As the MTA looks to seal an unexpected $343 million gap in its budget, we know that last year’s Doomsday cuts proposal is back on the table. Today, Sewell Chan of The Times reports that the MTA’s non-union employees will take a pay cut as part of the gap-closing measures. The authority’s 6000 non-workers workers will see their salaries slashed by 10 percent across the board. The agency says these pay cuts could last indefinitely and will either take the form of mandatory furloughs or an indefinite payroll lag.
For the MTA, this announcement comes at a time of labor unrest as its unionized workers fight for a four-percent raise. Although these pay cuts are a necessary component of any gap-closing proposal, it certainly helps the MTA’s arbitration appeal if the authority can point to problems covering payroll. TWU officials have already warned against any efforts to cut unionized workers’ salaries.
In the end, Chan also confirms that the service cuts but no fare hikes will remain on the table, and I have to question the wisdom of that decision. With these payroll cuts ā and perhaps some management trimming ā the MTA will still face a gap of $250 million. A fare hike of around 5 percent across the board will cover that, and for me, at least, that’s a more palatable solution than service cuts. Unfortunately, the MTA promised not to raise fares in 2010, and the state legislature appears more than willing to hold the authority to its word.
29 comments
This is an absurd situation. Everyone now knows:
1) that the best solution is a fare hike; and
2) that unlimited Metrocards are currently priced in such a way as to fail to cover costs by a significant margin.
Perhaps the political solution would be to restrict the “no fare hike” promise to the base fare.
Too bad the MTA did not come clean with this “shocking” news before election day. Bloomberg would have had some serious explaining to do. The Mayor claimed he needed a third term to guide us through these rough times. He grades out to an F so far.
This news is also very convenient regarding the raises awarded to the TWU. No chance of the workers seeing a penny of that raise.
It appears the old MTA, with 2 sets of books, is back in operation.
It appears the old MTA, with 2 sets of books, is back in operation.
Seriously, enough with this. There never were two sets of books. Two courts ruled as such, and the guy who charged the MTA with that claim wound up in jail. This isn’t rocket science.
Anyway, what even makes you allege two sets of books? Knee-jerk reaction based on what some irresponsible politicians have said? The MTA has been far more transparent with its finances this year than just about every other state agency. Just read through my archives here. The numbers are out there. Promulgating lies about the MTA isn’t what this site is about, and I have no patience for it or with anyone alleging it any longer. It doesn’t help realize goals of sensible transit investment and growth in New York City.
In the end, no one is denying that the state reneged on $143 million by cutting appropriations and no one is denying that the state didn’t deliver on the payroll tax by $200 million. How in your world does that lead to a charge of fiscal magic? The MTA got screwed by the state and by the people we elect to represent us. That’s the bottom line, plain and simple.
Too bad the MTA did not come clean with this āshockingā news before election day. Bloomberg would have had some serious explaining to do. The Mayor claimed he needed a third term to guide us through these rough times. He grades out to an F so far.
Furthermore, what does Bloomberg have to do with state solutions to a problem at a state agency? If anyone bears the blame for Bloomberg, it’s the voters who stupidly believed that a state agency could be solved through city action. The MTA is an organ of the state of New York, and not the City of New York, through and through.
And the TWU won its arbitration appeal last night. They’re get the raises, and we’ll be the ones paying for it.
āThis is a shocking development both because of the magnitude of the under-run (about 20%) and the late date of its discovery.”
This is either 2 sets of books or gross incompetence. No politician or MTA executive will take the blame for this. It is the taxpayers fault because we did not pay enough of the ridiculous mobility tax.
If this is Bloomberg’s plan to “reform mass transit”, he is doing a bad job of it.
That doesn’t answer the question or respond to my points at all. When the state delivered the check to the MTA, Dellaverson informed the MTA Board that the state did not deliver as much as possible. That’s the context of that line from his e-mail. I’ve read the whole thing.
I don’t know why you keep finger-pointing at Bloomberg for something over which he had no control nor do I understand why you believe the MTA has two sets of books. If you still believe a seven-year-old claim that was proven false, good luck to you.
It’s the state’s tax office’s fault for miscalculating how much of the mobility tax it would actually collect. No one who is well-versed in this issue is denying that.
