And You Wonder Why Fares Keep Going Up

BD_mbta.jpgLike the weather, Bostonians live to hate the T. The trains are dirty and occasionally violent. The bus drivers are foul-mouthed sociopaths who appear to get their kicks from inexplicably blowing past a half dozen people standing at a bus stop in the rain. Fares keep rising, without a commensurate improvement in customer service. Minority neighborhoods routinely get the shaft. Save for some high-profile, badly needed renovations at a few stations like Charles/MGH and Forest Hills, it’s a mess.

The T claims that the reason for its lowly state is twofold:

1. After years of backward financing, in which the T spent what it needed to spend, and the state reimbursed it (and service was at its peak), legislators shifted the funding formula around, forcing the T to set a budget, and then tying the Authority’s funding to sales tax revenues. These revenues promptly stagnated, putting the T in a fiscal pinch.

2. Back in the 90s, the state mandated that the T expand hugely to mitigate the environmental horrors expected to come from the construction of the Big Dig, but not only failed to fund the expansion the T was now obligated to undertake, but later dumped $3 billion worth of state debt onto the T. As a result, the T’s debt—the biggest in the nation—skyrocketed, the Authority was forced to delay lots of badly needed maintenance, and, worse, little of the expansion plans were actually realized. Right now the T spends a whopping 30 percent of its annual budget on debt service alone. Hence all those pesky fare increases.

Two legislators have filed bills that call for the state to give the T $3 billion to offset its debt and try to correct this problem (also note former governor/present straphanger Mike Dukakis’ sage ideas here). But as today’s Globe points out, there’s a deeper problem ailing the T—the insane-o pension situation. And fixing that would involve taking on a union, the mere thought of which is enough to chill Mass. politicians’ blood in their veins.

The T’s pension plan, which not only allows people to retire after 23(!) years on the job, but, well, here’s the rundown. Brace yourself.

MBTA retirees are allowed to boost their pension still further by taking advantage of another unusual provision of the plan. Unlike state employees, retiring MBTA employees are allowed to convert their accrued sick days, which they can carry over from year to year indefinitely, into pension credit. Retirement fund officials declined to reveal the formula used to convert sick days into years of service or to say whether this was a perk that Mulhern, Rooney, or Barry had used.

The T plan is generous in other ways. Employees must contribute 4 percent of their salary to the retirement fund, according to MBTA spokesman Joe Pesaturo, while most state workers must pay 9 percent on the first $30,000 of their salary and 11 percent on the remainder.

There are also no restrictions on the amount of money MBTA retirees can earn if they return to work in the public sector. State workers are severely limited: They can earn no more, salary and pension combined, than the current salary of the job they retired from. Regardless of their new salary, they are allowed to work only 960 hours a year.

MBTA retirees also receive free health insurance for life, regardless of when they retire, while state retirees continue to contribute toward the cost of their medical insurance, either 15 or 20 percent, depending on when they retired.

And all that after working 23 years on the job. Retirement at 45. It’s jaw-dropping just how badly the T has given away the store to its unions. The Pioneer Institute, which has been clamoring for change for years, estimates that the T is the most expensive transit system in the U.S. to run, with the vast majority of money going toward astronomical labor costs, among the highest in the country for nearly every position.

It’s ugly, but devoted T haters are wise to reserve some of their venom for the union enablers in the legislature. Here’s an excerpt from a Pioneer publication showing just how badly the T’s hands are tied when it comes to cutting labor costs.

In 1980, management rights legislation was enacted that preserved the T’s right to subcontract, prohibited the T from bargaining away the right to hire part-time employees, and increased management authority over employee assignments. Today, the right to hire part-timers is all that remains. Passage of the Pacheco anti-privatization law in 1993 essentially eliminated the right to subcontract. Any faint hope that remained was extinguished by language in the 1998 contract between the T and its biggest union—a contract that also provided raises of more than 20 percent over five years.

A 1995 amendment to the management rights legislation took way much of the MBTA’s control over employee assignments. Today, outdated work rules result in the T having more employees than it needs and incurring unnecessary overtime costs. Overall, they increase labor costs by
10 to 20 percent.

So essentially, the legislature passed laws that made it extremely difficult for the T to control its labor costs, then dumped billions in debt onto it, compelled it to undertake a massively expensive expansion, and tied its operating budget to a sales tax fairytale that never came to be. Naturally, once again, the commuters are left holding the bag, with fares more than doubling since 2000.

So, when you perform your daily hate on the T today, just bear in mind that it wasn’t just the Authority that screwed you, but the entirety of the Massachusetts political culture.

Thank you for riding.