A court decision upholding a three-year, 11.5 percent pay raise for New York City transit workers should make local governments elsewhere nervous.

State Supreme Court Justice O. Peter Sherwood has upheld an arbitration panel award to the Transport Workers Union in August (here and here). The Metropolitan Transportation Authority had appealed the award, arguing it did not consider the “interest and welfare of the public.” The MTA said ruling would add $300 million to labor costs through 2011.

The latest court ruling, released Friday, comes at the MTA is already facing a “sudden financial shortfall of more than $400 million,” forcing it to unveil “a newly austere budget,” the Times reports. Among the expected recommendations:

Fewer subway trains will run in the middle of the day, late at night and on weekends. Two lines will stop running altogether. And New York City’s students may soon be expected to pay a full fare to ride on the city’s public transit system.

Reacting to Justice Sherwood’s decision, the MTA said in a statement:

“We are extremely disappointed by this decision, which will force the M.T.A. to pay wage increases that are inconsistent with the economic crisis in New York.”

The judge, however, alluded to the 4 percent raises granted New York City employees for 2009 and 2010.

“In the current economic environment, the award of wage and benefit increases over three years of approximately 11.5 percent is a rich package but not unique,” Justice Sherwood wrote in his decision. He also said that “the court may not second-guess the decision of the arbitration panel.” “The court has limited authority in this case,” he added.

The city’s two-year, 8 percent raises do not justify the three-year, 11.5 percent raise for TWU workers, a spokesman for New York City Mayor Michael Bloomberg told the Daily News.

“Arbitration is based on ability to pay, and MTA resources are not the same as city resources. The revenue shortfall and new state cuts only make the MTA’s inability to afford this more apparent,” said spokesman Marc LaVorgna.

The MTA is a public authority created by the state Legislature. Its board has 17 voting members, who can cast a total of 14 votes. Only four voting members are Bloomberg appointees.

Originally Published: NY Public Payroll Watch

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