Going bankrupt? Have to raise fares? Give the executives a fat pay raise first.

Struggling T gives executives a 9% pay raise
Move sparks uproar amid fare hike talk

By Noah Bierman, Globe Staff | August 16, 2008

The MBTA's general manager gave a 9 percent raise to 240 executive employees this week after warning just a week ago that a financial crisis could spur a significant fare increase in 2010.

Daniel A. Grabauskas said the raises match the salary increases that union employees are receiving after going two years without a contract and three years without a cost-of-living increase. But his decision to include managers - who make an average of $83,650 - is sparking criticism, given the T's dire finances.

"The agency's broke," said Senator Robert L. Hedlund, a Weymouth Republican who serves on the Transportation Committee. "It's amazing in this day and age [that] management is never asked to sacrifice."

Grabauskas warned last week that commuters would face a "hefty" fare increase in 2010 if the Legislature does not help the MBTA with its $8.2 billion debt. Grabauskas, who works under a multiyear contract, did not receive a pay increase, nor did the T's general counsel. As general manager, Grabauskas is able to raise managers' salaries unilaterally, without board approval.

Riders interviewed on the Red and Green lines yesterday said the T should be trimming expenses at a time when commuters are being told they may soon have to pay more.

"It doesn't seem right at this point," said John Chan, 35, an environmental worker from Quincy. "They're constantly talking about increasing the fares."

René Mardones, an organizer with the T Riders Union, which represents low-income commuters, said "most of the members feel that the MBTA should deal with the finan cial crisis that they're facing right now . . . then find a way to raise the salaries of executives."

The raises, retroactive to July 1, first showed up in paychecks Thursday, said Lydia Rivera, a spokeswoman.

Grabauskas said it's customary to give nonunion employees the same cost-of-living increases - and the same reductions in benefits - that union members get. These employees, like the union members, have gone without a cost-of-living increase since July 2005, when pay went up 4 percent, he said.

"It's just the same pattern as everybody," Grabauskas said. "Everybody got treated the same."

While technically called executives and managers, not all of the nonunion employees are supervisors, Grabauskas said. They include some secretaries, budget analysts, and medical assistants, as well as the agency's highest paid executives.

Last month, an arbitrator settled a contract between the MBTA and the Boston Carmen's Union, Local 589, the largest of the T's unions. This pact, which generally establishes a precedent for the smaller bargaining units, gave workers 3 percent increases for each of the first three years of the contract, which covers four years, the first being 2006. Compounded, that amounted to a 9.3 percent increase when the contract was signed. The fourth year, they will get a 4 percent increase.

The T has since reached similar agreements with three other unions, Grabauskas said. He expects the remaining unions to follow suit soon, he added.

The MBTA has estimated the pay increases - if applied to all 6,300 MBTA employees - will cost the agency $150 million more over the next two years. Grabauskas has not said how the agency will pay for that, but he has acknowledged it will be a challenge given the MBTA had to deplete its reserves this year to patch a $75 million deficit this year.

But the MBTA will also realize some long-term savings because of concessions won as part of the new contract, applying to executive employees as well. Active workers now have to pay higher deductibles when they visit doctors, and retirees have to pay a portion of their health insurance costs for the first time ever.

While the T is currently experiencing a sharp rise in ridership, it has been grappling with unprecedented fuel costs, a lower-than-expected government subsidy, and the legacy of its large debt. Grabauskas has been able to plug this year's deficit by borrowing more and tapping the MBTA's reserves.

At a meeting with Globe editors last week, Grabauskas said a fare increase could be hefty in 2010 unless the Legislature assumes some of the T's debt or guarantees the agency a larger subsidy each year from the state sales tax.

Not everyone was critical of Grabauskas's decision to raise salaries for nonunion employees. Senator Steven A. Baddour, the Methuen Democrat who heads the Transportation Committee, said employee salaries and benefits were not the "tipping point" in the MBTA's financial crisis.

