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Real Cause of MTA’s Woe

To the Editor:

The continuing decline of the American economy, highlighted by ever-increasing unemployment rates, has provided corporate America a unique and irresistible opportunity to attack and scapegoat organized labor.

As the number of private-sector jobs has steadily dissipated, publicsector employees have come under increased scrutiny, particularly in the area of wages. The recent contract signed between the MTA and TWU Local 100 is a case in point.

The contract, which gives transit workers an 11.5-percent raise over three years, has been met by a shrill chorus of outrage among the enemies of organized labor. The outpouring of journalistic hysteria criticizing it has been virtually non-stop since it was announced.

It has been described as “A Trainwreck” and a “giveaway” in the New York Post. Peter Kalikow, former Chairman of the MTA, has called it “a sweetheart, behind the scenes deal” and “sneaky.” The Daily News described it as “the great train robbery.”

It has been demonized to the point where fantastically paranoid and Byzantine conspiracy theories are formulated to explain it.

The common thread that binds these criticisms together is the idea that labor costs are the reason the MTA’s budget is spinning out of control and that cutting them will be the MTA’s salvation.

Writing in the Post on July 8, Nicole Gelinas stated, “The biggest threat to decent mass transit is the state-run agency’s labor costs.” She added, “The agency’s debt is also scandalous—with payments up by nearly half in five years, to $1.5 billion, and set to swell to $2.3 billion over the next three years. But politicians hiked the debt mainly to avoid confronting labor costs.”

The idea that labor costs have swelled the MTA’s debt load to its current levels is absurd. Don’t believe it.

John Petro of the Drum Major Institute, a liberal public policy thinktank, wrote, “The MTA’s current budget crisis is the result of a series of irresponsible political decisions that have prioritized low taxes over adequate investment in mass transit. For more than twenty years, the city and state abdicated responsibility to fund capital programs, forcing the MTA to borrow huge sums to maintain mass transit service. This borrowing has led to the acute crisis we are facing today; as huge debt payments eat up large portions of the Authority’s operating budget, the MTA is facing everlarger budget deficits.”

When Nicole Gelinas writes: “To keep investing in the infrastructure that makes the city’s economy move, the MTA can’t avoid addressing the bloated labor costs that are stalling it,” she shows a compete ignorance of the history of MTA finances, or conveniently chooses to ignore it. The real reason for the MTA’s fiscal woes is 20 years of underfunding of capital projects from the Federal, state and local governments.

From 1982-1986, New York State contributed 20 percent of the capital budget to the MTA. From 1987-1991 that figure dropped to 11 percent. In 1992, Gov. Mario Cuomo eliminated the contributions altogether. Every Governor since then has continued this short-sighted and destructive policy of ignorance.

The City of New York has also drastically reduced its contributions for MTA capital programs, from about 10 percent from 1982-1999 to its current level of about 3 percent.

Because it was financially neglected by every level of government, the MTA was forced to borrow massive amounts of money to cover capita expenditures— not labor costs. As the MTA struggles to pay its debts, 20 years of government mismanagement continues to haunt it.

An April 9, 2009 DMI press release stated: “These debt payments, not labor costs, are the root cause of the MTA’s budget deficits. Between 2003 and 2008, debt payments and non-labor expenses grew by 45 percent and 40 percent, respectively, whereas labor costs grew by 16 percent. Debt payments are expected to grow another 51 per cent by 2012—a financially unsustainable trend.”

The local press is clearly misleading the public into believing that organized labor is the reason for fare increases, service cutbacks, crumbling infrastructure, and poor on-time service. Don’t believe it.

What we need is less hand-wringing and finger pointing. Fewer op-ed pieces that distort or ignore the facts altogether. Less scapegoating of transit workers who are being blamed for 20 years of government fiscal neglect, and expected to pay for it by giving up their legally achieved gains.

Instead of questioning the merits of an 11.5-percent raise over three years, the questions that should be asked are ignored.

Why has New York State been allowed to shirk its financial responsibility to the citizens of New York City by contributing absolutely nothing to MTA capital programs since 1992?

Why aren’t state contributions to the MTA rolled back to their pre-1992 levels?

Why does the Federal Government fund 90 percent of road and bridge capital programs but only 60 percent of the MTA’s capital programs?

These are tough questions, perhaps too difficult. It’s much easier to attack the easy target and let the real prey escape.

KEVIN MALONEY

Editor’s note: Mr. Maloney is a Track Equipment Maintainer in the Track Department of New York City Transit.