--Outrageous salary demands from the executives, I mean. Then again, country club dues and Asian sex tour fees have gone up considerably in recent years ;)

What I wanna know is, why don't the workers demand a "housing allowance" too (see below), instead of just healthcare and pension? Capitalism is a rising tide that lifts *all* ships, right?

Facing Deficit, M.T.A. Gave a 22% Raise to Its Director



December 11, 2004
Facing Deficit, M.T.A. Gave a 22% Raise to Its Director
By SEWELL CHAN The New York Times

The chairman of the Metropolitan Transportation Authority, which is seeking a fare increase and new state taxes to stanch a growing budget deficit, approved a 22 percent pay raise for the authority's executive director last year; the raise took effect last January.

The action by the chairman, Peter S. Kalikow, raised the annual salary of the authority's highest-paid officer, Katherine N. Lapp, to $235,000 from $192,500.

The pay increase was not publicly discussed, though Mr. Kalikow said there was no requirement to do so.

Mr. Kalikow and other officials said the increase was an appropriate step because **the presidents of New York City Transit, Metro-North Railroad and the Long Island Rail Road had received substantial pay increases in 2002 and 2003.**

For several months at the end of last year, all three presidents were paid more than Ms. Lapp, to whom they report.

"It was absolutely an appropriate and correct thing to do," Mr. Kalikow said of the raises. "I think our guys are absolutely compensated correctly."

The pay raise for Ms. Lapp, who was appointed by the M.T.A. board with support from Gov. George E. Pataki, was approved after the heads of the authority's largest subsidiaries were awarded substantial raises starting in 2002. The pay increases are reflected in payroll records obtained from the authority under the state's Freedom of Information Law and were discussed by officials interviewed yesterday.

Ms. Lapp did not respond to an e-mail message inquiring about her raise. The authority referred all questions about the pay raises to Mr. Kalikow and to Thomas J. Kelly, the M.T.A.'s spokesman.

In April 2002, the president of New York City Transit, Lawrence G. Reuter, negotiated a new contract with the authority. His salary rose by 23 percent, to $225,000 from $182,500.

A year later, in April 2003, the president of Metro-North Railroad, Peter Cannito, renegotiated his contract and received a 25 percent pay increase, to $215,000 from $172,500.

In October 2003, the senior vice president for operations at the Long Island Rail Road, James J. Dermody, was named its president. He is paid $215,000, the same as Mr. Cannito. He previously made $172,010.

Two other agency heads also received substantial salary increases last year.

Michael C. Ascher, the president of M.T.A. Bridges and Tunnels - also known as the Triborough Bridge and Tunnel Authority - received a new contract, raising his salary to $182,500 from $157,500.

Mysore L. Nagaraja was appointed the first president of the authority's new Capital Construction Company, with a salary of $182,500.

Mr. Nagaraja had been the senior vice president for capital program management at New York City Transit, where he was paid $161,000.

Most of the M.T.A.'s 65,000 employees receive annual raises up to 3 percent.

Ms Lapp and the five agency presidents receive other compensation in addition to their base salaries. They each receive a $13,000 annual contribution - the maximum amount allowed this year under federal rules - to their retirement plans under Section 457, a pension arrangement.

**Ms. Lapp and Mr. Reuter also receive a $4,000 monthly housing allowance, while Mr. Cannito, Mr. Dermody and Mr. Nagaraja each receive $3,500 a month for housing. Mr. Ascher was not given a housing allowance.**

The salaries were negotiated by Gary J. Dellaverson, the director of labor relations at the authority, in consultation with Ms. Lapp. In the case of Ms. Lapp's salary, he said, he consulted with Mr. Kalikow to determine the size of the pay raise. Mr. Dellaverson, a lawyer who has worked for the authority since 1990, is paid $187,975, second only to Ms. Lapp among officials who work at the authority's headquarters.

In an interview yesterday, Mr. Kalikow, who has been chairman of the authority since 2001, said the salaries of Ms. Lapp and the agency presidents were not based on formal evaluations, but on his ongoing assessment of their work. He added that the officials could easily make far more in the private sector.

"I evaluate them because I work with them every day," he said. "I speak with them three or four times a day sometimes. I speak with them in crisis issues and planning issues. I have a pretty good idea about how they function. I'd put this group of people up against anybody."

Barry Feinstein, a prominent board member who has worked with four chairmen since 1989, said, "I don't have difficulties with wages for that level of executive being established by the chairman of the M.T.A."

But an advocate for transit customers said the raises sent the wrong message to the public.

"The M.T.A. claims that it's doing internal belt-tightening in the face of these budget deficits while it's giving quiet and large salary increases at the same time," said Neysa C. Pranger of the Straphangers Campaign, a project of the New York Public Interest Research Group, which is financed by philanthropic foundations. "It's hard to believe the M.T.A. is living up to its word."

Mr. Kalikow, a real estate developer who does not receive a salary, said the board was not required to formally vote on the pay increases, which are made at the chairman's discretion. The next round of raises could begin in April, when Mr. Reuter's contract is up for renegotiation.

"We don't discuss people's wages, which we think is their own business," Mr. Kalikow said. "We do discuss it officially, on and off the record, with the board members. Nobody is completely unaware of what everybody is making."

Copyright 2004 The New York Times Company