Over at NY Public Payroll Watch, E.J. McMahon criticizes Gov. Paterson and others for allowing the state-run Metropolitan Transportation Authority to abdicate one of its main responsibilities — negotiating a better contract with the New York City local Transport Workers Union of subway and bus workers — to an even more unaccountable panel of state arbitrators. In addition to McMahon’s detailed analysis, there’s yet another reason why the MTA’s “punt” is so dispiriting. It makes it that much harder for the MTA to fund its all-important capital plan.

Despite having the upper hand over a severely weakened union after a pitiful strike three years ago, and despite a fiscal and economic situation that puts the word crisis to shame, “the MTA has chosen this year, of all years, to punt the whole deal to an unaccountable panel of labor arbitrators,” McMahon notes.

Even in the context of a listless state and city government approach to unsustainable spending problems, the MTA’s abandonment of a key responsiblity is acutely disappointing. “Given the complexity of the transit system,” McMahon continues, “… the MTA has more to gain than most public-sector agencies from taking a creative approach to its contract demands.”

That is, it’s not just that the MTA has to do the boring work of figuring out quantitative savings from pensions and benefits concessions, as all levels of New York government must do.

It also needs to make huge progress on things like getting the right to do some competitive contracting on outer-borough express bus service, getting track workers to work one weekend day a week in return for a weekday off so that they can do more work when fewer people are riding the rails, consolidating its bus operations into one entity, and the like.

Now, Gov. Paterson and the MTA’s board have squandered the opportunity to make even incremental changes on these qualitative measures — in which customers could have seen real improvements for less money — for at least another three years.

While this is a sin of not doing something rather than of doing something, it ranks right up there with the MTA’s most recent infamous sin of commission: taking on billions of dollars in unsustainable debt that irreparably harmed its budget.

Why? Continuing unsustainable labor contracts and actually building on them for another three years while the union regains its strength does similar damage.

This wasted opportunity cuts especially deeply. First, because the MTA’s new (or now semi-new) management seems to possess the minimal competence needed to execute real changes decently. But nobody knows who will be in charge — of state government or the MTA — in three years’ time, when the next contract will be up. (In fact, sometimes it is hard to tell now who is ultimately responsible for the MTA’s decisions.)

And second, because the MTA and outside advocates like former chairman Dick Ravitch have been pushing for a new source of money — through bridge tolls or a payroll tax — so that the MTA can fund its capital construction plan.

But with the labor contract now going to arbitration just as Albany is set to approve or disapprove a new source of funding, there is no way to know if an extra $600 million from new bridge tolls, for example, would just go toward a poorly arbitrated union contract that continues the unsustainable status-quo on the labor side, instead of desperately needed capital improvements.