Port Authority: $7 suburban fares possible
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Fares on suburban commuter routes could rise to $7 or more and service could be slashed 25 percent or more as the Port Authority tries to dig out of its latest financial hole.
The authority faces a $50.6 million deficit for the fiscal year that begins July 1 despite three years of financial reforms that have produced $52 million in annual savings, CEO Steve Bland said.
State aid, which makes up about half of the authority's income, has not increased in four years and is scheduled to decrease by $25 million, to about $159 million, in the coming year because of the failure of the Legislature's Act 44 transportation funding law.
Enacted in 2007, it relied heavily on generating new toll revenue from Interstate 80. That plan was nixed by the Federal Highway Administration this spring, leaving the state with a giant deficit in its highway, bridge and transit budgets.
With no growth in revenue, Port Authority faces rising salary, health care, pension and fuel expenses, all of which are largely beyond its short-term control.
PDFIts drivers are among the nation's highest-paid at $24.74 an hour and are under contract through June 2012. The contract, hammered out in December 2008 after acrimonious negotiations, provided 11 percent in raises over four years. The authority's salary expenditures are expected to increase by $5 million in the coming year.
The contract saved the authority an estimated $93 million in retirement benefits over four years and raised employee contributions toward health care and pensions, producing what Mr. Bland called "one of the largest gains in the history of public transit" for the agency.
Still, employee benefit costs are projected to rise by $3 million in the coming year, pushed up by health care premiums. The authority expects to spend $70 million on health care, $32 million of that for retirees, who outnumber active employees.
"It's illegal for us to change that. We can't change that," Mr. Bland said.
Fuel costs are expected to jump by at least $6 million. The authority has been paying $1.98 per gallon, well below the current $3 retail price of diesel, but its long-term contract is expiring. It projects paying an average $2.62 in the coming year, spokesman Jim Ritchie said.
First Published June 14, 2010 12:00 am
