January 14, 2012

THE NEWS that Metro wants to raise its rail and bus fares for the third time in three years has been met by the sounds of commuters gnashing their teeth and cracking their knuckles. Given Metro’s generally spotty service, the outrage directed at the transit agency is understandable but somewhat misplaced. The culprits are the stock market’s travails, a veteran labor arbitrator and, not least, a toothless federal statute.

Those factors — all beyond Metro’s control — are driving fares higher and are likely to continue doing so. The relatively modest fare hikes this year are apt to be followed by steeper ones soon.

Under Metro’s proposed budget for the fiscal year starting in July, base rail and bus fares would jump by a dime to $1.70 and $1.60, respectively. Labor costs, which account for 70 percent of Metro’s $1.5 billion operating budget, are the main drivers of those fare increases, totaling $66 million, and the $53 million in additional subsidies Metro is seeking from the localities it serves.

Three main factors are pushing up labor costs:

l Pension and benefits. As with many states and localities, Metro’s pension fund, which supports thousands of retired workers, took a hit in the stock market’s swan dive three years ago and hasn’t fully recovered. That’s forced the agency to embark on a multi-year effort to shore up the fund, starting with $35 million this year.

It doesn’t help that Metro workers, unlike public employees elsewhere in this area (except in the District) pay nothing toward their own pensions or that pumped-up overtime wages earned by workers in their final work year are used as a basis to drive up pension payments.

l Binding arbitration. To control labor costs and hold down fare increases, Metro waged — and, last year, lost — a pitched battle with the union representing about three-quarters of its 11,500 employees. Even after going to federal court, the agency was unable to overturn the decision of a labor arbitrator who ordered wage increases of 9 percent over three years, a decision that cost the agency more than $100 million. Incomes for Metro workers rose, and continue to rise, even as salaries for many state and local government employees were frozen or cut.

l Federal law. An obscure statute with the mouth-filling name of the National Capital Area Interest Arbitration Standards Act has left Metro with little room for maneuver in its contractual standoffs with labor. If Metro officials are serious about keeping fares from spiraling higher, they must seek tougher statutory language from Congress. That would bolster their position going into this year’s crucial negotiations on a new labor contract, whose outcome will determine whether the price of riding buses and trains remains within reach for millions of area residents.