MTA chief Jay Walder is looking to hit up riders for more cash yet again, his new budget shows — while asking relatively little from his union workforce. In so doing, he’s bloating the fairness deficit.
The MTA hopes to extract another $915 million annually from transit riders and bridge motorists by 2014 — four and a half times the $203 million Walder wants by then from the unions.
By January, straphangers might have to pay $104 for a monthly MetroCard, up from $89 today. In 2013, the card could cost $122.
Walder’s kid-glove treatment of labor also comes at the expense of track and station improvements — and on the heels of deep service cuts that riders must now endure.
But the MTA has already socked riders and taxpayers to help with budget woes: Last year, the agency got a taxpayer-funded bailout of $1.6 billion, mostly via a new levy on downstate jobs, plus $500 million more from riders in higher fares and tolls.
True, Walder is trying to save on labor costs. At last week’s budget meeting, he asked unions to take two years’ worth of wage freezes. That proposal may sound dramatic — but it’s actually less than meets the eye.
First, unions can still get raises during these two years, if they find a way to “pay” for them with work-rule changes or benefits cuts. (Meanwhile, the MTA is in such dire straits that it needs both wage freezes and benefit changes — not one or the other.)
Second, Walder allowed that after two years unions could once again expect raises in line with inflation.
That means he’s already given away his best negotiating tool. What’s the unions’ incentive to cooperate, if the worst-case scenario is two years of wage freezes before it’s back to business? So the money that Walder expects to save from unions — $129 million in 2012, rising to $203 million by 2014 — may not even materialize.
Yes, Walder has gotten some impressive cost savings. At headquarters, he chopped 20 percent from nonunion payrolls; he cut 15 percent from administrative payrolls elsewhere, too. These 977 cuts, plus frozen nonunion wages, save $100 million annually. He’s also cutting 2,500 jobs in the blue-collar workforce and eking out efficiencies to save another $200 million.
But even then, he’s taken $300 million from workers versus $2.1 billion from riders and taxpayers. Plus, riders are suffering another $100 million in service cuts, including more unmanned entrances and longer waits for trains.
And the fairness deficit will only widen over the next four years.
Because the MTA remains intimidated by its workers, New Yorkers are seeing their income and savings eroded by fare hikes that are rising far faster than inflation. Since the last hike, in June 2009, the price of goods and services is up just 1 percent in the city. Even if inflation increases soon, the January fare hike could still be 10 times the inflation rate. (While the official fare-hike figure is 7.5 percent, the MTA raises some fares more than others. It also makes up for lost riders who decide to walk, bike or row to work.)
The MTA’s fare hikes used to lag inflation, but labor costs have rendered that moot. The equivalent of the nickel fare a century ago would be just $1.10 today. The 15-cent fare in 1953 would be $1.23 today. The current fare for a rider who takes 55 trips on a monthly pass is already $1.62.
What’s more, even as rising fares erode New Yorkers’ income and savings, labor costs are eroding investment in aging transit assets — so riders have to worry whether they’ll have any subway system left to ride.
By the time the MTA starts handing out inflation-linked raises to its unions again, the authority will have just started to repay the $500 million loan that it borrowed from its own capital-investment funds to paper over deficits during the last two years.
Why is Walder kowtowing to labor? He wants to keep his job.
Walder knows that pols like Assemblyman Richard Brodsky, who’s among the legislators who control the MTA’s purse strings, will defend the union at all costs.
When it comes to asking labor to sacrifice, Walder could do better — but he needs political pressure.
Riders should keep their eyes not on the MTA but on gubernatorial front-runner Andrew Cuomo and his competitors — to see what they think of the riding public suffering nearly five times more pain than the unions.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.