Unused sick time among Massachusetts Bay Transportation Authority employees amounts to a perk of up to $49 million as of Dec. 31, 2014, according to a report by the Pioneer Institute.
"The perk resulted in the addition of tens of millions to the T's pension liability and a strong incentive for staff not to use sick days for time absent from work," wrote Mary Connaughton, the director of government transparency and director of finance and administration for the free-market-oriented think tank.
The report said MBTA employees banked 380,155 sick days as of the end of 2014. One employee had stockpiled 407 sick days.
A 1975 arbitrators' decision granted members of the Carmen's Union the perk, which added unused sick leave to creditable service for purposes of calculating pension payouts, a practice that expanded to all MBTA staff.
"It is another example of the burden of binding arbitration, which weakens MBTA management's hands when negotiating with its 30 unions," said MBTA chief administrator Brian Shortsleeve.
The authority is under a fiscal control board after record snowfall ground some of its operations to a halt last winter. Meanwhile, the Massachusetts Department of Transportation, which oversees the MBTA, may truncate or even cancel its 4.5-mile extension of the light-rail Green Line amid cost overruns.
Gov. Charlie Baker last year proposed eliminating binding arbitration at the MBTA – which locals call the "T" -- among a series of reforms that followed a crippling winter. The move, however, died in the state legislature.
Unlike T employees, most state workers are compensated for 20% of their unused sick time at their current pay rate upon retirement.
According to the report, if an MBTA employee's salary averages $81,000 over its three years of highest pay and a state employee retires at $82,000 -- both have 150 unused sick days – the benefits are $28,739 and $9,462, respectively.
Shortsleeve said the MBTA this month implemented a new attendance policy that requires workers to use paid sick days and vacation time concurrently with Family and Medical Leave Act absences. "It's management's expectation that this practice will result in employee's having less unused sick time upon retirement," he said.
"Initial data indicates the new attendance policy is having an early impact," said Shortsleeve. "For the first three weeks of this year, overtime spending has decreased, absenteeism rates have declined, and the number of dropped bus trips is down."
Standard & Poor's in September lowered its rating on the MBTA's $3.7 billion parity sales tax bonds outstanding to AA-plus from AAA, saying the authority's potential capital needs could result in "substantial additional bonding."
Moody's rates the MBTA bonds Aa2.