MTA’s Opening Budget Blast: Propose 700 Layoffs, Slam Unions

LABOR PAIN: Metropolitan Transportation Authority Chairman and CEO Jay Walder vowed to fix an ‘imbalance’ between Transport Workers Union Local 100 members receiving 11-percent raises over three years while non-union workers were forced to accept a 10-percent pay cut. He blamed labor costs for the agency’s long-term budget problems. The Chief-Leader/Michel Friang The layoff of 700 New York City Transit workers, mostly Bus Operators and Station Agents, is among the more-brutal elements of the budget the Metropolitan Transportation Authority passed Dec. 16 that would institute sweeping subway and bus cuts and reduce the salaries of non-union employees by 10 percent.

But in outlining plans to bring the ailing agency back into financial stability, MTA Chairman and CEO Jay Walder also indicted the nearly 70 unions representing MTA workers, saying that they should be prepared to accept more layoffs, the end of “archaic work rules” and a reduction of overtime work.

THE RIDERS’ RESPONSE: Straphanger’s Campaign attorney Gene Russianoff blasted the MTA’s plan to reduce service and charge students for MetroCards at last week’s board hearing. He endorsed an alternative budget plan devised by City Council Members that would move 10 percent of Federal stimulus funds earmarked for the agency into its operational budget. The Chief-Leader/Michel Friang ‘Must Take the Place Apart’

In his statement to the board before the vote on the budget, he lamented that in addition to the fact that neither the city nor state would increase subsidies, the MTA suffered from bloated labor costs, citing specifically 5,000 administrative workers and $500 million spent annually in overtime costs.

“In short, we need to take the place apart,” he said.

Mr. Walder took a further swipe at the recent contract arbitration award for Transport Workers Union Local 100, which the MTA unsuccessfully challenged in court, noting that it grants 11-percent raises for its members at NYC Transit while non-union workers at the agency are suffering a salary cut and riders will experience service reductions if the plan is implemented next year.

“That’s an unacceptable imbalance,” Mr. Walder said.

Joining in the onslaught were board members Nancy Shevell, a transportation industry executive best known as the girlfriend of Paul Mc- Cartney, and Andrew Saul, who blamed Mayor Bloomberg for negotiating contracts with city unions setting a pattern of 4-percent annual raises, which was the rationale that arbitration panel chair John E. Zuccotti cited when he decided the Local 100 wage terms.

“We have seen our unionized labor costs escalate over the last five years, compounding to an increase of approximately 36 percent,” Mr. Saul said. “What business could stay solvent with these runaway costs?”

Ms. Shevell, citing a comment during the public speaking section of the meeting asking where all the fare revenue was going, said, “So much of it is going to our union members, and the unrealistic work rules, and the unrealistic increase they have received.”

She added, “It is really unfair that one large group is not being affected by the economic downturn, and another large group—for example, our youth and our disabled and our working people— are having to pay the price.”

Norman Brown, the legislative director of the New York State Council of Machinists and the only labor-affiliated MTA board member—though a non-voting one—present at last week’s meeting, said of Mr. Walder’s assessment that labor costs were eating up too much of the MTA budget, “It’s incorrect, or, it’s your viewpoint.”

Archaic to Whom?

On the issue of overtime, he argued that management had no right to complain because in many MTA agencies overtime hours are mandatory. He suggested that if the MTA wanted to reduce overtime hours, it would prohibit their assignment, which he added, with some sarcasm, would please the unions because the agency would be forced to hire more people.

“You can characterize them as archaic all you want,” Mr. Brown said of collectively-bargained and arbitrated work rules. “I recognize that as an accountant, they must look archaic. Well, funny thing, I think accountants have some pretty archaic work rules, too. And everybody thinks somebody else has archaic work rules.”

He added that, “A lot of these work rules that are now archaic are things that management wanted years ago.”

Maurice Jenkins, who will assume the vice presidency of Local 100’s Stations Division Jan. 1 and was present at last week’s meeting, said he was not surprised by Mr. Walder’s shot at the unions, noting that while an executive at Transport of London he was “never a fan of labor.”

Mr. Jenkins said that the MTA’s budget deficit was the product of its own grandiosity. In particular, he claimed that the MTA wasted money on capital projects that it couldn’t afford, such as the redevelopment of the Fulton St. subway station in lower Manhattan.

Wrong Time to ‘Beautify’

“Most of the capital improvements are actually not capital improvements, they’re beautification,” he said. “At a time when there’s not a lot of money coming in, you want to make sure that whatever you work on is basically developing the infrastructure of the system. And then when you have an abundance, you do the beautification.”

