Chicago Rail Tragedy

A sad story from Illinois: Phil Pagano, the head of Metra, Chicago’s commuter-rail agency, was recently accused of granting himself an unauthorized $56,000 bonus (on top of his regular pay of $270,000) in 2009. The agency initially denied it, but then announced it had suspended Pagano during its investigation, which later revealed that he had written himself forged signatures on checks totaling “about $100,000” (update: now up to $475,000).

In response, a few hours before a planned meeting with the agency’s board of directors, Pagano walked in front of one of his trains and stared into the face of the engineer as it ran him over. In his pocket investigators found “a copy of Metra’s procedures on how to handle a service disruption after a suicide.”

Without making light of this tragic situation, faithful Antiplanner ally Peter Samuel asks a good question: Why do we pay transit agency executives so much money in the first place? Samuel points out that the Illinois Tollway carries ten times as many passenger miles (and infinitely more freight) as Metra, yet the CEO of that agency makes only $189,000 a year.

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One answer to Samuel’s question is that running a rail transit agency is a lot harder than running a highway system. For one thing, transit agency heads must be constantly seeking funds to make up for the fact that user fees cover none of the capital costs and only a portion of the operating costs (in Metra’s case, less than 35 percent), while the highways (especially tollways) largely pay for themselves. For another thing, rail transit agencies have the almost impossible mission of attracting people out of fast, cheap, convenient autos into slow, expensive, and inconvenient trains, while tollways offer people an opportunity to speed their travels using a technology they have already decided to use. Instead of suggesting we should pay rail transit agency executives more, however, these are arguments for not having rail transit at all.

The problem is that we have so glorified transit as a “sustainable” forms of transportation that the people who build and run these systems feel entitled to huge rewards at taxpayer expense. For example, the highest-paid city employee in San Francisco is the head of the transit system, while the highest-paid city employee in Madison is a bus driver (and San Francisco bus drivers are also pretty well rewarded). One can only wonder if such propaganda is what made Pagano feel entitled to give himself $100,000 in bonuses.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

14 Responses to Chicago Rail Tragedy

  1. Scott says:

    And the new appointed head of the CA HSR will be making about $400,000. (Sorry, don’t have link) He will be moving to CA, from France.

  2. C. P. Zilliacus says:

    Scott wrote:

    > And the new appointed head of the CA HSR will be making
    > about $400,000. (Sorry, don’t have link) He will be
    > moving to CA, from France.

    Almost. $375,000 according to this article in the L.A. Times.

    Even in California, that’s a lot of money for a public sector employee.

  3. Adam says:

    I have to really question your timing and sensitivity with this article. This post is in extremely poor taste – especially your inference that Pagano felt “entitled” to give himself bonuses. You don’t know the man, and you have no clue what he may have been thinking. Leave it to the investigation – which presumably will deal with the actual facts at hand – to decide if the bonuses were legal or not, and let’s leave personal attacks on a dead man out of the discussion.

    This may be your worst-ever post.

  4. Scott says:

    C. P. Zilliacus,
    Thanx for the exact figure & link.
    Not sure if you think that you were trying to correct me.
    “About” covers a range, right?
    Such as for 400, that could mean 350-450.
    “Almost” could mean 350-399.
    That salary could be justifiable, for a private business that covers costs, but for the public sector, it is questionable, including university heads.

    Adam, my question on sensitivity is why didn’t Pagano commit suicide earlier, before stealing taxpayer money. Oh, too soon?

  5. Adam says:

    @Scott: And that may be YOUR worst-ever post.

  6. Dan says:

    This may be your worst-ever post.

    I thought the hay-making on the Tahoe fire was worse, IMHO. But thank you for pointing out the pattern, much like the bulleted rhetoric from the other day, the ignoring of empirical findings, etc.

    DS

  7. msetty says:

    Dan, you certainly know by now that we can’t expect clear thinking from someone whose “philosophy” is partially based on a self-serving “intellectual tradition” originally financed by an aging rich jerk–-starting in the 1930’s as reaction against the success of Roosevelt––that brought over Europeans with dubious academic credentials and subsidized them with corporate money (See http://www.scoop.co.nz/stories/HL0812/S00378.htm), and the absurd ideas originating from a hack Hollywood screenwriter turned hack novelist who wrote movie dialog worse than anything from George Lucas in the second Star Wars trilogy–as if that were possible (I recently forced myself to sit through the film version of The Fountainhead, just to remind myself how awful it and the hack philosophy behind it was).

