Transit
Judge says Metro can pay workers more... if it hiked fares
A Maryland judge has upheld an arbitration award of 3% annual raises to Metro's union employees, essentially finding that while the raises might force large fare hikes, that's not legal grounds to overturn the arbitration.
Photo by Oran Viriyincy on Flickr.
The law requires that an arbitration award not harm the "public welfare." WMATA argued that, with recent budget gaps, it couldn't afford the raises. But in the decision, the judge found, in essence, that WMATA could afford it if it only hiked fares, and the law doesn't allow him to consider the impact of fare hikes as part of the "public welfare."
Under the WMATA compact, Metro is required to adhere to binding arbitration over collective bargaining agreements with its union labor force. In 40 USC 18301 et seq., Congress set arbitration rules with the purpose of "lower[ing] the operating costs for public transportation" and the growth rate of labor costs.
The finding included statements that public transportation should be affordable; that the use of mass transit is affected by the prices charged, and that those prices are affected by labor costs; that labor costs have increased at an "alarming rate"; that higher operating costs cannot be offset by increases in fares or by increases in subsidy payments; and that arbitration standards will ensure that wage increases are justified and don't exceed the ability of transit patrons and taxpayers to pay them.
The statement of purpose and findings clearly include the cost to transit patrons at least four times. However, in the law the public welfare is defined as:
(1) the financial ability of the individual jurisdictions participating in the compact to pay for the costs of providing public transit services; andAnything missing? The definition excludes the fares transit riders pay. In fact, the arbitrators decided that the cost increases it awarded "could be funded ... by fare increases ... which would have no potential effect on the public welfare as defined by the Act."(2) the average per capita tax burden, during the term of the collective bargaining agreement to which the arbitration relates, of the residents of the Washington metropolitan area, and the effect of an arbitration award rendered under that arbitration on the respective income or property tax rates of the jurisdictions that provide subsidy payments to the interstate compact agency established under the compact.
Fare increases were required to balance the budget in 2008, 2009 and 2010. Bus riders using SmarTrip had their fares increase about 20%, while rail customers with SmarTrip started paying 40% more if they ride maximum distances during peak of the peak, and nearly 45% more for those riding short distances. This came during a period in which consumer prices were relatively flat; the change in the CPI from mid-2007 to today is only about 8%.
This trend is not sustainable. Future labor agreement increases will continue to put pressure on fares, and the arbitration guidelines mention the cost to riders but do not require the arbitrators to take fare increases into account.
Unfortunately, the only remedy appears to be congressional action, to add a provision to the law requiring the cost to transit passengers be considered as part of the "general welfare" that must be considered when approving wage increases for labor.
 | Michael Perkins blogs about Metro operations and fares, performance parking, and any other government and economics information he finds on the Web. He lives with his wife and two children in Arlington, Virginia.    |
Comments
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by MICHAEL on Aug 2, 2011 10:52 am • link • report
by Fritz on Aug 2, 2011 10:57 am • link • report
by anon on Aug 2, 2011 11:02 am • link • report
Well...k. But I'm going to stand up for Farragut North Christmas Lights Lady. She = the best.
by Ronald on Aug 2, 2011 11:05 am • link • report
by Jerome on Aug 2, 2011 11:08 am • link • report
by Phil on Aug 2, 2011 11:11 am • link • report
Remember, ATU 689 made it abundantly clear that it's management's fault--and management's alone--that its members suck at, among other things, customer service. Who's to argue with that?
http://greatergreaterwashington.org/post/11450/atu-local-689-answers-your-questions/
btw, great captcha: "trufail"
by Jeff on Aug 2, 2011 11:11 am • link • report
by Michael Perkins on Aug 2, 2011 11:11 am • link • report
The question, however, is whether the Board majority’s casual reference to the possibility of fare increases is enough to sink the entire Opinion. The Court thinks not. The Court regards the Opinion’s references to fare increases as much like
obiter dicta — they appear in the Opinion, to be sure, but they are not really central to its conclusions.
Then it says a little later:
The Court, after its overall review, is satisfied that the projected funding sources for the Board’s wage Award—other than fare increases—are just as likely to be sufficient to cover the Award as they would be with the inclusion of fare increases.
So, as I read it, the court is saying that it might not have approved the decision if it thought it would require a fare increase to pay for it.
I would welcome comments from attorneys.
by Ben Ross on Aug 2, 2011 11:12 am • link • report
By far, metro employees CS skills have to be among the worst in the nation. Or maybe it seems that way to us because we have more daily interactions with wmata employees than in other comparable places around the country.
