Struggling T gives executives a 9% pay raise

Move sparks uproar amid fare hike talk

The MBTA's general manager gave a 9 percent raise to 240 executive employees this week after warning just a week ago that a financial crisis could spur a significant fare increase in 2010.

Daniel A. Grabauskas said the raises match the salary increases that union employees are receiving after going two years without a contract and three years without a cost-of-living increase. But his decision to include managers - who make an average of $83,650 - is sparking criticism, given the T's dire finances.

"The agency's broke," said Senator Robert L. Hedlund, a Weymouth Republican who serves on the Transportation Committee. "It's amazing in this day and age [that] management is never asked to sacrifice."

Grabauskas warned last week that commuters would face a "hefty" fare increase in 2010 if the Legislature does not help the MBTA with its $8.2 billion debt. Grabauskas, who works under a multiyear contract, did not receive a pay increase, nor did the T's general counsel. As general manager, Grabauskas is able to raise managers' salaries unilaterally, without board approval.

Riders interviewed on the Red and Green lines yesterday said the T should be trimming expenses at a time when commuters are being told they may soon have to pay more.

"It doesn't seem right at this point," said John Chan, 35, an environmental worker from Quincy. "They're constantly talking about increasing the fares."

René Mardones, an organizer with the T Riders Union, which represents low-income commuters, said "most of the members feel that the MBTA should deal with the finan cial crisis that they're facing right now . . . then find a way to raise the salaries of executives."

The raises, retroactive to July 1, first showed up in paychecks Thursday, said Lydia Rivera, a spokeswoman.

Grabauskas said it's customary to give nonunion employees the same cost-of-living increases - and the same reductions in benefits - that union members get. These employees, like the union members, have gone without a cost-of-living increase since July 2005, when pay went up 4 percent, he said.

"It's just the same pattern as everybody," Grabauskas said. "Everybody got treated the same."

While technically called executives and managers, not all of the nonunion employees are supervisors, Grabauskas said. They include some secretaries, budget analysts, and medical assistants, as well as the agency's highest paid executives.

Last month, an arbitrator settled a contract between the MBTA and the Boston Carmen's Union, Local 589, the largest of the T's unions. This pact, which generally establishes a precedent for the smaller bargaining units, gave workers 3 percent increases for each of the first three years of the contract, which covers four years, the first being 2006. Compounded, that amounted to a 9.3 percent increase when the contract was signed. The fourth year, they will get a 4 percent increase.

The T has since reached similar agreements with three other unions, Grabauskas said. He expects the remaining unions to follow suit soon, he added.

The MBTA has estimated the pay increases - if applied to all 6,300 MBTA employees - will cost the agency $150 million more over the next two years. Grabauskas has not said how the agency will pay for that, but he has acknowledged it will be a challenge given the MBTA had to deplete its reserves this year to patch a $75 million deficit this year.

But the MBTA will also realize some long-term savings because of concessions won as part of the new contract, applying to executive employees as well. Active workers now have to pay higher deductibles when they visit doctors, and retirees have to pay a portion of their health insurance costs for the first time ever.

While the T is currently experiencing a sharp rise in ridership, it has been grappling with unprecedented fuel costs, a lower-than-expected government subsidy, and the legacy of its large debt. Grabauskas has been able to plug this year's deficit by borrowing more and tapping the MBTA's reserves.

At a meeting with Globe editors last week, Grabauskas said a fare increase could be hefty in 2010 unless the Legislature assumes some of the T's debt or guarantees the agency a larger subsidy each year from the state sales tax.

Not everyone was critical of Grabauskas's decision to raise salaries for nonunion employees. Senator Steven A. Baddour, the Methuen Democrat who heads the Transportation Committee, said employee salaries and benefits were not the "tipping point" in the MBTA's financial crisis.

The executive employees who got pay raises this week "shouldn't be punished for being part of management and not being part of a union," Baddour said.

"The T's problems are much bigger."

Globe correspondent Jeannie M. Nuss contributed to this report. Noah Bierman can be reached at nbierman@globe.com.