I mentioned the other day that the Port Authority is budgeted to spend more on retiree healthcare this year than diesel fuel. Today, let’s take a look at benefits more broadly.

Next year, the Port Authority will start paying more for retiree healthcare benefits than healthcare for active employees. What does that mean?

Four years ago, all benefits expenses (healthcare, life insurance, pension, etc.) equaled 28.2% of the Port Authority’s available revenue.  This year, benefits total 30.2% of the authority’s available revenue.

In four more years, benefit expenses will equal 40.0% of the Port Authority’s available revenue ($144.18 million in benefit expenses vs. $360.361 million in projected available revenue.)  That would mean that 40 cents out of every dollar would go toward healthcare, pensions, insurance, and Social Security/Medicare contributions.

Before a penny goes for wages or to fill up a bus with fuel or to print a monthly pass, 40 cents of every available dollar is already gone.  And the biggest single expense? Retiree healthcare.

The Port Authority literally will not be able to afford that. So, the only thing to do will be to cut bus and rail service. And, unfortunately, the jobs that are associated with that service.

It’s an unavoidable law of economics. The more something costs, the less you can afford to buy of it.

Posted by: Ken Zapinski