Were the annual raises responsible for the last several rate hikes or just the potential one from this deal?
by HogWash on Aug 2, 2011 11:13 am • link • report
The Act’s definition of the “public welfare,”
see
40 U.S.C. § 18303(a), does not reference fares or fare increases.However, as noted earlier, an express purpose of the Act is to “to lower operating costs for public transportation inthe Washington metropolitan area,” 40 U.S.C. §
18301(b), and, in turn, to control “the prices charged for masstransit services,”
see
40 U.S.C. § 18301(a)(2). The Act also states that “higher operating costs incurred for publictransit in the national capital area cannot be offset by increasing costs to patrons, since this often discouragesridership and thus undermines the public interest in promoting the use of public transit.” 40 U.S.C. § 18301(a)(4)
I think the court's reasoning is the fare hikes that will be necessary -- as a result of this decision -- would be so small as not to discourage public transit.
We are looking, per the Examiner, at 96M vs 50M. So it is an "increase" as a result of the award of some 46M. I don't want to look up GGW's excellent series on budgets, but I'd suspect that is pennies per fare.
So the appeal isn't about fares, but more about whether the board's decision was consistent with a 7 part test.
by charlie on Aug 2, 2011 11:14 am • link • report
by Dave J on Aug 2, 2011 11:14 am • link • report
Under the law as written, I think the decision is correct. The objection I have is that the law doesn't include a key point when determining whether the public is harmed by the result of arbitration.
by Michael Perkins on Aug 2, 2011 11:24 am • link • report
Even aside from that I'd still react to this with a "so what?" It's unfortunate that the current WMATA structure is having to live with a poorly considered labor deal but it's long past time for them to quit screwing around and accept the repercussions of their actions. They agreed to this plan, they've appealed and tried to get it changed under a system that even involves the arbitrator considering what the average compensation is in the area and for the job performed. But they've continued to lose.
Compare it with how WMATA simply shrugs over costs they'd rather not have to pay - say, maintenance on railcars or expansions/changes to the system - that are the result of older choices they now have to live with. I see no visible sign that the agency puts an effort into finding ways to control those costs the way it has this labor agreement.
I'd be inclined to sympathy if it didn't feel like WMATA ALWAYS has blame for everyone else and takes no responsibility for prior actions whenever they're faced with a challenge. Fare collection, safety issues, online fare reloads, etc - gosh, we'd love to fix that but this thing here means we can't. It's exhausting and it harms their credibility.
by Don on Aug 2, 2011 11:31 am • link • report
The judge seems to be saying that it is illegal to award an increase based on a fare increase. That's based on a different portion of the law - but it means that the exclusion of fare increases from the definition of public interest is irrelevant, because fare increases are off the table.
In this interpretation, the opinion says that while the arbitrators were mistaken in raising the possibility of a fare increase, the award is okay because it's not based on that possibility. The arbitrators were making an irrelevant remark.
ps - Commenters who think the Republican congress will take money away from Metro employees and give it to riders are dreaming. The Republicans have made clear that money they want to take away from workers, social security recipients, etc. must go to yacht owners, hedge fund managers, and sundry multimillionaires.
by Ben Ross on Aug 2, 2011 11:33 am • link • report
by TGEoA on Aug 2, 2011 11:44 am • link • report
I really only skimmed the document -- as I said ScribeD is a pain to use for legal stuff.
by charlie on Aug 2, 2011 12:00 pm • link • report
In my view, this kind of thinking represents the Court's disconnection from reality. In my opinion, WMATA is very likely to raise fares in the near future and is probably going to cite labor arbitration as a justification for doing so. On the other hand, the data does not support the assertion that a fare increase would necessarily ridership. Many transit advocates, including those right here on GGW, propose raising fares instead of cutting services.
It is generally recognized that service cuts (plus economic factors, falling gas prices, etc) are more detrimental to ridership than fare increases. So perhaps the Board should have more persuasively argued that labor arbitration would lead to detrimental service cuts that would negatively affect the public welfare, instead of focusing on fares.
by Scoot on Aug 2, 2011 12:16 pm • link • report
I'm actually rooting for WMATA to fail now. That's how much I've begun to loathe them - and that's after I stopped riding because it was cheaper, faster, cleaner and more convenient to drive.
by varun on Aug 2, 2011 12:53 pm • link • report
All of which would be instantly untrue were Metro to fail.
by JeffB on Aug 2, 2011 2:05 pm • link • report
To satisfy those two interests, they gutted safety and maintenance to pay for the salaries of electoral supporters. They reasoned they could get away with it, because maintenance is something that hits you hard sometime in the future (I.e. past my next election cycle). This was the direct legacy of people like Jim Graham, but it was pervasive throughout the WMATA board. There was never any hope of additional subsidized funding, because DC didn't have the money, VA didn't care about METRO for years, and MD was a "do as I say, not as I do" kind of Democratic state. While it's disappointing that the states (and DC) didn't want to pony up more money, in the absence of more money, WMATA shouldn't have negotiated salary increases that they could afford (but of course they had to because it helped get people reelected).
