Update: New Jersey Transit reaches deal with unions, avoiding strike

[TRENTON] New Jersey Transit and its railroad-worker unions reached a tentative agreement on wages and benefits, two days before a scheduled strike that threatened to strand tens of thousands of Manhattan-bound commuters.

New Jersey governor Chris Christie said the new contract, which still needs to be ratified by union members, will run through the end of 2019. He declined to provide other details of the agreement except to say it doesn't require an immediate fare increase. The unions had set a March 13 deadline for a strike.

"It's good news on many levels and it averts a strike and avoid damaging our economy," Mr Christie told reporters in Newark.

"This is going to give workers and commuters a measure of certainty going forward."

New Jersey railroad employees last walked off the job in 1983, a stoppage that lasted more than a month. The potential disruption this time was far greater, as the Lincoln Tunnel and a midtown Manhattan bus terminal operated by the Port Authority of New York and New Jersey have reached capacity at peak travel times, and New Jersey Transit had planned to add coach service.

Contracts for 4,200 unionized rail workers expired in 2011. An emergency negotiating board appointed by President Barack Obama had recommended that New Jersey Transit adopt the final offer made by the Rail Labor Coalition, representing 11 unions, at a cost of US$183 million.

The offer called for a six-and-a- half-year contract with annual raises of 1.5 per cent to 3.5 per cent and a maximum 5 per cent annual health-care contribution, according to the presidential board report.

New Jersey Transit said the state couldn't afford the recommendation. The agency had offered a 7 1/2-year contract that skipped raises for 2011, awarded US$1,000 lump-sum payments for 2012 and had annual increases of one per cent to 2.5 per cent. It had wanted employees to cover as much as 20 per cent of medical costs.

The agency last week said that its strike contingency plans, which relied on extra bus service, could accommodate just four in 10 train commuters. About 65,000 people would have had to make alternate arrangements, the agency said. It urged employers to allow telecommuting and a four-day work week, and warned of highway back-ups of as much as 25 miles (40 kilometers) on the New Jersey Turnpike and Interstate 78.

Funding for New Jersey Transit in the annual state budget has fallen to about US$33 million from US$350 million in 2005 when adjusted for inflation, according to a report released last Thursday by New Jersey for Transit, a coalition pushing for more spending. The drop has led the nation's third-largest commuter system to raise fares five times since 2002, and divert money for capital improvements to cover operating costs, the group said.

New Jersey residents, who have one of the country's longest average commutes, have been forced to pay more for mass transit as delays and breakdowns increase. Another increase may be inevitable as costs rise and state contributions drop.

BLOOMBERG