Barely three months after the state Legislature approved a $2.3 billion package of tax and fee hikes to bail out the financially troubled Metropolitan Transportation Authority (MTA), members of the MTA’s largest union have been awarded a pay increase that will break the authority’s tenuously balanced budget.

Almost unbelievably–in the midst of the New York’s worst economic downturn since the Great Depression, not to mention the MTA’s own severe fiscal crisis–transit workers belonging to Local 100 of the Transport Workers Union will receive an 11.3 percent pay increase over the next three years, under an award from a three-member state labor arbitration panel.   The arbitration panel also agreed to cap worker contributions to employee health insurance–rolling back part of a key union concession after the TWU’s illegal 2005 strike.

The big pay hike and health insurance giveback was favored by two of the three arbitrators–union appointee Roger Toussaint, who also happens to be Local 100’s president, and “public” appointee John Zuccotti, a real estate lawyer who is a former deputy mayor.  The only dissenter came from management appointee Dall Forsythe, a New York University professor and former state budget director, who called the award’s inflation-adjusted pay increases “unprecedented.”

“When consumer prices are actually declining, wage settlements at the levels proposed by the majority would produce unprecedented inflation-adjusted wage increases for the TWU membership … I believe that the wage increases required by this Award are simply too high in this environment of economic decline and flat or falling consumer prices,” Forsythe wrote.

E.J. McMahon, director of the Empire Center, and Nicole Gelinas, senior fellow at the Manhattan Institute, have written extensively about the MTA’s budget travails–and about the TWU deal in particular.    In reverse chronological order, here are selections of our blog posts and articles on this developing issue:

The tale of one-person train operation
NYFiscalWatch by Nicole Gelinas, Aug. 14, 2009
As the state-run Metropolitan Transportation Authority launched negotiations with the Transport Workers Union last year for a new three-year labor agreement, one of the authority’s biggest goals was to win the right to run “one-person trains” — that is, trains with an engineer rather than an engineer and a conductor — on two lines, the L and the #7 trains. Yet as negotiations turned to arbitration and as arbitration neared its end, the MTA unilaterally yanked its request for Opto, seemingly snatching defeat from the jaws of victory.

Where’s “Mayor Linsley” when you need him?
NYFiscalWatch by E.J. McMahon, Aug. 13, 2009
Adjusting for inflation, the 11.3 percent pay hike awarded by an arbitration panel to Local 100 of the Transport Workers’ Union (TWU) this week appears to be the transit workers’ biggest score since the disastrously generous contract settlement that ended their 1966 strike.  Indeed, by some measures, this year’s increase will be even larger.

Stimulating a union giveaway
NYFiscalWatch by Nicole Gelinas, Aug. 12, 2009
The arbitrators who awarded transit workers an outrageous new contract want New York’s economy to suffer without adequate new investment and improvements to an outdated, aging transit system, so that well-paid union members can receive compensation packages that would be generous to a fault in the private sector. And they want New Yorkers to pay higher taxes – such as the new $1.5 billion payroll tax included in the recent bailout — for this purpose.

Trainwreck of a Contract
New York Post op-ed by Nicole Gelinas, Aug. 12, 2009
The MTA just managed to give away the store in the new Transport Workers Union contract — and they couldn’t have done it without Albany and City Hall.

MTA’s Fatal Dodge
New York Post op-ed by E.J. McMahon and Nicole Gelinas, Jan. 12, 2009
The media treated it as good news when the Metropoli tan Transportation Au thority 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.

A Just Plain Terrible Tax Proposal
New York Post op-ed by E.J. McMahon, Dec. 5, 2008
Say this much for the “mobility tax”: Unable or unwilling to find more cash in operational savings, capital cuts, or the farebox, the Ravitch Commission apparently tried to find the least-awful way to raise another $1.5 billion for the MTA. But the tax is still a bad idea.

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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