HARRISBURG -- Starting with union wages that it claims are the highest in the nation when adjusted for cost of living, a special audit ordered by a bipartisan state panel does not paint a pretty picture of the Port Authority.

The audit by the Transportation Funding and Reform Committee blames high labor, health care and pension costs of union and nonunion employees for much of the authority's financial problems. That includes early retirement and benefit programs for more than 3,100 retirees, who now outnumber active workers.

The report also holds management responsible for poor planning and route evaluation, low productivity and focusing on expansion projects at the expense of maintaining existing facilities and equipment.

A summary of the audit was released Monday, when the nine-member state panel issued its final report recommending raising $900 million a year in new revenue for roads and bridges and $760 million a year for public transit.

PennDOT Secretary Allen Biehler, once a high-ranking Port Authority administrator, said the fact that there are so many poor performing transit routes was "somewhat of a surprise," along with the audit's claim that union wages were cited as No. 1.

Also, the audit placed the hourly wages of bus-trolley workers at $20.50 when adjusted for the cost of living, compared to $16.01 at the Philadelphia-based Southeastern Pennsylvania Transportation Authority and $14.20 as the average for the nation's top 60 transit systems.

The authority has little control over wages and benefits. They are locked into a labor agreement until Aug. 31, 2008, a contract brokered by Gov. Ed Rendell after a threatened strike.

But Port Authority Chief Executive Officer Steve Bland said he is already taking steps to improve efficiency, cut costs and raise more money in light of a $31.5 million deficit the agency faces Jan. 1 for the final six months of the fiscal year.

They include a fare increase and service cuts proposed several times over the past three years but always postponed when the state provided emergency appropriations by switching federal highway funds for transit use.

Mr. Bland said the authority will hold public hearings in late January or early February in case the General Assembly and Mr. Rendell don't approve the new revenue measures in time. He said massive service cuts cannot go into effect before mid-June, however, because of preparations and union contractual issues.

"I don't think the [commission's] report will have an immediate impact," he said, at least not quickly enough to avert the authority's latest financial crisis.

Mr. Bland complimented the Transportation Funding and Reform Commission for recommending new ways of doing business.

"The commission has done a very thorough job of looking at the root causes of our transportation funding dilemma," he said. "The recommendations provide a meaningful road map."

A list of other noteworthy recommendations and special audit findings:

Payments into the pension fund that grew from $200,000 in the 1999-2000 fiscal year to $12.1 million last year are anticipated to be $20 million for the fiscal year that begins July 1, despite the fact that employees also contribute to their retirement.

While the region's population has shifted and sprawled in the past decade, the authority and six neighboring transit systems have done little to coordinate and integrate service.

No comprehensive standards are in place to guide staff on service levels and coverage for bus-trolley planning; and, despite all of its sophisticated computerization, the authority lacks a comprehensive database on running times, passenger loads and schedule adherence.

Fifty-six percent of capital funds are used for operating expenses, debt service and capital lease payments at the expense of equipment and facilities.