Union negotiations Pre-strike negotiations The previous contract between MTA and its workers expired at 12:01 a.m. EST (05:01 UTC) December 16, 2005. The MTA and the
Transport Workers Union, led by
Roger Toussaint, were negotiating to settle a new contract. As they were unable to reach an agreement, the TWU extended the deadline to December 20, 2005, but since the 12:01 a.m. EST (05:01 UTC) December 20, 2005 deadline was not met, the union decided to strike. A "limited strike" began on two private bus lines, (
Jamaica Buses Incorporated and
Triboro Coach Corporation), on Monday, December 19, 2005, when their 750 drivers walked off the job. Private carriers were chosen for this "limited strike" because they are not covered under New York state law. However, when these private lines were integrated into MTA Bus on January 9, 2006, their workers became public employees subject to the Taylor Law. It was unclear at the time whether negotiations with the MTA would cover these employees. Full strikes on subways and buses began on Tuesday, December 20, 2005. The strike was announced by the union and took effect at 3:00 a.m. EST (08:00 UTC) December 20. At the time, Roger Toussaint declared: "The Local 100 Executive Board has voted overwhelmingly to extend strike action to all MTA properties effective immediately." After the announcement, it took approximately 1.5 hours for trains to finish their runs and return to the storage yards. In the days leading up to the transit strikes, critics and supporters alike contended that any labor action would affect mainly
low-income minorities, and the limited strike indeed turned out to be a real hardship for low-income
Queens residents. The local union's official reason for the strike was the transit workers' grievances over the hardships that were increasingly being placed on them by the MTA, specifically the issue of pensions. Among other things, the MTA called for the retirement age to be increased seven years (from 55 to 62) and for the amounts received at retirement to be reduced dramatically through the creation of a new "tier" (Tier V) of workers. Most importantly, the MTA had insisted on requiring negotiation of pensions as a condition of negotiating of a new contract although the Taylor Law prohibits this. The MTA had agreed to keep the retirement age at 55 before the strike.
Demands and counteroffers showed up at the
Brooklyn Bridge and
New York City Hall as part of an effort to generate
publicity. The TWU demanded that all members of the union receive a 6%
salary increase per year for each of the three years of the contract, plus more expensive accommodations for
maternity leave, and more money to spend on station maintenance. The MTA offered a 3% raise the first year, a 4% raise the second year, and a 3.5% raise the third year. The striking workers reportedly earn an average of about US$48,000 annually. The TWU also wanted to lower the age at which point the employee is eligible for a full pension from 55 to 50, and the number of years worked to qualify for that pension from 25 years to 20. A 20/50 pension plan had been put in place a few years after a transit strike in the mid-1960s. The immediate retirement of thousands of the most skilled workers, followed by the soaring costs of workers receiving one or more years in retirement for each year worked, was a key factor in the financial and physical collapse of New York City's transit system in the 1970s. By 1980, a less generous 25/55 pension had been imposed on new workers by the state legislature. By the time of the strike, the financial damage from the 20/50 pension plan had abated, because most of those who benefited had retired with their pensions funded, but those hired under the 25/55 plan were approaching the age at which those who preceded them had recently retired. A dissident group within the TWU, the New Directions movement, promised a 20/50 pension plan, among other things, as part of its election campaign. After several close and bitterly contested elections, by the time of the strike it had taken over the leadership of the TWU. Despite the damage done to the transit system by a retroactive enhancement of the pension plan in the 1960s, the New York State legislature passed a 20/50 plan several times over the objections of MTA management in the years leading up to the strike. Each time it was vetoed by then-
