The public wants to know why Metro's costs go up so fast. The answer is clear: Metro is obligated by prior and existing contracts to pay our transit union employees a cost-of-living increase consistent with the area's rate of inflation, and to pay it four times per year.

That's right! We pay our transit union employees a wage that is adjusted quarterly to approximate the increase in the consumer price index in this area. And even when our current collective bargaining agreement ends, a 1978 court decision requires us to continue to make quarterly payments until agreement on a new contract is reached.

Transit union employees' wages go up faster and more frequently than other public employees' wages in this region. As a result, our transit union employees are almost completely protected from the ravages of inflation. In fact, this expensive and unwarranted protection to nearly 5,500 employees contributes to the area's inflation.

How did Metro get into such a spot? The previous management, under O. Roy Chalk of the privately owned D.C. Transit Co., agreed to a full- percentage quarterly cost-of-living provision just a few days before Congress approved legislation in 1973 transferring all assets and employees of D.C. Transit and three other private companies to the Washington Metropolitan Area Transit Authority.

That legislation also incorporated a requirement that if Metro and its transit unions cannot reach agreement through collective bargaining, all disputes shall be resolved by compulsory and binding arbitration.

Ever since, Metro management has tried to change that expensive cost-of-living provision. But on four successive occasions--in 1974, 1976, 1978, and 1980--Metro and the union were unable to agree on a less expensive annual cost-of-living provision. Each dispute was taken to an arbitration board consisting of one member appointed by management, one by the union and one mutually selected by management and labor.

On four straight occasions, the arbitration board decided 2 to 1 to continue the full-percentage quarterly cost-of-living provision. Metro submitted a minority report and voted no four straight times. The first minor improvement, reached through arbitration last year, modified the full-percentage quarterly increase for any increase in the inflation rate above 9 percent.

Compulsory arbitration does have some advantages: it generally restricts strike activities and provides a means to resolve labor disputes, contract disagreements and individual employee grievances. But it takes away any real reason to negotiate seriously. The union knows it can unilaterally invoke arbitration. And it knows that Metro is obligated to pay each quarterly wage increase even after a contract has expired.

This history and the problems created by compulsory arbitration persuaded Metro last year to recommend amended legislation to eliminate this provision. But we have not been successful here either. To change Metro's federal statute, which is an interstate compact, requires that the same amendment be approved word for word by the legislatures of Maryland and Virginia, the District of Columbia Council and Congress. In 1981, the Virginia legislature approved an amendment eliminating compulsory arbitration; but the same amendment was defeated 2 to 1 in the Maryland legislature.

Nevertheless, we are committed to pursuing reasonable measures that would further modify the cost-of-living payment. We know that it is a benefit to our 5,500 transit union employees. But we also know it is an unfair burden for the other taxpayers and working people in this region. We know it is the single biggest cause of Metro's rising budget. Since there is no adequate tax dedicated for transit in the region, annual fare increases and steadily increasing payments are required from the eight participating local governments.

Metro's most severe problem is the cost-of-living provision. If we could change it by collective bargaining with the union, significant relief would follow for those who bear the burden of Metro's budget.

I am convinced that Metro must do a more effective job of negotiating in good faith with the transit unions. That continues to be our primary objective. And I know that Metro's board of directors and General Manager Richard S. Page are committed to resolving labor differences through collective bargaining.

I am also convinced that the compulsory arbitration procedures can be improved. Legislation may be necessary. For example, arbitrators could be required to consider Metro's budget and ability to pay--which should be fundamental primary criteria in any event. The process also might be improved by requiring mutual agreement by management and labor before invoking arbitration. And legislation could provide either mediation and/or fact-finding as interim steps prior to invoking arbitration.