The executive employees who got pay raises this week "shouldn't be punished for being part of management and not being part of a union," Baddour said.

"The T's problems are much bigger."

Globe correspondent Jeannie M. Nuss contributed to this report.

Executive pay raises are a much better use of the money than....oh....lets say fixing the broken tracks, or the rusted train cars, or the green and red line bridges that are falling into the Charles River

Hey, do you know how many people work in the Massachusetts government?



That's right.
About half of them.

I'm convinced that there's a master playbook that all of these idiots are going by. Is anyone really this stupid? Other than the voters I mean? Seattle is using Boston as one of the cities to emulate in their regional transit "plan". Now I know why.

Gotta love Liberals and other people's money ...

quote:

Originally posted by zoom6zoom:
Hey, do you know how many people work in the Massachusetts government?



That's right.
About half of them.

thats a bit aggressive don't you think

I would have guessed about 1%

and I might be a tad high

And a good number of the ones who don't are named "Bulger"...

240 execs? That is 239 too many. What a joke, as usual.

I agree that government pay and executive pay are out of line, but why is it OK for the union to get a pay raise and not the management?

I don't think it is ok for any of them to get raises when the infrastructure of the Subway is in shambles and there is a huge budget deficit. It is the same situation with the Mass Turnpike, greed and corruption rule the organization. Toll collectors have been caught stealing money and filing false disability claims but the union is so strong that nothing is done about it.

quote:

Originally posted by Lord Vaalic:
I agree that government pay and executive pay are out of line, but why is it OK for the union to get a pay raise and not the management?

The union consists of workers who actually make money, vs management who should be considered a service to the workers. Without the workers, there is no company, no means to make money. SO, when workers get together, they should have much more pull then the fluff that is management.

quote:

Originally posted by Lord Vaalic:
I agree that government pay and executive pay are out of line, but why is it OK for the union to get a pay raise and not the management?

For the same reason it's okay for the sailors to get a raise and not the barnacles...

quote:

Originally posted by Surefire:
The union consists of workers who actually make money, vs management who should be considered a service to the workers. Without the workers, there is no company, no means to make money. SO, when workers get together, they should have much more pull then the fluff that is management.

The management consists of people who understand the vast (and dizzying) laws that must be followed for the negotiations of contracts between the company and the vendors, the company and the unions. The management consists of people who finance the corporation, draw up the paychecks, make sure that benefits are understood properly and that the appropriate documents are filed to make sure that it's all done legal and proper. Without the management the Union is just a bunch of people sitting around complaining about no jobs.

It's a symbiotic relationship, can't have one w/o the other. 240 pay raises when a financial problem is in the works is just plain wrong.

quote:

Originally posted by Surefire:

quote:

Originally posted by Lord Vaalic:
I agree that government pay and executive pay are out of line, but why is it OK for the union to get a pay raise and not the management?

The union consists of workers who actually make money, vs management who should be considered a service to the workers. Without the workers, there is no company, no means to make money. SO, when workers get together, they should have much more pull then the fluff that is management.

Wow.... actually I bet most companies could get along much better without the union employees by bringing in cheaper and more efficient labor. Im not management by any means, but I work for the auto industry and travel around from plant to plant. Believe me when I say that ignorant and incompetant management is a huge factor in the American auto companies downfall, but the workers are another big piece of the puzzle. People making &75K - $110K a year to do menial tasks and bitching the whole time about what the company "owes" them. I bet GM can get along without the UAW much better than the UAW can get along without GM. I would imagine the same is true of the Mass. Transit. If they are in this much trouble there should be no raises for anybody, management or labor.

Government and work in the same sentence is non sequitur.

And libs want the .gov to run health care....

UPDATE

MBTA rescinds 9% raises for top earners
Boost for nonunion staff drew widespread criticism

By Noah Bierman, Globe Staff | August 20, 2008

After a public rebuke from the Patrick administration, MBTA General Manager Daniel A. Grabauskas agreed yesterday to rescind a 9 percent pay raise for executive employees that had been criticized as excessive for an agency struggling to pay its bills.

