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### Authority to Cut Bonuses

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NEWYORK 

# PortAuthoritytoCutBonuses By TED MANN Updated March 29, 201212:01 a.m. ET

The PortAuthority of New York and New Jersey plans to eliminate millions ofdollars' worth ofbonuses and other benefits for its nonunion employees, a gesture of reform at an agency under pressure from two politically ambitious governors to rein in spending. The move is expected to save $41 million overthe next 18 months. It also marks an initial attemptto change the image ofan agency long perceived as wasteful and disorganized. Under the authority plan, which is expected to be approved by the Board ofCommissioners on Thursday, nonunion employees at the bistate agency will have to contribute to the cost of their health-care premiums for the first time. They alsowill lose a host of"add-ons"-including bonuses for longevity and good attendance-that have long boosted the salaries ofeven highly paid executives. And they will no longer be able to cash in unused vacation time in an effortto increase pension payouts. "Is it a signal to people within the agency? Absolutely. Is it a signal to people in the region? Absolutely. But it's also notjust a signal. It's very real," one high-ranking agency official said. The effort comes after a recent audit-ordered by NewYork Gov. Andrew Cuomo and New Jersey Gov. Chris Christie-branded the agency's previous management as "dysfunctional" and sharply criticized the agency's organization, including its compensation structures. The agency's pay levels have been a sore spot. PortAuthority Chairman David Samson directed the authority to begin publishing the agency's full salary information on its website lastyear after an investigation by the Bergen Record into the perks and benefits that many managers enjoyed. The Record also highlighted dozens ofcases ofalleged political patronagewithin the agency's ranks. "It's certainly an encouraging sign thatthey are undertaking this on their own," said New Jersey Assemblyman John Wisniewski, the Democratic chairman ofthe Transportation Committee and a frequent authority critic.



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### Port Authority to Cut Bonuses

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"It certainly does not mean thatthere isn't more to look at and more that can be improved," Mr. Wisniewski said. "It's going to be an ongoing effortto change the culture ofthe Port Authority on behalfofthe people who pay for it." The changes in health-care contributions will affect most ofthe agency's 2,250 nonunion employees. Workers hired after 2005 already cover some ofthe costs oftheir premiums. Employee contributions begin next month and will be phased in overfour years, with the highest-paid workers eventually paying 35% oftheir premiums by 2015. Extending the reach to the agency's rank-and-file, the board is also expected to approve a resolution thatwould seek to make health-care contributions mandatory for its 4,500 union workers, similarto what is required ofmany public-sectorworkers in NewYork and New Jersey. But those payments would have to be negotiated with union leaders in future contracttalks. Paul Nunziato, president ofthe Port Authority Police BenevolentAssociation, declined to comment. A woman who answered the phone at Transit Workers Local 1400, which represents some authority workers, said union leaders weren't available. Hundreds ofnonunion employeeswill be affected by the other changes. The disappearing benefits include the right to cash in vacation days and use the resulting bump in pay to pad future pension calculations; a "longevity bonus" phased in afterthe Sept. 11, 2001, terrorist attacks to retain staffworkers; and a small cash paymentthat has been paid for decades to employees who first accepted it in lieu ofa salary increase in 1969. Some ofthe perks affect relatively small numbers ofemployees but are the type that can irritate taxpayers and drivers asked to pay highertolls. Twenty-two high-ranking officers in the Port Authority police department, for instance, can earn "cumulative retirement days" for good attendance. That bonus will be eliminated. Officials argued that the cumulative value ofthe cuts is meaningful for a $7 billion agency thatfaces immense construction projects-from completing the World Trade Center reconstruction to raising the height ofthe Bayonne Bridge-amid little political appetite for raising new revenue through tolls or fare hikes. The authority is following a directive from Messrs. Christie and Cuomo to find "efficient, yet equitable, revisions to compensation and benefit standards so as to bring them in line with appropriate public employee levels," Mr. Samson said. Mr. Samson indicated the authority planned additional, similar measures. Some ofthe other perks the leadership now seeks to strip away are small-bore. Butthey hint atthe ways in which PortAuthority compensation has seemed to hover above even the levels ofother public agencies in the region.



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### PmtAuthority to Cut Bonuses- WSJ Page 3 of3
The Port Authority will also cut out mostofthe free PATH rail passes used by staffworkers, family members and retirees next month. In addition, the agency will end the so-called death gamble, a benefit extended in 2001 to employees hired before July 1973, intended to match the value ofsupplemental life insurance, dissuading them from retiring.
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