The conventional narrative of the Metropolitan Transportation Authority’s perpetual budget problems goes a little like this: Albany legislators, mired in self-interest and tied in the knots of party politics, fail to adequately fund the downstate transit system for millions of commuters. Further, unions, especially Transport Workers Union (TWU) Local 100, which represents nearly 34,000 New York City subway and bus workers, drain the operating budget with workers’ wages, pension and health benefits and cumbersome work rules.
The Metropolitan Transportation Authority’s (MTA) bosses pour this tale into the tabloids every now and again to explain why fares are rising, service is being cut and workers are expected to make contract concessions, but the truth is far different from that. To truly understand why TWU Local 100 and the MTA are locked in such a difficult bargaining situation and why the authority has a nearly $10 billion budget shortfall, riders and workers alike need to understand the intersection of the transportation authority and the financial sector.
Though the MTA is not a government agency in the traditional sense, its board of directors is mostly appointed by the governor and the New York City mayor. The MTA is a public authority that gives its governing body independent authority that state and city agencies often lack. There are worker and rider advocates on the board; though they are permitted to speak at the monthly board meetings, these members aren’t allowed to vote on budgets and other measures.
The MTA has two main budgets. The operational budget includes labor and the day-to-day costs of running the system, while the capital budget pays for construction, which includes station beautification and larger projects such as the Second Avenue subway and the Fulton Street transit hub. Money comes to the authority in a number of ways: fares, state taxes, federal funding and bond issues. The last item is where things get complicated.
The MTA issues tax-free bonds to financial institutions — among them, Goldman Sachs — which earn interest as tax-free income. The payments for the bonds come back to the MTA, but only for use in capital construction. In addition, money appropriated as part of Obama’s stimulus plan goes to the capital budget, and federal guidelines allow for up to 10 percent of that sum to move over to the operational budget. In the previous set of MTA budget cuts, rider advocates and union members urged the MTA to use 10 percent of its federal funds to alleviate the pain (as other urban transportation systems had done around the country), but then-MTA Chairman Jay Walder refused, citing that it was not a good practice to move money between the budgets.
At present, the MTA and TWU Local 100 are locked in tough contract negotiations, and management has set forth demands the union won’t accept: a wage freeze for the term of the new contract, a restructuring of overtime and differential pay, a giveback of five vacation days, a raise in employee contributions to healthcare benefits to 10 percent of pay and the institution of part-time work in bus operation. According to news outlets like the New York Post, the MTA says the union needs to give back because operational expenses are bringing the agency to the brink of insolvency, and surely nobody wants that.
No one denies the precariousness of the MTA’s budget situation. At issue is the cause of the crisis. A pamphlet from Occupy Wall Street’s (OWS) labor outreach committee claims that from 2000 to 2008, Goldman Sachs earned $28.8 million in MTA bond commissions and that in 2011, the MTA paid “over $2 billion out of its $12.7 billion budget in debt to banks and bond owners.” According to the pamphlet, the state comptroller’s office stated that “by 2018 MTA debt to banks and MTA bond owners may consume 23 percent of the MTA budget.” Government bonds, like MTA bonds, are popular items for financial institutions because they are stable investments to balance against risky private-sector financial instruments.
Essentially, the MTA is paying interest on investor money that is used to bankroll new construction. But these projects are costly, and as the Federal Transit Administration pointed out last year, the MTA’s East Side access project is $800 million behind schedule, and the Second Avenue subway project will open a year late, amNewYork reported. Union members have often told the MTA board that it would be cheaper to install light-rail or Bus Rapid Transit on the East Side of Manhattan, rather than the Second Avenue subway.
Thomas Angotti, a Hunter College professor in the Department of Urban Affairs and Planning, noted that for these projects, “from a long-term planning perspective, the only rationale is real estate development.” New subway development, Angotti said, has historically been promoted and funded by real estate interests that wanted developments to have train service.
In the modern era, the construction industry is a powerful lobby that naturally prefers expensive underground projects (which provide more lucrative transit construction contracts) to light-duty surface work.
“It’s the growth machine,” Angotti explained, “which includes construction unions, all the big construction firms that want to see growth in the city, as well as real estate.” While there is an alliance among transit unions and rider advocates that acts as a counter-weight, he noted that “they’re not powerful enough. They’re definitely in the minority.”
As a result, the construction and real estate interests — through their proximity to City Hall and the governor — push through a misguided transportation policy.
“Light rail is more rational and logical,” Angotti said. “Stop building new subway lines in places where they’re least needed. Improve the surface transportation system. So what does the MTA do? The first thing they do is cut buses.”
