THE media treated it as good news when the Metropolitan Transportation Authority and Local 100 of the Transport Workers Union said last week that they’d settle their next contract through binding arbitration.

True, arbitration means the Jan. 16 expiration of the current Local 100 contract will bring no repeat of the December 2005 transit strike—but it also means the MTA has blown its only real chance to reduce projected operating costs and free some existing resources for vital infrastructure improvements over the next few years.

The MTA faces the worst fiscal crisis of its 41-year history—and 60 percent of its budget is essentially dictated by labor contracts, which can be renegotiated only once every few years. Yet MTA board members and Gov. Paterson chose now, of all years, to abdicate one of their key responsibilities by punting the next deal to a panel of unaccountable labor arbitrators.

It wasn’t as if transit workers were itching to stage another walkout. Local 100 and its members were heavily (and appropriately) penalized for their last strike. Union chief Roger Toussaint was crying poverty when a judge agreed last November to reinstitute automatic dues collection—but only after the MTA had signaled its support, and after Toussaint had submitted an affidavit saying that the union had no intention to strike again “now or in the future.”

It’s hard to tell if the MTA tried to use its new leverage over the union to good effect, because officials wouldn’t disclose anything useful about the latest, truncated round of contract talks.

“We’ve had very intense negotiations with TWU, with Roger Toussaint, and I’m very hopeful [for] a satisfactory outcome,” MTA chief Elliot Sander said in a NY1 interview Dec. 31. Yet documents show that both sides had already declared an impasse on Dec. 23.

“The principal differences between the parties include contract duration, economic terms and other terms and conditions of employment,” the MTA’s labor-relations director wrote in early January to the Public Employment Relations Board, the labor-friendly state agency which will oversee the arbitration process.

So how do MTA and the TWU differ on “contract duration”? What did the MTA want from the union, and vice versa?

Important questions, but the answers have yet to be shared with taxpayers or straphangers.

This much is clear: Given the complexity of the transit system, and given the union’s many job titles and work rules, the MTA has even more to gain than most New York government agencies from adopting a creative approach to contract negotiations.

State labor arbitrators, though, aren’t known for creativity, but for status quo solutions. Paterson and the board thus squandered the chance to see if Sander could use more flexible work rules to improve service for less money.

As if that weren’t bad enough, arbitration means the MTA is now risking even bigger budget shortfalls over the next few years.

The authority’s latest financial plan assumed that union wages would rise at just half the Consumer Price Index rate this year, and follow the inflation rate after that. But arbitrators could choose a much more generous pattern—such as the 4 percent annual pay hikes that Mayor Bloomberg gave several city unions this year as the economic crisis unfolded, with no productivity givebacks in return.

Meanwhile, arbitration gives the TWU three more years of breathing room to recover from the strike, with backing from Albany allies like former City Councilman and newly-minted state Sen. Joseph Addabbo (D-Queens)—who was endorsed by Local 100 and has supported the TWU’s “Taylor Law reform” agenda.

Not that the union didn’t already have friends in key places: The governor’s father, labor lawyer Basil Paterson, was Local 100’s negotiator in 2005, and political consultant Bill Lynch has advised both Toussaint and David Paterson.

For sheer short-sightedness, the decision by the Paterson-controlled MTA to seek binding arbitration of the next Local 100 contract may end up rivaling the Pataki-era MTA’s decision to saddle the authority with huge levels of added debt.

Another three or more years of compounding the transit system’s unsustainable labor costs—plus allowing TWU to rebuild its strike fund—will drain even more resources from the system’s already limited capacity for investing in its infrastructure.

The MTA this week will beg Albany for more than $1 billion a year in new taxes and tolls to close its huge budget gaps and provide a stable source of new funding for the transit system’s operating and capital needs. But, in the wake of last week’s arbitration announcement, it appears too much of any new money will be flowing into the same old bottomless pit.

About the Author

Tim Hoefer

Tim Hoefer is president & CEO of the Empire Center for Public Policy.

Read more by Tim Hoefer

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