The last few weeks had been going, well, mostly smoothly for the MTA. At the end of July, the agency announced that its preliminary 2010 budget would contain no fare hikes, and on Monday, the authority released a preliminary five-year capital program for 2010-2014. Expansion and sound economics were the key phrases.
All of that planning and good will were dealt a fiscal blow yesterday when an arbitration panel granted transit union workers a series of raises and benefits that will leave the cash-starved agency searching for even more money. After a lengthy arbitration process, the panel granted transit workers, according to NY1’s Bobby Cuza, “four percent raises in each of the first two years of their contract [and] three percent in the third year.” This victory for the union far exceeded the amount allocated by the MTA in its preliminary budget proposals.
MTA officials were livid. Helena Williams, the current interim executive director and MTA CEO, issued a tersely-worded statement about the ruling. She said:
“This award is extremely disappointing and fails to recognize the economic recession in the region and the impact of this downturn on the MTA. There will be a significant impact on the MTA’s bottom line. The award suggests that the MTA raid its underfunded capital program and rely on one-shot federal stimulus funds to pay for raises. As a further disappointment, the award also rolls back a portion of the employee health care contribution that the MTA won following the 2005 TWU strike. Over the three years of the contract, the award will cost the MTA approximately $350 million more than budgeted: $10 million in 2009, $100 million in 2010 and $240 million in 2011.”
For now, according to Williams, the MTA Board will not recommend raising the fares again this year, but those promises of a 2010 without a fare hike are off the table.
Following the arbitration ruling, Mayor Bloomberg and TWU President Roger Toussaint continued their war of words. Earlier this week, Bloomberg warned that riders would suffer if the union workers received a generous package from the arbitrator. “The straphangers of today are going to pay for this increase if, in fact, the arbitration comes out that way,” he said. “I don’t see how the arbitrators can rule that way if they have to look at the ability to pay, because the straphangers don’t have the ability to pay more.”
Toussaint later pointed out that numerous city unions had received similar four percent raises and issued a statement heavy on the rhetoric. “The last time,” he said, “we saw a Mayor champion such unfair, unequal treatment of a specific group of workers was Memphis, Tennessee, and the year was 1968.” This, of course, was the sanitation workers strike that ended only after Martin Luther King, Jr. was assassinated. That’s some comparison.
Bloomberg’s response was far more level-headed. “The city’s finances are different than the MTA’s finances,” the mayor said. “The city’s workforce is different. So there’s no reason to think that if one does something, the others automatically have to get it.”
And so here we are. The MTA has to find $10 billion to cover a gap in its capital budget. It has to find a way to keep fares low and keep the trains moving. And now it has to find a way to cover an additional $350 million in labor expenses. No wonder New Yorkers are so skeptical of the city’s transit unions.