The Economic Crisis Rolls on in Cities like Pittsburgh

[M II A II R II K]

The Economic Crisis Rolls on in Cities like Pittsburgh


May 6th, 2012

By Yonah Freemark



Read More: http://www.thetransportpolitic.com/2...ke-pittsburgh/

The board of the Port Authority of Allegheny County, serving the Pittsburgh metropolitan region, announced last week that it would have to cut services by 35% by September 2 — the largest cut ever for the agency — if it is not provided an increase in state aid. The agency expects that it will have to increase fares and lay off 500 workers. This comes a year month after the agency reduced services by 15%. The service cuts planned would be, suffice it to say, devastating.

- From Boston — where a 23% fare increase and service cuts were approved a month ago — to Athens, Georgia — where night bus service is expected to be fully eliminated — American cities continue to cut their transit offerings. Friday’s U.S. national jobs report, which showed about 20,000 fewer people working in transit operations in April compared to a year ago (a 5% decline), only reinforced the fact that when it comes to transit service, cuts are the rule of the game. What a paradox: These cutbacks are enforced even as fuel prices continue to rise and the demand for public transportation seems likely only to increase.

- At least part of the problem is the reliance on local and state revenues to subsidize operations costs for bus and rail services in cities across the country. Whereas the federal government was willing to cover more than half of the costs of a $523 million light rail expansion to Pittsburgh’s North Shore — opened in March — it can do nothing to cover the agency’s $64 million operating deficit expected for next year because of Congressionally imposed rules about what Washington can and cannot pay for. The counterintuitive result is that cities that are doing well economically are able to pay for improved transit services whereas those with many economic problems — the ones where transit is often needed most — are left to cut operations dramatically.

- 49 of 50 states, unlike the federal government, have some form of balanced budget rule; cities are almost never able to operate in the red. Meanwhile, competition between states and cities encourages them to lower their tax rates, making the provision of public services all the more difficult. Only Washington is able to borrow during recessions, and thus it must play the role of providing the back-up for public services like transit agencies that are left behind by declining local revenues. Yet current law makes that impossible. The result is reduction in provision despite an increase in need. An important report from the Center on Budget and Policy Priorities last year, however, suggests that states do have more of an ability to invest in public service provision than they are typically assumed to have.

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