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MBTA talks with unions may target healthcare

The MBTA is haggling over contracts with 29 of its 30 unions, and the negotiations, observers say, could be the most contentious in years.

The discussions are likely to center on the T's generous retirement plans, including free healthcare benefits.

The contracts under negotiation, including one with the Boston Carmen's Union, the largest and most powerful at the Massachusetts Bay Transportation Authority, are scheduled to expire June 30. The T is trying to cut costs, and it also plans to raise fares in January 2007 for the second time in three years.

And it is bracing for a flood of retirements. One-third of its 6,200 employees would become eligible to retire in the next five years.

Combined with the unions' traditional unwillingness to give back hard-won benefits, observers and former T officials say the probability of a transit strike in Boston is now higher than ever. Daniel A. Grabauskas, the T's general manager, has said he hopes to avoid a work stoppage.

''Dan Grabauskas faces a major challenge, given the very clear need for the T to hold down cost increases," said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation and a member of a Special Transportation Finance Commission appointed by legislators and Governor Mitt Romney. ''There is no way that the T can afford the kind of increases of past contracts."

Charles D. Chieppo, the director of policy and advocacy for Mass Insight, a nonpartisan economic development research firm, said that based on the T's financial situation, ''a strike is more likely now than at any time in the recent past."

Over the past several years, the T has cut its workforce and expenses so much that there remains little to trim other than salaries, workers compensation, and retiree benefits.

''It will be a contentious year because there's very little . . . flexibility left," said a former MBTA official. The official spoke on condition of anonymity because public discussion could affect his private-sector job.

Another factor that could have a huge influence on the outcome of the negotiations is this year's gubernatorial election.

''All the candidates are going to be seeking union support and the unions are going to be seeking a horse to ride," said Joseph M. Giglio, an executive professor of general management at Northeastern University, who is also a member of the Transportation Finance Commission.

T and union officials declined to comment on the talks, or did not return phone calls seeking comment.

''Collective bargaining agreements are not negotiated in public," an MBTA spokesman, Joe Pesaturo, said in an e-mail message.

Others familiar with the T's financial situation and past union contracts say the authority faces an uphill battle trying to control retiree benefits. The approximately 2,200 potential retirees over the next five years approaches the total number of retirements from the T in the past decade, T officials said.

Of the T's $922 million in operating expenses this fiscal year, wages make up 37 percent and healthcare and other benefits account for 15 percent. In the agency's preliminary operating budget for the fiscal year starting July 1, higher pension costs account for 15 percent of the $65 million increase.

Not only do retirees get free medical care free, but union contracts allow employees to retire with just 23 years of service. Their pensions pay them about 57 percent of their average salary during their three highest-earning years.

Average MBTA salaries in 2004 were $54,981 for a full-time bus driver, $56,616 for a subway driver, and $57,608 for a motorperson on the Green Line trolleys, T officials said. T bus drivers were among the highest paid in the nation in 2004, according to the Federal Transit Administration.

The Pioneer Institute, a Boston think tank, says wages at the T are among the highest in the country for almost every class of employees within the system.

However, the current contract with the Carmen's Union, approved in December 2002, gave them the lowest wage increases ever, with a salary freeze the first year and raises of 2 percent, 3 percent, and 4 percent in subsequent years.

Paul Regan, executive director of the MBTA Advisory Board, which represents towns and cities served by the T, said he isn't sure whether unions will be willing to agree to such small raises again.

The free healthcare is unique, Grabauskas said at a budget presentations last month before the transportation finance commission. Several commission members said the T needs to curtail the benefit as it tries to pay off $8.1 billion in debt, the highest for any US transit agency.

In the two most recent transit strikes in Philadelphia and New York, management and labor also skirmished over healthcare.

In Philadelphia, a seven-day strike stranded 400,000 riders last year when management refused to back down over its plan to have employees help pay for healthcare. Prior to the contract approved in November, union members paid nothing for medical benefits.

In New York, the short strike in December at the Metropolitan Transportation Authority was also over healthcare payments. A new contract has not been signed.

Mac Daniel can be reached at mdaniel@globe.com.

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