Port Authority Looks To Reign In Legacy Costs

PITTSBURGH (KDKA) — The Port Authority says drastic union concessions are needed in order to pull the transit system out of what it describes as a “death spiral” – a future of service cuts and fare hikes.

So, the Port Authority is asking the union for its deepest concessions ever – in order to reign in so-called legacy costs, which are benefits paid to the authority’s retired workers.

Every time you feed the fare box on a Port Authority bus, you’re paying employees who are no longer there – retirees who receive pensions and health care benefit for life.

Port Authority executive director Steve Bland says funding these so-called legacy costs are crippling the system.

“There are other costs but this is the 800 pound gorilla in the room,” said Bland.

Port Authority has more retired employees than active ones – that’s 2,500 current employees compared to 3,300 retired workers. Each is guaranteed health care for life – a bill that comes to $34 million a year.

Bland says the authority needs to show Harrisburg it can rein in those costs, and then ask the state for more revenue.

“If both of them don’t happen, it’s a rapid decline into what we call the death spiral,” he said.

To avoid that, the Port Authority says it’s floated a new proposal to the union – a wage freeze and the total elimination of post-retirement health care for active employees. At meetings, the idea has been rejected out of hand.

“It don’t happen here, because we’ll fight it to the last man and you can take that to the bank,” said Charles Jefferson, a retiree.

Union President Pat McMahon says the union’s willing to talk about post-retirement health care but not it’s elimination.

“Legacy costs – health care – we absolutely recognize something has to be done and we’re willing to sit down and do something reasonable, but for Steve Bland to say we have to cut it out tomorrow and were done – that’s the fix; guess what, that’s not happening,” McMahon said.

If the elimination of these health care benefits isn’t the answer, Port Authority and the union will have to come up with other solution quickly if the transit system is to pull out of this death spiral.

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  • Anonymous

    they should have to pay there own health care after retirement. why should the taxpayers have to foot the bill.

  • richard head

    take the bus and leave the driving to us

  • Thomas J Duttine

    How much does Bland and all his cronies get?? Does management get health care after retirement?? How much of a pay cut did they take??

  • JSmythe

    Management has taken a pay cut. They don’t get post-retirement health insurance.

    The days of the big union perks are over.

  • Ray

    Yeah, you’ll be taking that to the bank once they declare Ch. 11 bankruptcy and you get NOTHING. You can’t win. Unions are being systematically destroyed at a record pace.

  • Joe

    just imagine the city of Pittsburgh without mass transit………. YEAH RIGHT

  • Hit Boy

    If it costs $5-$6 to ride the bus then that’s what what should be paid by the riders. Everyone is tired of hearing about how much money PAT needs. Maybe they should declare bankruptcy and reorganize with new drivers and new management…..THESE SURE AREN’T WORKING!!

  • Anonymous

    There is a huge difference in a “private” company choosing to offer lifetime healthcare and a fabulous retirement VS a public entity like PAT doing it. All “public” and state employees who are retired need to be off the back of the tax payers. Save for your own retirement, get your own healthcare…

  • Dan

    I hate these articles…lip service year after year. EVERYONE knows that these pension/benefits packages are unsustainable yet here we are again. Please, please just GO UNDER already. We’re tired of hearing/paying for it.

  • Inside Pat

    After working at PAT for 23 years I was told by Mr. Bland that I would no longer have post retirement benefits. If I would have known 23 years ago I would put money away to cover these costs (or find a job that did) but I was used as an example to show the cost cutting effectiveness of Mr. Bland. Local 85 members can still retire up to next July and receive Health Care for life.
    PS. For all you Idiots out there— At one time, many, many years ago all bus service was done by Private Bus Companies—-it didn’t work in the 60’s, and in will not work in the new millennium.

  • Flight Attendant

    Welcome to the real world US Air changed their name and flew out of town

  • Anonymous

    who does mr. jefferson plan on fighting? Is their anyone out their that cares what happens to him.

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