Governor Pataki, who had signed off on hugely expensive pension enhancements for other public employee unions. Conversely, the MTA had wanted to raise the retirement age for newer workers from 55 to 62, but dropped this demand in exchange for pension contributions from new workers of 6% of gross salary per year for the first 10 years of employment. Under the previous contract, workers contribute 2% to their pension plan. The pension benefit is not insignificant because it is estimated to cost 25% of salary over the entire 25-year period to fund a pension benefit of half the salary at age 55 for someone who starts employment at age 30. While this estimate is based on a 5% interest rate for discounting present values, a 3.5% annual salary growth rate and mortality according to the Annuity 2000 Merged Gender Mod 1 Table with ages set back 2.0 years. The key point to use the same assumptions to compare the annual yearly cost as a percent of salary for a half pay pension for someone starting at age 30 and retiring at age 62. The additional seven-year wait would drive the cost down to under 17% of salary annual cost. In essence, the MTA's proposal was a greater than 8% salary cut across the board. Using a slightly worse mortality table, the effective salary cut is still within the 7% to 6% salary cut range in terms of value given up. By not accepting the MTA pension offer, Local 100 of the TWU was not forced to a cut. Citing the rising cost of
health care, the MTA wanted new employees to contribute 1% of their salary to pay for
health insurance. Transit workers currently do not pay for health insurance. TWU workers also raised complaints about working conditions, including
hazards such as smoke, dangerous chemicals and extreme temperatures, abuse from supervisors, verbal or physical threat from passengers, and inability to access restroom facilities on the bus and subway. Just before the contract ended, the MTA offered a 3.5% per year raise and no change in the retirement age, with the caveat that new transit workers pay 6% of their wages into the pension fund, up from the 2% that current workers pay. The offer was rejected, and a strike declared. Combined, the pension and health care reforms the MTA sought would cost about US$30 million over the span of the three-year contract. Critics lambasted both the MTA and TWU for allowing a strike to occur over such a relatively small sum. However, the pension costs would balloon to US$160 million in the first 10 years, and US$80 million per year after 20 years. The MTA said that its reluctance to give in to the TWU on this point stems from fear of future deficits (projected to be $1 billion by 2009), although critics contend that its assertion of deficits in early 2005 was fabricated to justify fare hikes. The 2012 MTA budget maintained a $68 million deficit. In 2005, the MTA reported a $1 billion surplus, but it was borrowing heavily for "capital" projects that were little more than ongoing maintenance. In addition, many operating expenses had been reclassified as "reimbursible" by the capital plan, so money could be borrowed to pay for them. The surplus, in effect, was the MTA going into debt more slowly than expected. Some of the surplus came from abnormally high real estate taxes caused by the real estate boom, and quickly disappeared. Meanwhile, by 2009 MTA deficits outgrew the most pessimistic projections. However, unlike in the 1970s debts run up to add fare discounts and divert tax dollars away from maintenance spending via the capital plan were as much or more to blame as the pension plan, because the attempt to restore the 20/50 pension plan via strike did not succeed. The TWU, for its part, later claimed that it was forced to strike in order to prevent the MTA from raising the retirement age, rather than striking to reduce the retirement age. That was not the case, however, because it is state legislation that sets the terms of the pension plan, and under state law pension terms may not even be the subject of collective bargaining. Years after the strike, the pension plan remains retirement at age 55 after 25 years worked. And as a result of past underfunding, due to optimistic rate of return assumptions, and other pension enhancements that benefitted the TWU, such a retroactive inflation adjustment for retirees and an end to employee contributions, the cost of the pension plan to New York City Transit soared from $468 million in FY 2005 to $770 million in FY 2010 with a projected $950 million in pension costs forecast for FY 2014.
Consequences Losses by the MTA. The city estimated that it stood to lose US$400 million on Tuesday — the first day of the strike — and US$300 million each on Wednesday and Thursday.
