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September 25, 2013
Editorial: BART needs to hold the line on labor costs

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(Sept. 25 -- By the Editorial Board)

The 60-day cooling-off period Gov. Jerry Brown ordered to bring a halt to last summer's punishing BART strike ends Oct. 10, exactly two weeks from today. Unfortunately, both sides in the dispute, the unions and BART management, say they are no closer to agreement. That's ominous.

A strike now would be extremely damaging. Summer vacations are over. School is back in full swing. Ridership is up over 30 percent from July's strike period. BART, the backbone of the Bay Area transportation system, carries close to 400,000 riders a day. A service disruption would wreak havoc on the area's recovering but still fragile economy. Both sides know that. Still, BART management must not be bullied into giving away more than the district and riders can afford.

Management's latest offer is within reason. It calls for a four-year deal with 2.5 percent pay raises each year. For the first time, BART employees would be required to contribute to their very generous pension plan, 1 percent the first year, increased by another 1 percent in subsequent years to a top of 4 percent total employee pension contribution by the end of the contract. In addition, BART seeks to cap health care at the cheaper of its two most popular family plans.

The unions want a three-year deal with a 4.5 percent raise each year. They also have agreed to contribute to their pensions for the first time. Their proposed contribution looks even bigger than management wants, topping out at 4.9 percent in the third year of the contract. But that offer is deceptive. The unions are also demanding a so-called "pension swap." They want BART management to reimburse workers for their pension contributions by giving them an additional 3.5 percent salary increase.

Management's offer amounts to $34 million in additional cost over four years. The unions are asking for $140 million over that same period - too much.

BART is at an expensive crossroads. The system is 40 years old and faces huge unavoidable capital improvement costs. It needs to raise $6 billion to replace worn-out cars, construct a new train control system and upgrade and expand maintenance capacity. To finance those crucial fixes, BART riders will begin paying higher fares in January. The average fare will jump from $3.59 today to $4.25 in 2020. In addition, BART is considering asking voters in coming years to approve a new sales tax for transportation. To sell that tax increase, BART must hold the line on labor costs.

Union leaders argue that they have not had a raise in four years. While that's true, they haven't faced the furloughs and layoffs that many of their fellow public employees have endured. Private-sector workers fared even worse. And BART workers are still among the most well-compensated transit employees in the nation.

BART managers cannot afford to give in to the union's unreasonable demands. At the same time, the district also urgently needs to watch the management side of its operations. It hasn't helped that a lavish vacation cash-out policy allowed a former BART general manager to receive more than $330,000 in earnings last year even though she wasn't working, according to news reports. That rightly disgusts the public and emboldens union negotiators. To ensure that BART fares are kept within reason in future years, the transit district needs to hold the line on its unions and its managers.

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