You haven’t shown how Bloomberg is connected to the current under-run. It’s been established that the State Senate goofed. It’s easy to blame Bloomberg as a figurehead, but that doesn’t mean that he’s to blame.
Indeed, I’ve been arguing all along that the payroll tax was an insufficient and inequitable way to raise funds for the MTA, but if it contributed, then that would be a good thing.
As support to my sentiment on the payroll tax – http://www.observer.com/2009/p.....re-screwed
But notice who’s doing the talking – a state senator, not a city official or Bloomberg, because they were not involved in this funding scheme.
I am laughing my ass off at people like Ben that voted for that clown Bloomberg. He his entire campaign based on mass transit and now conveniently after election day ALOT of bad news comes out and he is not trying to do anything.
I understand that he isn’t in charge of the MTA like he tried to portray to the uninformed during campaign time but he can up the city’s contribution to an ACCEPTABLE level!!!
I am glad that the judge ruled in favor of the workers that actually move over 7 million people safely everyday on the arbitration award. The taylor law is based heavily on arbitration!!!
The number of people the MTA has to move has nothing to do with whether or not the agency can afford to pay the workers raises they may or may not meritoriously deserve. How do you propose the MTA find another $100 million to pay for the raises on top of the services they already have to cut? More service cuts? I bet that’ll go over well with the public:
“Sorry we have to cut your services even further; we have to give our workers 11 percent raises over the next three years at a time when NYC unemployment rates at recent highs.”
Sometimes, winning the battle doesn’t lead to a victory in the war.
Unions and regular wage increases have long been a fact of life in the NY Public sector. The mayor made his peace with that long ago.
But MTA executives think of that as an inconvenient impediment to their delusions of grandeur as big time players in the mega construction and mega real estate industries. Why do you suppose the MTA manages to occupy half a dozen or more office buildings, when they could fit the whole darn operation into existing unused space at the 2 Broadway facility alone?
The root of the MTA’s financial problem isn’t union wages, and it’s not duplication of office functions from one MTA agency to another either. The problem is MTA Capital Construction Corp itself, which has become the tail that wags the MTA dog. MTACC has bitten off more projects than it could ever hope to chew, perhaps in an attempt to make itself too big to fail. Mega billions being set aside for projects of dubious
value, and which, after all the delays have accumulated, may or may not ever serve a single revenue passenger in our lifetime.
So you propose to increase city contributions to the MTA, at a time when city tax revenue is down? That sounds like an increase in taxation in tandem with the inevitable fare hike and service cuts. If you live in NYC, which I hope you don’t considering your logic, that does not sounds like a good deal. It’s a good thing someone with the least sense of business acumen is the mayor.
While we’re on the topic, what were Thompson’s proposals for mass transit? What were Thompson’s proposals for anything, other than he’s not Bloomberg?
Additionally, on planet earth, or on a planet where rationality exists (not this city or state, apparently), you usually get a raise when you’re doing your job at a better level. What has TWU done to deserve this sizable increase in pay during tough economic times, when qualified people can’t get jobs?
The agency has to balance its budget somehow. Whether Bloomberg unearths more money from somewhere for a higher contribution or not, we will all pay more in the end through some combination of higher taxes, higher fares, service cuts, and one-time gimmicks.
As for the TWU, like all unions, pay is not based on performance. It’s based on seniority plus whatever they can extract out of a compliant political class.
I’ll save the shock for you – while schools are being closed and cuts are being made across the board – the city’s contribution to the MTA will not increase. As for the imbecilic way unions get increases in pay, now is clearly not the best time for a pay raise. Like you said, we will all pay more, in part thanks to this poorly timed pay-increase.
BK,
There was absolutely no chance that the court would overturn MTA/TWU’s binding arbitration. You had to look it from the court’s perspective—their calendar would be screwed. Binding arbitrations would be appealed like there was no tomorrow.
I was in disbelief that a student of law agreed that the MTA should and did pursue to void binding arbitration.
Maybe now you think it’s a good idea to cut non-union salaries?
Horses for courses I guess.
These are hard working people too. These are people whould have
made fiscal comitments based on what else—- their salaries.