He also said that the MTA wasted billions of dollars on the development of the Second Ave. subway line, when cheaper transportation operations could have been developed. (Some transit advocates have argued for a light-rail system or putting more bus- es on Second Ave. rather than installing an underground line.)

“Basically, what they’re doing is they’re making mistakes and they’re putting the burden of those mistakes on labor,” Mr. Jenkins said.

With the power transition at Local 100 now under way, Mr. Jenkins, asked how the union would react to Mr. Walder’s efforts to downsize the workforce, responded, “We’re in the planning phases of that.”

‘Children’s Tax’ Stirs Anger

The service cuts in the budget package are similar to those proposed last year, although without the whopping fare hikes. But this time there’s an extra piece causing significant outrage: the elimination of free MetroCards for public-school children, a move some riders equated to taxing students. For example: A parent of two publicschool children, if using monthly MetroCards, would pay $1,780 for 10 months of school. The ramifications, advocates argued, would be more children evading fares and fewer children actually getting to school, hurting the education system.

“The enrollment for school is going to go down; they’re not going to be able to get to school,” said Correction Officers Benevolent Association President Norman Seabrook, one of the labor designated members of the MTA board. “They’re going to have to travel through the snow, through the rain, so the kid is going to say, ‘You know what? I’m just going to stay home.’ ’’

Many political observers believed that the elimination of free Metro- Cards for schoolchildren was a ploy to convince the city and state to increase funding to the agency; Straphangers Campaign attorney Gene Russianoff called it a “political hot potato for Governor Paterson.”

Council Members’ Alternative

Several City Council Members presented an alternative plan to the board that would steer more than $100 million in Federal stimulus grants to the MTA’s operational expenses. The MTA received $915 million in stimulus funding, 10 percent of which can be used for operational expenses, and they called for keeping $50 million intended to be shifted from the operational budget to the capital budget to meet day-to-day spending needs.

Council Speaker Christine C, Quinn noted that it was often unwise to use capital funding dollars for operational expenses, but said that the cuts were so drastic in this instance that the move was justified. She added that the Council’s alternative plan would allow the MTA to balance the budget without enacting cuts.

“If you look at how huge the deficit is in the MTA capital budget, the amount of money we’re talking about is quite frankly a rounding error,” she said.

Unlike earlier this year, there has been no attempt by the State Legislature to enact a new funding stream for the agency; the state is teetering on the brink of insolvency and Governor Paterson announced that it will cease payments in some cases.

Bridge Tolls Resurface

When Elliot Sander, then the CEO of the MTA, unveiled his doomsday budget plan at this time last year, the Governor and transit advocates pushed a broad array of funding streams that would have given the agency a financial life-line. One key component, the establishment of new tolls on East and Harlem River bridges and tunnels, didn’t make it into the final bailout package. (Mayor Bloomberg proposed that it be reconsidered just prior to last week’s vote.) The State Legislature agreed on a bill imposing a payroll tax on employers within a 12-county region served by the MTA, a 50-cent surcharge on cab rides, and a roughly 10-percent increase in transit fares. For bus and subway riders, the fare increased to $2.25, rather than the $2.50 the MTA previously voted to adopt, and the cost of monthly MetroCards rose from $81 to $89.

Mr. Seabrook, who was not at last week’s board meeting, offered a chilling assessment of his colleagues in an interview the day before the vote, saying that they operated with little to no accountability and were “out of touch, out of mind.” The majority of board members, he said, are people who are not affected by the service cuts, adding that the only solution was to have the Governor or Mayor take over the agency in the same way the state established mayoral control of city schools.

“We can no longer allow the people of this great city to suffer at the hands of people just sitting down giving a nod,” Mr. Seabrook said. “This authority is not working. Every three months we’re back here talking about increases. Every three months we’re back here talking about let’s cut this, or let’s cut that. It doesn’t seem like anyone is in charge.”

Wanted Alcohol/Tobacco Tax

He blasted the MTA leadership for not seriously considering his recommendations to generate revenue earlier this year, including a 20-percent tax on alcohol and tobacco products that would go towards the MTA’s operational expenses and the renting out of more space at large stations to advertisers such as Disney. (It should be noted that in the case of Mr. Seabrook’s “sin tax” proposal, such a measure would have to be enacted by the State Legislature.)

Mr. Walder said that while many people have protested that the MTA budget was passed with little time for public comment, last week’s action would mark the beginning of an official public comment period and that there was still time for the state and city to provide revenue streams that could avert the cuts.

“This is the start of a process,” he said. “Not the end of a process.”