In a last-minute political maneuver, the federal Department of Labor and California Governor Jerry Brown appear to have struck a deal that will avert multibillion-dollar cuts in federal funding to hundreds of transit districts throughout California, including $4.6 million that’s been earmarked for Santa Barbara’s Metropolitan Transit District. “I’m not going to leap up and down and sing and dance, but I’m tempted,” stated an ecstatic and greatly relieved Sherrie Fisher, executive director of MTD. “We don’t have the money in hand yet, she added, “but it’s going to happen.” For the past two months, Fisher and MTD have been conducting the equivalent of worst-case meltdown fire drills, hosting community meetings to explain how services could be cut by as much as 30 percent and as many as 50 of the district’s 150 drivers could get laid off.
According a press release issued by the governor, Brown will introduce a last-minute bill that will exempt all transit drivers from the provisions of the state’s pension reform act that went into effect this January. Because that act applies to transit agencies, newly hired unionized transit workers would be bound by state law to pay greater percentages into their retirement funds than transit workers hired before January 1, 2013. The major unions representing transit workers objected that the new bill usurps the collective bargaining process, and it filed complaints to that effect with the federal Department of Labor. The Labor Department is legally required to ensure that transit agencies receiving federal funds of any sort do not violate the letter or spirit of federal collective bargaining law. Once unions — like Teamsters representing MTD drivers — filed such objections, the Department of Labor issued a hold on most of the federal funds otherwise slated for California transit agencies.
MTD was slated to have received an infusion of $2.3 million this January; that was not sent. It’s slated to receive another infusion later this year; that, too, has been placed on hold. In response, MTD has eaten into reserves and onetime capital funds. But the agency was also preparing to start initiating cuts that would be nothing short of draconian.
The pension reform act is counted as one of Brown’s major achievements, given the massive extent to which most of California’s public employee pensions are underfunded. The irony here is the MTD’s drivers belong to a Teamster pension fund operated under federal — not state — jurisdiction, and which, by all reckonings, is financially healthy.
The plan, according to Brown’s press release, is that he will seek passage of a bill that will exempt all transit workers from the pension reform bill for one year, thus removing the basis for the Department of Labor to withhold funds. In the meantime, Brown — and the Sacramento Regional Transit District — will sue the Department of Labor, arguing that the provisions of the pension reform act do not, in fact, violate the collective bargaining protections required by federal law. The Sacramento RTD will sue because the Department of Labor issued an actual order this Wednesday that the district’s funds should be withheld. Up till now, the Department of Labor has taken pains to take no action one way or the other, hoping that by so (not) doing, the State Legislature could pass a bill that would resolve the issue.
Governor Brown, by all accounts, had knocked on every door in Washington, D.C., earlier this summer in hopes of persuading the Department of Labor to release the funds. For his efforts, he got a stern letter giving him an ultimatum to act by the middle of August or else. Despite all the sword rattling, Labor officials opted not to pull the trigger when the deadline came and went, allowing more negotiations to take place. By affirmatively denying funds to Sacramento, the feds opened the doors to a clear lawsuit by Brown and the Sacramento RTD, which in turn will allow federal judges to resolve the underlying legal issues involved.
All of this, however, is predicated upon the Legislature passing a bill exempting transit districts from pension reform. Given the numbers of dollars, transit districts, and transit-dependent passengers involved, it’s all but impossible to imagine such a measure not passing. But there’s not much time; the deadline for passage isSeptember 13 — next week. Barring any emergency action, that’s when this year’s legislative session concludes.