Federal Secretary of Labor Thomas Perez gave California Governor Jerry Brown just two weeks to fashion a legislative fix to an impasse over implementation of the pension reform bill that’s now threatening the delivery of $4.6 million in federal transit grants to Santa Barbara’s Metropolitan Transit District (MTD), and up to $1.6 billion in federal transit funds to 85 other transit districts throughout the state. Perez notified Brown that the Department of Labor remained “concerned” the reform bill “diminishes the substantive rights of transit employees under current collective bargaining agreements and narrows the future scope of collective bargaining over pensions.” Because of that concern, the Department of Labor has declined to green-light the release of the funds. At the same time, it has taken no action and issued no formal ruling.
For the MTD, the loss caused by this limbo could constitute a 21 percent reduction in operating revenues, which, if not rectified, would lead to a 30 percent cutback in customer service and the layoff of up to 50 bus drivers. In the Perez letter to Brown — dated August 1 — Perez suggested that California could exempt transit workers from the newly enacted pension reform as was recently done in other states in the same boat, such as Wisconsin, New Jersey, Ohio, and Massachusetts. Lobbyists with the California Transit Association say Brown used every connection he had in Washington, D.C., to address the issue. Likewise, these lobbyists have suggested that the Brown administration would be loath to carve out exemptions to so major a law so freshly passed.
In the meantime, MTD’s board discussed the possibility of suing the Department of Labor during this week’s meeting, though no action was taken. The lawsuit under consideration involves a $2.3 million payment of federal transit funds that was scheduled to have been released before the pension reform act went into effect. Members of Teamsters Local 186 and MTD management have both lobbied the Department of Labor for release of those funds — as has Congressmember Lois Capps — though without any apparent effect. In his letter to Brown, Perez warned that if Brown did not act by August 16, he would respond by issuing actual rulings, first for the Los Angeles County Municipal Transportation Authority and then for transit agencies of lesser size. While Perez did not state what those recommendations would be, in the context of the letter, it was clear they would not result in the release of transit funding.