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State budget shakes unions

Allows privatization for 3 years at MBTA

Commuters at North Station waited as an Orange Line train pulled in last April.Bill Greene/Globe staff

Lawmakers on Wednesday approved a $38.1 billion budget that included a significant defeat for organized labor — a measure temporarily clearing the way for greater privatization of services at the MBTA.

The move put a small but significant crack in a decades-old measure known as the Pacheco law, which created hurdles to outsourcing services to non-union workers.

Coming after a string of high-profile union victories in the Democrat-controlled Legislature, the blow to one of labor’s most treasured protections has raised a sharp question on Beacon Hill: How did this happen?

The primary driver of the shift, observers agree, is the crisis that has engulfed the Massachusetts Bay Transportation Authority since a series of winter storms crippled the agency. But union leaders and lawmakers point to other factors, too: a media narrative that framed the Pacheco law, fairly or not, as an “anti-privatization” measure; a popular governor pushing for more outsourcing; and parliamentary maneuvers that cleared the way.

“I’m outraged,” said Steve Tolman, president of the Massachusetts AFL-CIO, who had trouble sleeping Tuesday night when he learned where the Legislature was headed. “I tossed and turned, I was literally out on the couch.”


The law, which takes its name from its primary sponsor, Senator Marc Pacheco of Taunton, dates to 1993 and requires officials to prove that outsourcing a service would be cheaper than allowing public employees, who are often unionized, to provide it in “the most cost-efficient” manner possible.

The legislation approved Wednesday frees the T of Pacheco restrictions for three years. Governor Charlie Baker has pledged to make judicious use of his new powers — perhaps privatizing late-night bus service, which draws small numbers of riders, or hiring ticket takers on the commuter rail to clamp down on fare evasion.

Labor leaders say they are concerned about broader privatization and the loss of union jobs. “I hope he’s a man of his word,” James M. O’Brien, president of the Boston Carmen’s Union said Wednesday.


A special panel appointed by Baker to dig into the T’s woes recommended eliminating the Pacheco strictures in an early-April report. A week later, House leaders called for a five-year moratorium.

The move signaled that House Speaker Robert A. DeLeo would be an important Baker ally in his push to overhaul the MBTA. But it was not yet clear that the pair would prevail.

Senate President Stanley C. Rosenberg, the other member of Beacon Hill’s “Big Three,” told reporters in April that the Pacheco law had long been a “political target” for conservatives and suggested that critics were taking advantage of the T crisis to weaken it.

“There’s an ideological-slash-political component to this,” he said. “We ought to be driving policy based on outcomes and data and how things actually work.”

Rosenberg noted the state auditor had approved most attempts to outsource public services since the law passed.

Pacheco, meanwhile, was making a forceful case of his own — holding a briefing for legislators, complete with briefing book, and counting votes.

Senators and aides said, privately, that it was difficult to cross a colleague advocating so strongly for the preservation of his signature bill.

But the pressure to exempt the T was mounting. Editorials were calling for change. And news articles were referring to the Pacheco law as an “anti-privatization” measure, much to Pacheco’s frustration.


“I don’t know how you call something anti-privatization when 80 percent of the time it has been tested, it’s allowed privatization,” he said Wednesday. “But that’s the narrative that a lot of you guys in the mainstream press are using.”

Pacheco refers to the law, instead, as the Taxpayer Protection Act — a term that Greg Sullivan of the conservative-leaning Pioneer Institute refers to as Orwellian.

Sullivan and Pioneer offered steady criticism of the Pacheco law through the spring and summer, culminating in a thick report issued this week claiming that its restrictions had cost the T hundreds of millions of dollars over the years.

A national transit union went after Pioneer in a radio advertisement, calling the organization “shark privatizers.” And the Boston Carmen’s Union spent hundreds of thousands of dollars on radio spots of its own.

But the ads, notably, praised Baker — a tacit acknowledgment that the chief proponent of change was soaring in the polls and could not be directly attacked.

If labor was going to prevail, it would have to win in the Legislature. But that was proving to be difficult.

One lawmaker told the Globe Wednesday that the push for a Pacheco rollback had already built up substantial momentum by the time the unions fully engaged. And House leaders’ decision to attach their proposed five-year moratorium to the must-pass budget made approval easier.

Rank-and-file legislators who might have trouble bucking labor on an up-or-down vote on changes to the Pacheco law could argue that derailing a $38.1 billion budget over the issue wasn’t an option.


After the House approved the moratorium, the proposal landed in budget negotiations between House and Senate negotiators. There, the five-year rollback was trimmed backed to three in a compromise and a final budget was released to the full Legislature.

On Wednesday afternoon, several senators expressed regret about the Pacheco changes in floor speeches. But the budget, in the end, passed unanimously.

David Scharfenberg can be reached at david.scharfenberg Follow him on Twitter @dscharfGlobe