  8. Borealis says:

    The highest paid employees of most states are the university football and basketball coaches. I can see how competition and potential payoff drives those salaries up to astronomical levels. I am not sure why heads of government transit agencies would have a competitive market that would drive up salaries.

  9. bbream says:

    I think the argument can be made that competition isn’t enough in determining salary levels. Reading the Antiplanner’s comparison between compensation for highway officials and transit officials, he seems to imply that there is an inequality between the two on the basis of each agency’s utility: highways carry more passengers than transit, and so highway officials should be paid more than transit officials.

    By that logic, I think the fact that the highest paid employees are university athletics coaches is absurd. I understand that these coaches provide “utility” in the form of helping form teams that states and their residents can be proud of, but by that argument, transit officials provide “utility” in the form of running transit systems that states and their residents can be proud of. I think there should be a more tangible form of utility used to measure compensation, otherwise you end up with situations wherein bank CEOs get their bonuses regardless of how the banks actually perform.

    But to relate back to the original post, I have to agree with Adam. I don’t think it is appropriate to discuss this topic in the context of someone’s suicide, especially considering that there may have been numerous reasons that led to the man’s decision to kill himself. Defining him only as an example of political wrongdoing in the transit industry is very insensitive.

  10. bennett says:

    We often speculate and assume things to make arguments. Today we’ve crossed the line. That’s all I will say on todays disturbing topic.

  11. Borealis says:

    It has been five days since the suicide. Maybe there is more mystery here than I know, but how long should a blogger wait before discussing apparent public corruption?

    My bias is that I strongly think suicide is a cowardly act, and I don’t think a suicide deserves the respect of a heroic or accidental death. I can see letting the investigations determine the specific facts, but the public policy implications are general and not specific to the suicide.

    My sympathies go out to the family, but the pain is entirely the responsibility of the person who decided to commit suicide. There were many, many options for someone making over $200,000 a year. He left it to his family to sort out how much money he stole. That is not a heroic act deserving respect.

    The dead deserve some respect, but how long does their decision to deeply hurt their loved ones deserve immunity from criticism?

  12. Scott says:

    Hey posters,
    Adam, you typed “worst”. Not enough info for me to defend or explain.
    I’m tired of these guessing games, when there’s so much generalizing.
    I would have to kind of agree (I didn’t touch on much), but not enough on specifics.

    Dan, WTF?: Tahoe, bullet points, ignoring facts? Don’t recall. Me? You could be confused, again. It’s strange for you to pretend to specific (quasi), when you do not respond to many responses that counter you.

    betty, Huge fallacies & meaningless ___ you used: “aging knee-jerk, Europeans, credentials, ___ ____ (5+ more). What is your point? I wasted your previous points, in the past.

    Yeah, you don’t accept it (facts, reasons, logic, etc.) as that, because most “brain damage” people are big gov, or vica versa. Don’t take that as an “argument” but as a rib.

    Regarding the suicide, I made light, & could have been seen as heartless.
    Hey, I like to be sarcastic & have 43% of a heart.
    However, O’toole’s point was not the guy giving up, because he was found out for indiscretions. Randal could have easily made his point, without the death.
    The point is, high public salaries & some officials “skimming” & the worth of public transit.

    Yes “skimming” & such happens in the private sector, but the heads are usually much more accountable, in order for customers to voluntarily buy their product or service, and to cover costs.
    I was kind of glad that an Enron (fraud company, similar to Feds) executive killed himself.
    Madoff, should be drowned.

    Big Gov has good intentions, which trumps cost & negatives?
    Right, sure.

    Borealis, Good point on coaches, maybe ($ source?). I’ve wondered about those very high salaries.
    I’m hoping that they get paid from tickets sales. However, many public funds go to collegiate sports. Could be similar to how many cities subsidize pro-sports teams.

  13. Borealis says:

    Coaches are largely paid from money off the books of the government. Nonetheless, here is 200 college football coaches making more than probably any Governor in the US. http://www.orlandosentinel.com/sports/orl-spt-coach-salary-chart-2009,0,3767955.htmlstory. That doesn’t even count basketball coaches, where the real money is at for colleges (football being much more expensive and far fewer games).

  14. Scott says:

    So much value in spectator sports. What a good deal.
    And I didn’t attend any games at the Universities that I went to. What a shame.

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