Plenty of culprits could be blamed for the financial hardships TriMet is experiencing.

A slow economy and high unemployment for the past four years haven't provided any lift to TriMet's main source of revenue, the payroll tax. And the agency also faces potential cuts in federal funds.

But at the heart of TriMet's fiscal woes is its struggle to pay for employee benefits that go so far beyond generous that they've become unsustainable.

The process of closing a $12 million budget gap for TriMet's 2012-13 fiscal year was difficult. The Rail Free Zone in downtown Portland will cease to exist. Fares will be increased throughout the TriMet system and some bus and MAX service will be trimmed. A proposal to end subsidies to free youth passes in Portland created a dust-up with Mayor Sam Adams.

But those cuts and conflicts may but serve as a warning of what's to come if the transit agency doesn't rein in costs driven primarily by employment contracts. An even better indication of that future will arrive later this summer if an arbitrator decides in favor of the transit union and adds another $5 million in expense to this budget, thereby triggering more cost reductions.

TriMet is supposed to be one of Portland's treasures - a system that provides transportation to hundreds of thousands of people who otherwise would be jamming roads or unable to get from point A to point B.

That system, however, cannot be maintained unless TriMet begins to bend the upward curve in personnel costs toward a lower trajectory that's more supportable.

TriMet General Manager Neil McFarlane, who inherited this mess, has talked openly and often about the challenges of maintaining service and also sustaining promises made to employees. The TriMet health plan for unionized workers, for example, is one of the most munificent in the nation, costing more than $18,000 per employee each year - an expense that's growing. If the health plan isn't amended significantly, it will equal more than half of TriMet's underlying payroll tax revenue by the year 2020.

Arbitration reform needed

For TriMet to continue to exist, something has to give. TriMet administrators, lead by McFarlane and union leaders, lead by new president Bruce Hansen, must negotiate contract agreements that give more consideration to riders and to communities served by transit.

TriMet also should push for reforms in the state legislature to amend the current practice of binding arbitration, which takes away the union's right to strike but also results in contracts that cannot be supported forever. At the very least, lawmakers should allow the needs of transit users and communities to receive greater weight during arbitration.

It's not as if the communities don't care. TriMet's just-completed budget process proved this by eliciting 16,000 comments from local residents and voluminous testimony at public hearings and meetings. Western Washington County leaders are still pushing big dreams (extending light rail to Forest Grove) and small improvements (extending the 57 bus line to Forest Grove High School).

Transit users want to know that the agency they support with their tax dollars will be viable for the long term and capable of providing better - not diminishing - service. Such reassurance will come only if TriMet and its employees can agree to compensation and benefit packages capable of being supported by the fares and taxes already in place.

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