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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