Raises would cost at least $17.5 million
Leaders of BART's two largest unions have abandoned an offer to freeze employee wages and are now seeking a 3 percent raise over two years in one of the worst economies in recent memory. Their wage increase proposal would cost at least $17.5 million over 4 years. It comes on the heels of BART experiencing its worst sales tax revenue drop in its 37 year history and a 10 percent decline in ridership during the first half of June – all of which is making BART's projected $250 million, 4-year deficit worse, not better.
BART began bargaining with its five labor unions on April 1 to secure new labor agreements that would help close the $250 million, four-year deficit. The contracts with all five unions expire June 30. Visit www.BARTlabor.com for more on the on-going contract talks.
"For months we have been waiting for the unions to respond to cost-cutting options," BART Board President Thomas Blalock said. "Now two of our largest unions are asking for a wage increase that appears to take us in the exact opposite direction. This could worsen BART's budget problems and indicates that some union leaders are refusing to acknowledge the economic realities that BART, its riders and the public are facing."
Representatives from the Amalgamated Transit Union (ATU) and Services Employee International Union (SEIU) are asking for a half-percent wage increase for January 1, 2010; a half-percent wage increase for July 1, 2010 and salary hike of 2% to be effective January 1, 2011. The cost of the wage increase proposal is $17.5 million for just those two unions alone over four years. The cost would be even more if the wage increase were given to BART's three other unions as well as BART's non-union employees. Typically, whatever wage increases the two largest unions agree to, the rest of BART's employees will receive as well.
"Frankly, this is troubling for our riders who will begin paying increased fares starting July 1," Blalock said. "The average union member makes $114,000 in wages and benefits, far more than what many of our riders earn and more than most other transit workers across the country. The riders and management are prepared to make sacrifices to bring BART's finances into balance. "It's time for the union leaders to step up to the plate and join our riders and management in making the difficult decisions to resolve our deficit."
BART TRYING TO CLOSE $250 MILLION/4-YEAR DEFICIT
BART is working to reduce its $250 million, four-year deficit. The average union worker makes $114,000 a year in wages and benefits. Even without an increase in salary, the cost of simply maintaining the current benefits for BART employees over the next four years accounts for nearly half of BART's $250 million shortfall. Just to illustrate the order of magnitude, this amount would be the equivalent of a 15% increase in total compensation.
During the past few months, the Board, management and the riders have done their part to close the deficit by committing to savings and cost cuts worth $80 million and revenue increases in the form of fare hikes and parking charges. Those actions have helped to reduce the $250 million deficit down to just over $100 million. The BART Board is seeking $100 million in savings through labor negotiations by asking employees to pick up more of the cost of their benefits and pensions so the riders and tax payers don't have to. The Board is also asking unions to find productivity improvements through changing outdated and wasteful work rules.