Emergency services response time may have been slowed significantly due to increased traffic congestion, possibly creating a danger to life. It was estimated that
retailers and others lost about $400 million a day in the middle of their busiest season. Public schools used a delayed schedule. Some private high schools closed completely for the week, while other schools such as
St. John's had an ineffective
contingency plan. The same day of the start of the strike, Justice
Theodore T. Jones warned the transit union that there would be a US$1 million fine for every day that the Transit Authority is shut down. In addition, for each day the workers missed during the strike, they would be fined two days' pay (their regular
wages for the day plus a one-day penalty). Justice Jones had also considered imposing an additional US$1,000 per day of fines on the union leaders, as well as the possibility of
jail time for them. Legal representatives for the city presented arguments before Justice
Theodore T. Jones requesting individual penalties of US$25,000 per day, per public transit worker striking. And an additional US$22 million per day for economic damages as estimated by the
mayor resultant to lost tax revenue and overtime required for increased law enforcement. There were between 32,000 and 34,000 strikers.
Contingency plans Before the strike, bus drivers were instructed to finish their route and bring their buses to the depot, while subway trains finished their route, and brought their trains back to the yard. in
Manhattan was another one of the many streets closed off to all but emergency vehicles during the transit strike. In anticipation of exceptional
traffic volumes, an emergency traffic plan was put into effect shortly after the strike officially began. Many commuters used the
New York Water Taxi service from
NY Waterway as an alternative to get to
Manhattan from the
Brooklyn Army Terminal,
Hunts Point,
South Amboy, and
Jersey City. Other commuters simply stayed home from work.
Taxis were permitted to pick up multiple fares, and operated on a zone system rather than metered fare. Manhattan was divided into four zones, with one zone for each of the other four boroughs. The base fare, for travel within one zone, was limited to US$10 a person (although few cabbies charged less) charged in advance instead of at the end of the ride, plus an additional $5 per person for each additional zone. Public schools started two hours later than usual, with
school bus pickup times also two hours later than normal. Major
universities provided extended shuttle service to students, faculty, and staff; many students were in the middle of taking
final exams. While buses under the New York City Transit banner were non-operational, some
MTA Bus Company services—such as the
Command Bus Company—were running, including some express buses between Brooklyn and Manhattan. The
Fox News Channel operated its own buses during the strike along several major routes, giving riders a free trip while the station broadcast live from the buses. Multi-day
MetroCard passes were extended on a day-for-day basis for the duration of the strike. Passengers on the
Long Island Rail Road and
Metro-North Railroad were charged a strike fare of US$4.00 for intracity travel.
Metro-North Railroad had a special East Bronx shuttle (making all Harlem Line stops from
Mount Vernon West to
Grand Central Terminal, but bypassing
Tremont and
Melrose) by December 21. Regular peak trains did not stop in the Bronx. There were similar plans on the
Hudson Line, and in addition there was a special park and ride lot near
Yankee Stadium, and at
Shea Stadium in Queens. The
New Haven Line ran normally, stopping at
Fordham only in the Bronx, as usual.
Long Island Rail Road customers also faced service changes. There was no service to
Bellerose,
Hollis,
Rosedale,
Locust Manor,
Saint Albans, or
Hunterspoint Avenue during rush hours. Shuttle trains operated between Jamaica/Great Neck and Penn Station. During middays, additional shuttle service was provided to Bellerose and Long Island City. During the strike, the LIRR recorded a 60% increase in daily ridership compared to before the strike, and the Metro-North recorded a 40% increase. During the strike, the PATH recorded a 50% increase in daily ridership compared to before the strike. On January 20, 2006 it was announced that the contract was rejected by 7 votes out of approximately 22,000 cast. On January 31, 2006 Local 100's executive board met to decide on its response to both the MTA latest offer and the
rank and file's rejection. On March 15, 2006, Toussaint announced that he wanted a revote on the rejected contract and two days later, there was a vote of 24-12 in favor of a revote and on April 18, Toussaint announced that the union has approved it by a vote of 14,716 to 5,877. The MTA, however, has said the contract is no longer on the table and sought
binding arbitration to settle negotiation, which the arbitrator did on December 15 when the board imposed a new three-year contract that both the MTA and TWU Local 100 must accept. Beginning in June 2006, the Taylor law penalties were deducted from striking workers' checks. Withholding of the Union checkoff was withheld until early 2007. The TWU agree to pay over $300,000 a month towards strike-related penalties. ==Public response==