Audit Reveals MTA $560 million overtime Budget "Not Effectively Handled"

By Erica Jackson

A recent audit of the Metropolitan Transit Authority (MTA) by New York State Comptroller Tom Di Napoli’s office has concluded what most suspected: That the organization is not effectively handling its $560 million overtime budget.

 

In his report, Di Napoli offered, “We found that the MTA has not effectively managed and controlled its overtime. Rather there has been a culture of acceptance among MTA managers regarding overtime, and no real efforts were made to make significant changes in long-standing practices that resulted in routine, and often unnecessary, overtime.”  

 

Specifically, the report reveals that numerous employees are being paid so much overtime that their overtime pay exceeds their annual salaries.  Citing examples, the report states that in 2009 3,274 employees received overtime pay that equaled 50 percent of their annual salary; 147 of those employees were compensated with overtime pay that exceeded their annual salary.  In addition, more than 15 percent of the MTA’s 71,000 employees received overtime that equaled 30 percent of their annual salaries.

 

The need for the overtime, stated the report “was often not necessary.”  In fact, the report indicates that there was no valid justification for much of the overtime and that “some may not actually work all of the overtime hours claimed.”  Some of the overtime was also due to union rules, absenteeism and for services, such as routine track maintenance “that was performed by workers on overtime, because the workers’ regular work shifts coincide with peak service periods when the tracks are not available for routine maintenance.”

 

Under state legislation, the MTA, which has a budget of $4.6 billion, is supposed the be financially self sufficient by funding itself through fares. However, year after year, the MTA has reported financial deficit.  The deficit prompted state officials to a enact a controversial tax to support the MTA in March 2009

 

As previously reported on SmithtownMatters.com, the MTA Employer Payroll Tax requires that employers, including municipalities and school districts pay $3.40 on each $1,000 of payroll.  The tax has many up in arms and has prompted business owners and five Suffolk County towns, including the Town of Smithtown, to file lawsuits against the state.  The lawsuits claim the tax is “unconstitutional.” Smithtown Assemblyman Michael Fitzpatrick said that while most are not surprised by the audit, he does not believe the city delegation will allow for a repeal of the MTA tax.  “It makes me you really angry.  Why weren’t the inefficiencies of the MTA rung out before this tax was imposed?  Where was the comptroller?”

 

Perhaps, however, the report may prompt his colleagues to see that work rules and unions must be addressed before state falls into financial ruin.  He said “If we don’t start saying ‘no’ to unions, then the state is going to go off the deep end.  It is also incumbent upon the unions to start participating and help out.  The store has been given away for years for these people.”

 

Smithtown Councilman Kevin Malloy has his fingers crossed that the audit helps in the town’s fight against the MTA tax. He said, “The residents of Smithtown should not be paying for a service that they don’t receive.  Most residents don’t use the railroad. The MTA is very much out of control with very poor management. This is just a bad deal.”

 

Bill Schoolman, owner of Classic Coach in Southampton, said the audit verified what he already knew:  “That the MTA’s overtime is ridiculous and that there is no justification for it.” He said, “It further proves that the MTA payroll tax is a corrupt tax because it subsidizes and supports a corrupt organization.”  Schoolman has filed his own suit against the MTA.  He reports that the tax costs his business about $20,000 a year. 

 

The MTA says it is responding to problems outlined in the audit and is aware of the overtime problem.  In a statement to SmithtownMatters.com, the press office writes, “The comptroller’s audit confirms what we reported earlier this year and reinforces the need for aggressive actions we’re taking to reduce unnecessary overtime.  We will do our part, but active participation from our labor unions is the only way to make the type of impact we want.”

 

Under its plan to reduce overtime, the MTA says it will closely monitor shifts greater than 16 hours to reduce double-time payments; aggressively enforce sick leave abuse; report to agency presidents on a biweekly basis on overtime; work with the labor unions to change work rules that lead to unnecessary overtime.

 

The plan, says the MTA is expected to reduce overtime costs and save $22 million by the end of 2010 and $60 million in 2011.