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The Political Climate and Transit Funding

With Wisconsin Gov. Scott Walker creating national attention due to his plans to essentially eliminate collective bargaining rights for public employees in his state, a lot of emphasis is being put on the future of labor rights and public employees.

However, one issue not getting the attention it might deserve is the fact that midsized Wisconsin transit systems might lose federal funding because the changes violate the 13c rules set down to protect transit worker rights in the Federal Transit Act, which dictates worker’s rights within a system must remain equal from the previous year.

With the midsized agencies getting more than 30 percent of their funding for the Federal Transit Administration, it could mean some significant cuts for these systems.

Andrew Johnson, deputy director of Waukesha Metro Transit in Waukesha, Wis. said unlike many other systems in Wisconsin, almost all of the employees in Metro are private workers contracted from Veolia Transportation. The fact Waukesha Metro doesn’t have public employees means the system doesn’t save any money under Walker’s changes to collective bargaining and Johnson said it also means the changes won’t mean a direct loss in funds.

However, in Wisconsin, Tier B transit systems like Waukesha Metro have all their federal funding pooled together by the state, which means the overall loss of funds will mean a cut in funding for Metro on top of other cuts Walker may make to regular transit funding.

“Indirectly, Waukesha will take a hit,” he said. “But the good news is that in the state a number of the transit systems have contracts in place with labor unions and that will stave off the problem for a little while because the collective bargaining law changes won’t affect existing contracts, but does mean we’ll have a problem in 2012 when those contracts start to expire.”

According to a recent Wisconsin Legislative Fiscal Bureau memo, the state received $60.9 million in federal operating transit aid and a total of $73.9 million in federal transit funding in 2010. Tier B transit systems, which serve populations between 50,000 and 200,000 people received a total of $19.1 million and Tier C systems, which serve areas with less than 50,000 residents, received $1.4 million.

The Milwaukee County Transit System (MCTS), which is the largest in Wisconsin, received $21.3 million and is the only Tier A-1 system in the state. The memo states MCTS will largely not be affected by the potential loss of federal funds because it contracts with a private non-stock corporation called Milwaukee County Transport Service Inc., which collectively bargains with MCTS and not Milwaukee County.

About $27.3 million in state federal transit aid will most likely not be affected by the changes, but the remaining $46.6 million could potentially be withheld from the state. If the budget repair bill eventually becomes law, transit systems without existing labor contracts in place will immediately lose their funding.

While Wisconsin leaders look to figure out how their transit systems will be affected by the changes to collective bargaining, one state isn’t seeing any problems in collecting federal aid even though union workers can’t collectively bargain wages and benefits. Texas is a right to work state and since the 13c agreement was passed by federal leaders in the 1960s transit systems haven’t been forced to collectively bargain with union workers.

Ben Gomez, executive vice-president of Dallas Area Rapid Transit, said outside of police and fire employees, public sector union workers aren’t allowed to negotiate wages or benefits, but they can file grievances with the system in order to try and find a fair solution for wages and benefits.

But at the end of the day, Gomez said leaders still make final decisions in a unilateral basis and each transit system has its own agreement with the U.S. Department of Labor as to what meets the 13c agreement.

“The federal government recognized they couldn’t force Texas to mandate a right that didn’t exist in Texas,” he said. “But the DART must meet with the union and confer with them on grievances based on wages, hours and working conditions.

“In most instances we just flat out work it out. There’s a lot of mutual respect for our mutual roles and we know we need each other.”

Wisconsin could have a similar system as Texas transit systems to allow grievances to take place in order to dictate working conditions, wages and other benefits, but it could still mean a loss in transit dollars as Texas has lacked collective bargaining with its public employee unions decades before the law took effect.

“We never had to deal with taking away an existing right back then when the law came around,” Gomez said. “But the good news is we still have a formal process where the unions can file their grievances and require the agencies to sit down.”

Anita Gulotta-Connelly, former general manager of the Milwaukee County Transit System and president of the Wisconsin Urban and Rural Transit Association, said only a few of the state’s transit systems are private, which means most of them will be effected.

MCTS will not, Connelly said, because its employees are private and unlike Tier B systems the federal money is handed out directly to the metropolitan area.

There has been some discussion by state transit systems to change their employees from public to private, but Connelly said it’s a difficult task and those with private employees have always been private.

The decision on aid amounts is going to come down at the federal level and if they’re willing to reach an agreement with local systems if Walker’s collective bargaining rule changes become law.

“These agreements date back to the Urban and Mass Transit Act of 1964,” she said. “Their whole purpose was to protect private employees who were being taken over by public systems and the whole purpose of it was to protect collective bargaining rights.”

One idea being discussed in Wisconsin is known as the “Memphis plan” which, according to a WURTA document, refers to the consolidation of three unprofitable bus systems 40 years ago where the new system was privately run yet publicly funded. However, the analysis states the plan is misleading because it maintained the status quo for employees.

To go from a public to private management model, a management firm would need to be hired, which requires up to one year for the competitive bidding process, wage and benefit issues would be difficult to resolve for the new employees or displaced workers and legal challenges could also exist.

It would take years for a system to be converted to a private system and the system would still lose its federal funding due to its contract agreement expiring.

The Valley Transit organization in Appleton, Wis., was able to reach and sign a contract agreement with its represented employees that will be in place through December 2012. Nikki Voelzke, community relations specialist with Valley Transit, said the deal was reached with the union March 4 and signed March 9 as the two sides realized the urgency of the necessary actions needed.

Although the fate of the collective bargaining changes remain in limbo, with the agreement in place Voelzke said the system has given itself time to find a new solution on how to operate going forward without losing federal funding. She said some solutions out there are either having a for-profit transit management company come in and take ownership of the company, or convert to a non-profit ownership system like MCTS.

The issue is being further pressured by a possible loss of $1.5 million in federal operating funds for Valley Transit due to the area it services growing to more than 200,000 in population.

“Based on the impact it would have had on us, we would’ve been out of service by the end of May,” she said. “We would’ve had spent all our money and wouldn’t have been guaranteed federal money and we wouldn’t want to have to spend more money than we’re guaranteed for the year.”