NYC transit workers win costly wage hike: MTA

A train conductor leans out his window as a subway car starts down the tracks in New York, March 25, 2009.

NEW YORK (Reuters) - New York City transit workers were granted wage hikes of more than 11 percent over three years on Tuesday, the Metropolitan Transportation Authority said, warning that as a result it could only rule out more fare hikes for this year.

The cash-strapped state agency, which runs the city's buses, subways and commuter railroads, raised fares in June about 10 percent.

At the time, the MTA said it planned no further hikes for these fares and bridge and tunnel tolls until 2011.

The MTA called the arbitrator's decision on Tuesday "extremely disappointing," and said the decision failed "to recognize the economic recession in the region and the impact of the downturn on the Metropolitan Transportation Authority."

The nation's biggest mass transit agency, whose chairman previously said its budget was balanced on the head of a pin, also faulted the arbitrator for recommending that it "raid its underfunded capital program" and the federal economic stimulus plan to pay for the wage hikes.

Transit workers also will no longer have to pay for part of the cost of their health insurance, an expense they had accepted in their 2005 contract, the MTA said. That contract was reached after their strike in the bitter winter of 2005.

The union, TWU Local 100, has criticized Mayor Michael Bloomberg, who said on Monday the MTA could not afford to match the increases he granted city workers and urged the arbitrator to have them pay for part of their health benefits.

The MTA had only budgeted for a 1.5 percent salary hike and the agency said the new contract would cost it $350 million more than the extra $10 million it estimated having to pay in 2009.

The additional cost will be $100 million in 2010 and $240 million in 2011.

"The MTA staff will provide the MTA Board with recommendations for balancing the financial plan with the least possible impact on MTA customers," the agency said in a statement. "No additional fare increase will be recommended in 2009," it added.

(Reporting by Joan Gralla)