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New York Post

 

It's The Labor Costs

April 02, 2009

By Nicole Gelinas

Albany Ignoring Key MTA Woe

AN exasperated Gov. Pater son yesterday told the Senate to "sit down" and "at least" come up with a "financially sound" plan to bail out the MTA -- as, he said, the Assembly has done.

The problem is, though, that none of these plans is really sound.

Yes, the Assembly plan would give the MTA some of what it desperately needs. Its billion-dollar-plus payroll tax (which Senate Democrats are refusing to vote for) provides a permanent new source of money to help plug the agency's catastrophic budget gaps and to fund some (although not enough) capital spending.

But it does so by creating a new tax on jobs -- making New York's economy less competitive. What's really needed is cuts in state spending to give the MTA money from a tax that already exists.

And nobody in Albany is talking about a vital part of the picture: Fixing the MTA's costs -- especially the runaway costs of pensions and other benefits not available in the rest of the economy anymore.

On this front, Senate Majority Leader Malcolm Smith and Sen. Bill Perkins have a real chance to put the MTA on a truly solid footing -- and courageously stick up for their subway-riding constituents.

It's pure social justice: Minimum-wage private-sector workers will soon face much longer and more expensive commutes because the MTA has to spend billions on guaranteed benefits for city subway and bus workers. People spending their lives working their way up in the world are getting socked for MTA employees who can retire at age 55.

Those rising benefits costs for Transport Workers Union members are a direct cause of service cuts (and, eventually, of deterioration of subways and buses).

As Moody's pointed out last week, one of the MTA's biggest problems is "growth in uncontrollable expenses, such as pension-fund contributions." Together with health benefits, these costs will rise by more than $600 million in 3½ years' time -- far more than the MTA will save from the service cuts that the agency's top people call "draconian" and "horrific."

Moreover, while the MTA can't change health benefits without first bargaining with the union, it doesn't need such talks to win higher required contributions for workers and higher retirement ages for new workers. The Legislature merely needs to pass a law fixing pensions for new workers (it can do it at the same time it passes its bailout plan), and that's that.

Of course, that requires our politicians to stand up for what's right and reasonable. If the city's unions see a solid wall of such support, they'll accept it.

No, the MTA wouldn't see huge savings right away. But relief from future pension costs would give it the flexibility to deal with its other labor issues when this crisis is over. It would have more money, for example, to offer raises or bonuses in exchange for workers' giving up inefficient union work rules.

It's not just the pols who need to show a little nerve. It would be nice if some of the city's self-styled "transit advocates" -- like Gene Russianoff of the Straphangers Campaign -- would even mention the MTA's out-of-control labor costs as a huge barrier to New Yorkers getting the transit they need.

A big reason that New Yorkers don't readily support more money for the MTA -- and thus for a better system and a better economy -- is that they're suspicious that new money will just go toward benefits that they don't get.

There's a good reason for that suspicion. Right now, state arbitrators are deciding raises for the transit union's next contract -- and they could award higher raises if they see that the authority has more money to pay for them.

In short, there's some good news in Albany's failure to agree on any MTA bailout: It means the moment isn't past to do something about some big labor costs.

Original Source: http://www.nypost.com/seven/04022009/postopinion/opedcolumnists/its_the_labor_costs_162469.htm

 

 
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