6,000 people huh? Sounds like they could start their own union.
I hope (but doubt) that unions would show solidarity for their fellow workers and speak out against this next tragic action the MTA is about to take.
There was a good reason why 10% of stimu funds can be earmarked for operating expenses — this is one of them .
I assume most managers are non union? What kind of motivation will their staff have if managers are put in this position? Keen as mustard if you ask me.
it’s all Blinkered.
Bollocks !!!
As a student of law, I can tell you that the arbitration wasn’t upheld because it was binding. It was upheld because the MTA’s appeal didn’t meet New York’s jurisprudential standard for overturning an appeal.
Binding arbitration is the name of a process, and part of that process affords the losing party a chance to appeal the decision to a state court. Docket control wasn’t why the arbitration was struck down because binding arbitration cases are appealed with some regularity.
We live in a litigious society. Sure, everyone has their right to their day in court I s’pose.
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I have never heard of a binding arbitration decision being appealed in NYC. I’m sure it has happened but to say it happens with some regularity seems ridiculous. If you are interested in reading the judges decision it is posted on twubus.com a site run by a bus operator.
I have never heard of a binding arbitration decision being appealed in NYC. Iām sure it has happened but to say it happens with some regularity seems ridiculous.
What are you basing that statement on? Your limited knowledge of the TWU/MTA arbitration dispute or actual research into court precedent? Because I’m basing my statement on the latter. It’s a legal procedure. I promise I’m not making it up. In fact, for example, it happens AFT disputes all the time.
I have a copy of the decision already. I’ll have more on it later when I have a few more minutes to read it.
Maybe you can enlighten those of that don’t have your superior intelligence with some dates and proof that back up that BINDING arbitration decisions regarding NYC unions are appealed regulary. I am not saying I don’t believe you but with my “limited” knowledge it would help me understand the legal move.
Any chance you could post a link? I’ve done labor/employment law in California, I’d be mildly curious just to read for educational purposes, I’ve been hoping to waive into NY in a few years via another license ;p.
Check out this post for a link to the ruling and more.
[…] « Non-union employees to face 10 percent pay cut Dec […]
Ben I am still patiently waiting for your proof to enlighten us that BINDING arbitration rulings are REGULARLY appealed.
Read through the court’s decision posted in here and look at the cites in the second half. That’s established New York state jurisprudence for judicial scrutiny of arbitration appeals.
A Lexis search for the term “appeal AND arbitration award” turned up 2632 court cases on point. I’m not going to list all of them because it’s impractical. Arbitration appeals are rarely upheld because the appealing party has to be a very demanding test, but appeals are regular. It’s part of the arbitration process.
For more on that process, I recommend reading this FAQ at the National Arbitration Forum’s website. If you still don’t believe me, consult a labor lawyer.
A better indicator would be how many cases of binding arb appealed actually got the arb overturned.
JMHO
Few. A judicial order overturning arbitration is very rare, and there was no indication the MTA would win at the state court level. But that wasn’t the question Working Class had.
So it seems that appealing binding arb is more symbolic move than anything else.
I wonder how much money in attorney fees that symbolism cost?
They made an argument of unconscionability based upon the economic impact of the wage hike. They had an uphill battle, but it wasn’t symbolic. It would have been a big surprise if they won though and considering the cost savings had they won, the legal expenses are mostly justifiable.
6,000 employees at average salary of $60,000/year = 360 Million Dollars
10% of 360 Million is
36 Million Dollars
There is a law that includes a provision allowing up to ten percent of the amount apportioned in the Stimulus Money that the MTA received to be used for operating assistance (i.e Salary).
http://www.fta.dot.gov/news/news_events_10012.html
MTA could shift as much as $110 million in stimulus funds from capital construction and maintenance projects to the operating side of the ledger (i.e. salary).
http://www.nydailynews.com/new.....z0ZbsSlXV4
The MTA can use this money to prevent work furloughs but appears that it may choose not to!
In fact they don’t have to use all 10%
If 110 Million is 10%, 55 Million would be 5% and 36 Million would be about 3%.
Why isn’t the MTA using 3% of it’s Stimulus money to prevent work furlough?
Bullocks!