 
Washington for the money.  We used to call them operating expenses.)  
But I think state money has more than made Federal losses.  I found one 
website that showed the PennDOT subsidy level for local and area transit 
was $722 million in 1999-2000, it was $797 million the next year, and 
$811 million in 2001-2002.  I could not easily find 2003 data.  The 2004 
budgeted subsidy is $881 million.  If my income had gone up 22% in a 
period when the consumer price index went up only 10%, I think I'd start 
looking into a time share in Switzerland for the summer.  ( I also 
recognize that one of the most volatile parts of the CPI is motor fuel, 
but, like the airlines, maybe transit routes also need to be rationalized.)

Now how much of that state money goes to Philadelphia and Pittsburgh.  
This becomes very difficult to ascertain because it comes out of so many 
different pockets. The current SEPTA budget shows $214 million for 
operating assistance and another $54 million for asset maintenance, a 
total of about  $269 million, or about 30.5% of the operating assistance 
grants ... damn close to their share of the state's population.   
However, I think there was another $6 million added to that after Gov. 
Rendell releasekes about 31.2 percent of the state money. 

I cannot find anything  on PAT's budget ... I have looked at their 
website.  The portion on the current crisis is particularly confusing, 
designed to obfuscate, and set up  to throw the blame elsewhere ... 
there is one section on how to get to your legislators.    The most 
confusing is the shortfall that shows PAT last $912 million in PTAF 
taxes (whatever that may be) and $500 million in general fund operating 
subsidies since 1991.   That page (under 
www.portauthority.org/funding/pagGOShortFall.asp)  contains two charts 
without any explanation to tell anyone other than a transit budget type 
what it means.  For all I know it could mean shortfall under what 
someone dreamed they should have.    I cannot even tell what they got in 
2004.  Is is $250 million?  Is it $190 million?  $350 nmillion?  $280 
million?  Or is the shortfall what they lost because they needed a 46% 
match?  Some combination.  None of the above?  All of the above?   
Either they don't know how to produce something meaningful or something 
meaningful would be a curse.   Quite honestly, I would like someone out 
there to explain it to me. 

There is another point that might be brought up.  SEPTA must recover 50% 
of its operating costs while PAT needs to recover 46% according to state 
law.  Act 129 was apparently a way to force some accountability onto 
SEPTA and PAT rather than have them expect the state to constantly make 
up for their problems.  This same provision does not apply to smaller 
systems in the state.  One might think this word "recovery" means fare 
box revenues.  No so.  There are other applicable state subsidies that 
cover part of that too.  For example, SEPTA receives $53 million in 
state monies to pay for free senior citizen rides ... I think it mostly 
comes from the state lottery.  That is part of the 50% that the SEPTA 
must count as recovered money.   It comes from the state and is dropped 
into the farebox to match the state operating grant!  The concept of 
different pockets.  (And that is why I want John Swindler to tell me 
what I'm missing here.)  The SEPTA budget shows some other subsidies 
.... $56 million federal, 63 million local, 56 million for lease costs / 
debt services (is this one of those games where you sell your buses to 
someone else, take a profit and then rent them back????), and 42 million 
for route guarantees (beats me who paid that kind of money to guarantee 
a service). 

There is one principal applicable to  many jobs outside of manufacturing 
and sales, and it applies very strongly to government positions.   
Executive directors and managers salaries are, for want of any better 
criteria, based on how many people work for them.  (In manufacturing and 
sales it is based on profits.)  The more people who work for you, the 
more money you get.   As an example, when I started with the state of 
Pennsylvania, we had four different salary categories for managers in 
state employment offices.  All were based on how large the office was.  
A promotion was to a larger office. The regional directors above them 
came in two categories, of course Philly with all larger offices, 
deserved a Manager 6 position.   Promotions in transit are pretty much 
the same ... you move from a small town to a larger town to a still 
larger town to a city and the salary keep going up.  And, as long as you 
can get adequate federal and state money, you keep your salary. Get more 
money and you can negotiate a salary increase.  (Is it not true that 
most transit kingpins are really fund raisers who know little about 
their own system?  I can cite an example of one SEPTA Executive Director 
riding the Route 100 (the P&W) who ask a lower level employee beside him 
if that line was inside the city of Philadelpha.  Knowing the system is 
obviously less important than knowing how to pry money loose.)   I once 
had a feel for what those transit executives made.  I do not any more.  
But back in the 1970s and 1980s there were a number who made more than 
the governors in their states!   Obviously, cutting costs, rationalizing 
service, raising fares, playing hardball with the unions (sorry Jim) 
only anger politicians above you.  Keep a nice tranquil sea, and you 
live a long and comfortable life.   I think it is also based on the 
principal that tax payers pay little attention to where the money 
goes.   (it's easy to accept giving away 35% of you income when someone 
tells you that the Sweedes and Germans pay over 50%.) 

If I look at the Philadelphia transit guide today, I see most of the 
routes that were there in 1950 are still being operated.  That would 
make sense if the same number of people lived in and worked in the city 
as in 1950 but we know that isn't true.   Philadelphia had more than 1.5 
million in 1910 and over 1.8 million in 1920.  If my memory is working, 
it topped out at 2.2 million.  Today the estimate is fewer than 1.5 
million.  Obviously the city transit needs are no where near as great 
now as they were in 1920 or 1944. So why do all the north-south streets 
need transit?  Why cannot people walk an extra block or two?  Because 
someone would call the local politician to complain about SEPTA.   I'm 
always amazed when I go to King of Prussia that  I seem to always see a 
city bus on route 202 somewhere between the turnpike interchange and 
Henderson St., where I turn off.  And most times the load is 2 or 3 
people.    Yes, all of you, I know it has to run empty in order to get 
Montgomery County politicians to give money to SEPTA.   I also see PAT 
bus stop signs  on some of the most obscure back roads in Allegheny 
County, all because Bigi, or Oriole, or Mr. Deere or the McCoy's or 24 
other family bus companies were once there.

Now, someone ... answer me .... is there really a funding crisis?

James B. Holland wrote:

>({[pat]}) budget proposal includes employee layoffs, a fare hike and no 
>rail or bus service after 9 p.m. or on Saturdays and Sundays.       
>This  *may*  put pressure on the  state legislature to come up with a 
>dedicated source of transit operating funds and pick a tax mechanism to 
>pay for it.        Projected transit deficit is $30 million.       A 
>fare hike would occur in February 2005; the service cuts in March 2005.
>
>What's the scuttlebutt around town???????
>
>
>http://www.portauthority.org/grow/pgPress.asp#hearing
>
>
>Jim__Holland
>
>
>
>  
>