Thursday, March 17, 2011

All Hail Lenzner

On March 27, Port Authority of Allegheny County will cut routes, frequencies, buses, and drivers from their payroll in an effort to survive.

Private bus company Lenzner Coach Lines is taking up the slack for one route. They are paying Port Authority for the ability to offer reduced service. There will be no free senior and student rides. There will be no discounted disability service. There will only be 4 roundtrips per week day with no weekend trips. You will have to reserve an entire month's worth of trips to step on the bus. If Port Authority offered that service for the bargain-basement price of $3.25 each way, there would be riots in the street. But Lenzner will be charging $5.00 each way and make a profit. Yes, Port Authority, people would rather pay higher fares than not take the bus.

Of course, the Port Authority brought in only $93 Million in operating revenue (i.e. fares) in 2010. They had $397 Million in expenses. Employee wages and salaries alone accounted for $143 Million. Yes, current fares don't even cover current employee wages. That doesn't include employee benefits (like the costly pension system) which were an additional $126 Million in 2010. These are astounding numbers which actually tell you that fares mean very little in the grand scheme of things.

The state helped out significantly by dropping $184 Million in the bucket last year. The county offered a relatively piddling $27 Million on top of that. With the cost of pensions continuing to explode (a $13 Million increase just last year), reading these numbers seems pretty bleak. Port Authority is not sustainable even if it could triple its fares and not lose any riders. State government led by Governor Corbett would rather just shut their eyes, plug their ears, and ignore the problem.

It's easy to blame Port Authority's runaway expenses. But if you think Port Authority's expenses are ridiculous, keep this in mind:
PennDOT alone has a budget of $3.8 Billion, which is completely independent from the Turnpike budget, and the thousands of Pennsylvania county municipality road budgets.

So in short, Port Authority needs to make these cuts. There is no knight in shining armor stepping in to pony up 10% more in funding every year just to cover increased pension obligations. And in 10 years, I won't be too surprised to learn that Lenzner is operating more and more of our bus lines and light rail. We've brought this on ourselves by blaming Port Authority and shutting our eyes. I just feel bad for Grandma.

My advice to Lenzner? Don't start offering any of those pesky pensions.


Vannevar said...

excellent post (as always). Lenzner's actions (while helpful, commendable, etc) shows the limitations of leaving public needs to "the Market". No senior/ student/ disability deals, no weekend service, you have to buy a month's worth of trips to step on the bus once.

That does help the middle-class people who'd rather not drive. It doesn't do anything for the struggling / unemployed / welfare folks who need a bus to get to a doctor/ part-time job.

The Market lets a business take the profitable parts of the opportunity and leave the Great Unwashed behind. I get that, it's what the Market does.

We want those folks to be able to ride the bus to get to the job / doctor/ school.

I'm disappointed in government abandoning the unwashed to market forces - which will cost taxpayers more in the long run.

Steven Bone said...

Sadly, the real cost of the average ride as a passenger on the Port Authority via bus, T, and/or incline averages out to $4.73. This assumes each and every person pays this amount for each and every ride. ($317.4 million in expenses to serve 67 million trips.)

I'd say that Lenzner's cost of $5 is not far off the mark of realistic costs to provide this service, especially considering that is one of the longer commuter routes - certainly longer than the average route.

Lets face it - the real costs of transit is high. Those with cars have registration, maintenance, insurance, fuel, parking, and vehicle costs - all of which add up to a pretty penny - ultimately much more than the $10/day that Lenzner is asking for.

I fail to see why the Port Authority refuses to charge rates that reflect their actual costs for (most) riders. It would be possible to use the state and local 'donations' to the Port Authority ONLY for fare subsidization of the proven destitute.