Occupy Wall Street has teamed up with TWU Local 100, one of the first major unions to come out in support of the Zuccotti Park occupation last September, to get the message out about the financial and real estate sectors’ role in the MTA’s budget problems. Jackie DiSalvo, a member of the OWS labor outreach committee, explained that OWS members are more vocal about directing anger at the banks.
“I don’t know if [TWU Local 100] wants to antagonize the banks,” she said. “Often times, OWS can do things the unions can’t.”
For OWS, solving the MTA’s budget problems is simple: “We’ve called to cancel the debt for the MTA,” DiSalvo said.
That’s likely to be unrealistic in the current political climate. But DiSalvo and the OWS labor outreach committee are raising important questions: Why is it when the MTA faces a budget crunch, the only people asked to make sacrifices are riders and transit workers, when so much of the authority’s debt is owed to banks to finance costly construction projects?
As far as reform goes, some politicians and transit advocates have said it is time to end the quasi-public nature of what is supposed to be a wholly public service. For Angotti, the path is clear.
“The only solution is public subsidy,” he said. “You have to.”
Workers and Riders United?
In addition to petty management and abysmal working conditions, yet another headache for transit workers struggling for a fair contract is a public that often views them as greedy layabouts or, worse, ambassadors of a wasteful Metropolitan Transportation Authority.
During the transit strike of 2005, Mayor Michael Bloomberg, the city’s wealthiest resident, called the strikers thugs. Public opinion was divided with many liberals expressing resentment toward the workers. One of my more progressive, though monied, friends complained at the time that transit workers didn’t deserve more pay or benefits, because so many were rude to him (“You try keeping up such a cheery attitude working 40 hours a week underground,” I thought at the time.)
The historical theme is obvious. Going back to the 1930s, there’s been an understanding among riders that these low-class workers are destined to stay in this sorry state, and any effort to better themselves was messing with the natural order. At one time these agitators were Irish thugs. Now they’re African-American and West Indian thugs. Either way, the narrative goes, these mopes with cushy civil service jobs need to make do with less.
I spent three years as a transit reporter for a weekly newspaper, and in that time I covered a tremendous amount of worker suffering, and often, unnecessary deaths in the name of providing this valuable service. I started my time with two track workers being struck and killed by trains during repair work in 2007. Both accidents were avoidable and resulted in little change when it came to work safety rules, despite an earlier study that the hazards of underground train work were similar to those in coal mining. The last story I filed was the sentencing of a young man who stabbed bus driver Edwin Thomas to death in Brooklyn, for refusing to give him a transfer because he didn’t pay his fare.
I vividly remember hearing station agent Tamesh Ramroop, during a 2010 rally to stop station worker layoffs, describe how in his short tenure he’d watched violent criminals roam the subways with impunity, and in one instance, how one locked him in his booth and sprayed gasoline inside in a failed effort to set him ablaze. What did his superiors care about after this incident? Not his safety, but that he stay after his shift to ensure that all the cash collected was dried.
And yet he and others are seen as idle relics of the past still collecting paychecks. Other workers act as a target of rider outrage, especially bus operators, who, besides having one of the hardest jobs in the system, are the victims of more assaults by riders than any other transit job title.
Riders have legitimate gripes: The fare is going up, trains are more crowded, stations are filthier, and bus lines have been cut. And they see the workers as the face of all this, while press organs for the MTA moan that these ungrateful civil servants want a bigger share of the agency’s ever more crunched budget. What’s often ignored is that these two groups want the same thing: More accountability, more responsible spending, more investment from Albany and more service.
It has historically been hard for the transit workers union to make this connection. In the last round of contract negotiations, union President John Samuelsen invited rider advocates to join the workers at the bargaining table, but to no avail. The union has made station cleanliness and an assurance that student MetroCards remain free contract demands.
Two years ago when the MTA pushed station agent layoffs, and while Samuelsen was acting to protect members’ jobs, the union campaign’s central focus was ensuring rider safety. Since then, the campaign has joined forces with rider groups to advocate more funding from Albany and Washington, and shifting MTA money from its capital budget into operational expenses.
Occupy Wall Street protesters are making the connection by channelling rider frustration with the MTA. Other community activists have sided with the transit workers during this go-around. But there are still challenges. The union has a tendency to alienate allies due to its constant internal strife. Racial tensions linger, and there will always be a rivalry between train and bus workers. Union activists are split between revolutionary anti-capitalists and pragmatic, apolitical members who just want a wage increase.
It’s a struggle for the union to overcome, especially around questions on which the union and rider advocates don’t agree, such as reforms that would make the system more efficient but might undermine existing seniority rules. But real rider solidarity will develop with an increase in class-consciousness, something we’ve seen on the rise since Occupy Wall Street began.
And that is perhaps why the transit workers were the first union to come out in support of the Zuccotti Park occupation.