Grabauskas granted the raise, which took effect last week, to 273 employees not covered by the MBTA's union contracts, saying it matched an increase recently won by unions that had gone without one for three years.

But he backed down yesterday after state Secretary of Transportation Bernard Cohen, who is also chairman of the MBTA board, sent him a letter urging him to rescind the raises for the most highly paid employees. Grabauskas issued a statement saying he would halt the payments in the next paycheck, while, at Cohen's suggestion, reinstating a 3 percent increase for the 87 nonunion employees making less than $70,000 a year.

Grabauskas, who makes $255,000, also said he would decline a $10,000 cost-of-living increase due under his contract this year. The MBTA's general counsel, William Mitchell, who makes $157,000, is also declining a cost-of-living raise of about $6,000, according to the T.

Grabauskas and Cohen declined interview requests through their spokesmen.

Grabauskas, as general manager, has the authority to unilaterally set pay for executive employees, but his latest decision had left some riders angry.

The Massachusetts Bay Transportation Authority carries an $8.2 billion debt load and is struggling to keep a balanced budget. Earlier this month, Grabauskas warned of a substantial fare increase on subways, buses, and trains in 2010 unless he receives help with the debt from the Legislature.

Grabauskas said last week that the raises were only fair, given a recent arbitration decision that gave the T's largest union a 9 percent increase: 3 percent for each of the two years it was without a contract and an additional 3 percent for the current year. He has said that not all of the nonunion employees are highly paid managers, but are instead administrative assistants and budget analysts.

But Cohen's proposal to give the lower-paid employees a 3 percent raise addressed that concern. In his letter to Grabauskas yesterday, Cohen said it was important to "leave no stone unturned in restoring financial health to all transportation agencies." An e-mail from Cohen's spokesman added that "other MBTA Board members have been made aware of and support this request."

"While recognizing these employees' important contributions to the success of the T's daily operations and the fact that they have received no salary adjustments for three years, the current serious financial challenges facing the MBTA require the board to pursue every avenue to find cost savings," Cohen wrote.

Grabauskas is one of the most visible Republicans left in state government, running a widely used system that has recently been beset by controversy, including a fatal Green Line crash, a skirmish with hackers, and the prospect of fare increases. His contract runs through May 2010, making it both financially and politically difficult for the Democratic administration to buy him out if the governor decides he wants a new leader.

Last week, at an MBTA board meeting, board member Janice Loux said she had "lost all confidence in our general manager" and criticized how he handled questions about the agency's automated fare collection system.

"I think the administration is trying to create friction," said Senator Steven A. Baddour, a Methuen Democrat who chairs the Transportation Committee and is a strong Grabauskas ally. "The reason they don't fire him is they can't find anybody better."

Rescinding the raises does not solve the MBTA's larger budget problems. The T still has to pay cost of living increases for 96 percent of its employees, or about 6,000 people, who belong to unions. That is expected to cost some $150 million over the next two years, according to earlier estimates.

Last month, an arbitrator settled a contract between the MBTA and the Boston Carmen's Union, Local 589, the largest of the T's unions. The pact, which generally establishes precedent for smaller bargaining units, gave workers a 3 percent increase for each of the first three years of the contract, which covers four years, beginning in 2006. The fourth year, they will get a 4 percent increase. Grabauskas has not said how he will pay for it, but has acknowledged it will be a challenge, given the need to borrow money and tap reserves to patch a $75 million deficit in this year's budget.

The MBTA also realized some smaller long-term savings from the arbitrator's ruling. Active workers now have to pay higher deductibles when visiting doctors, and retirees have to pay a portion of their health insurance costs for the first time ever. Grabauskas said in his statement last night that those reductions in benefits will be applied to executive employees, even though they will no longer get the raises granted to union employees.