Allegheny County Chief Executive Dan Onorato yesterday announced he will withhold funds to the Port Authority until it restructures its labor costs, even if the two new taxes he proposed to fund mass transit are approved.

Mr. Onorato, who initially promised to withhold Port Authority funding during his budget presentation last month, made it official yesterday, when he signed an executive order restricting any new county funds from going to the authority until its labor unions make certain concessions.

"I'm not going to release money to them until they further restructure their costs," Mr. Onorato said. His 2008 budget, a $727.5 million proposal, calls for funding of mass transit using a new 10 percent tax on poured alcoholic drinks and a $2-a-day tax on car rentals.

The Port Authority's current three-year contract with Amalgamated Transit Union Local 85 will expire in June, and Mr. Onorato hopes Local 85 will accept labor concessions similar to those implemented for management and nonunion employees in March.

Otherwise, he said, he will withhold the county's $30 million subsidy to the Port Authority. The county's subsidy is critical for the authority to leverage state matching funds.

"I hope that they look [at the concessions] and come back with some recommendations," Mr. Onorato said. "If they don't restructure their costs, the Port Authority will be bankrupt in 18 months."

In March, management and nonunion employees at the authority accepted concessions that included a wage freeze, higher contributions for health insurance, and elimination of early retirement and retiree health insurance.

Patrick McMahon, president and business agent for Local 85, could not be reached for comment yesterday, but he has complained about Mr. Onorato's pressure on the authority during its union negotiations.

Port Authority spokesman Bob Grove said the agency will try to address its labor costs in contract negotitions with Local 85. "We are obviously going to be looking to achieve some cost savings through the collective bargaining process," he said.

Comparing Allegheny County Port Authority legacy costs of $29 million to the Philadelphia-based Southeastern Pennsylvania Transportation Authority, which is three times larger than the Port Authority, and will spend $7.3 million on retiree health care this year, Mr. Onorato said the authority must re-evaluate its costs before he can approve more new funds.

He doesn't need County Council's approval to withhold the money, he said.

During an especially slow-moving budget process this year, council's Budget and Finance Committee Chairman Bill Robinson has said council has the right to determine how county money is appropriated and that the county should not involve itself in the Port Authority's contract talks.

Mr. Onorato disagrees.

"It's a check and balance," he said. "Council appropriates the money, but it cannot dictate how I spend it."