Now, when we've run out the clock and are clearly in overtime on the lifetime of deferred maintenance, we have a choice of whether to increase rates or let the system crumble while people die. The union, while they are actually pretty horrid individuals, only did what their political cover allowed them to do. By allowing elected officials to sit on the WMATA board, we've allowed a direct conflict of interest between doing what's best for one's reelection and doing what's best for the WMATA organization. There's been no indication that SARLES is any kind of mold breaker. He still seems to toe the party line which means lying to the public about what is and is not feasible.
The sad fact is that we haven't hit rock bottom with WMATA and that this increase in salary is going to come directly from repair and replacement budgets in the short term. The DC members of the board are certainly not going to allow the fares to increase (and I doubt MD or VA will either) so we're once again going to defer maintenance until people start dying again.
Ride metro at your own risk.
by ahk on Aug 2, 2011 2:19 pm • link • report
Cheaper - car ownership and operating costs are independent of Metro's ridership cost. If our ride price declined to $3.55 at maximum or lower per trip or gas price increased to $7.50/gallon or more, ceteris paribus, Metro would be cheaper. The latter may happen in the next 10 years, the former is unlikely to happen ever.
Faster - agreed, possibly so. But more likely HOV restrictions are going to remain in place and since my primary commute into DC is on an HOV road, the impact is likely to be only at the ends of the trip.
Cleaner - no. just. no. And if you want we can add environmental cleanliness in here too and we can think about Metro's 284gCO2/passenger-mile versus 200gCO2/passenger-mile for my car.
More convenient - unless Metro leaves when I want to leave exactly, and suddenly decides to open a station 100ft away from my apartment, my car is still more convenient.
The only thing instantly untrue here is your unthinking assessment. Possibly it would be slower to commute in to work, but that is about it.
by varun on Aug 2, 2011 2:37 pm • link • report
K
by Kaleel on Aug 2, 2011 2:53 pm • link • report
Cleaner - no. just. no. And if you want we can add environmental cleanliness in here too and we can think about Metro's 284gCO2/passenger-mile versus 200gCO2/passenger-mile for my car.
Not sure where you got that stat from, can you give a link?
I assume it's this: http://www.fta.dot.gov/documents/PublicTransportationsRoleInRespondingToClimateChange2010.pdf
Also, transit serves dual roles - as alternative transit for some (who could otherwise own cars) and as basic mobility for others. So to just take an overall number for Metro and compare it to your car is wrong - because that overall number includes basic mobility trips we provide as a measure of basic human decency.
If you want to compare commuting, I can guarantee you that you alone in your car is much less efficient than me in a bus packed with 50 people. Hell, on AVERAGE metrobus beats out a person alone in a car. And that doesn't even count the fact that if that bus or the metro weren't there there would be way more congestion and emissions resulting from that.
by MLD on Aug 2, 2011 2:55 pm • link • report
Possibly it would be slower to commute in to work, but that is about it.
And how are all the people who currently ride Metro (weekday ridership - 771,055) getting to work? Think again.
by JeffB on Aug 2, 2011 2:58 pm • link • report
Indeed, which is why I agreed with you. The other points, however, remain true, no matter how much you'd like them to be instantly untrue.
by Varun on Aug 2, 2011 3:49 pm • link • report
I would opine that most larger systems in the Northeast are similar in the degree of surliness having extensively ridden Boston MBTA all the way through Baltimore MTA in the Northeast. Bus and Rail operators only seem to get more laid back and service friendly when you head South or West.
One thing however I have noticed is how DC riders have among them some of the most self absorbed riders when it comes to slowing down service. The number of people I've noticed who wait for the bus to come to a complete stop before beginning to get their belongings and exit the bus is almost cultural in DC versus being anomolies elsewhere. That people look at the PID display and still thwart the train's closing doors when another train is 2 minutes behind is troubling.
I'm hardly excusing WMATA Operators for not being customer service savvy at times but given some of the selfish attitudes carried by some riders, I can see where it could be very stressful to keep a schedule operating a bus or train in the Nation's Capitol.
by Adam on Aug 2, 2011 4:52 pm • link • report
by Kaleel on Aug 3, 2011 12:17 am • link • report
This is a general problem with most unions, they reduce or eliminate incentives.
by Jim on Aug 3, 2011 10:21 am • link • report
That judge's ruling is equivalent to pouring gasoline on a fire.
by ceefer66 on Aug 3, 2011 4:05 pm • link • report
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