Home Asides Lhota: Pensions, health care costs fueling fare hike

Lhota: Pensions, health care costs fueling fare hike

by Benjamin Kabak

As the TWU and MTA continue to operate without a contract, authority chairman Joseph Lhota took aim at benefits costs yesterday during a hearing with the New York State Senate Transportation Committee. As Pete Donohue recounts, Lhota noted that these costs are “spiral[ling] out of control.” He said, “In fact, but for mandated increases in pension and health care costs, we would not need the 2013 fare increase,” Lhota said.

In response, TWU President John Samuelsen blamed the MTA’s “mismanagement of construction projects,” but mismanagement here isn’t the right word. Perhaps mis-funding is as debt costs have increased the MTA’s operations obligations to the detriment of investment in subway service. Either way the fares are going up 7.5 percent next year.

The truth of course is in the middle. The MTA has turned into an organization funding pension and health care costs for retired workers for years, and these obligations have exerted a tremendous pressure on the operating budget. No one in Albany seems to willing to confront this issue however and the costs continue to mount.

You may also like


Anon June 6, 2012 - 6:55 pm

couldn’t have anything to do with 4 years no raises (i.e. the start of 5th year no raises) for managers could it?

Ramiro June 6, 2012 - 7:06 pm

I am very disppointed in the Governor, who has touted himself as someone who will make the hard choices, has yet to make any commitment on restructuring the MTA’s pension and debt structure.

This is such a lost opportunity.

Bolwerk June 7, 2012 - 1:48 pm

You think it’s easy choosing between your politically appointed buddies at the authority and its contractors and the union? Luckily, sending the bill to the riders is no big deal because we don’t have much if any say.

Larry Littlefield June 6, 2012 - 8:08 pm

Actually, part of the increase in construction costs is due to pensions, and no one is talking about it.

Basically the unionized construction companies are part of multi-employer pension plans, which allow workers to shift between companies and benefits to be paid if an individual firm goes under. Sounds like a good plan, right?

But in the 1990s stock market boom, construction companies cut back on contributions (as in New Jersey) and cut deals with the unions to retroactively enhance pensions (as everywhere).

The government is a monopoly, and the MTA can force farepayers/taxpayers to accept paying more for less. Not so the unionized construction companies. Soaring pension costs mean a soaring gap between the cost of union construction and non-union construction. Anytime a union construction company goes under, others have to pick up the tab.

Former Pennsylvania Governor Ed Rendell proposed a bailout, but it didn’t go anywhere. So the unionized construction companies are raping anyone using union labor to stay alive. Ie. the MTA.

Obviously, no one has an incentive to talk about this. Not the unionized construction companies and unions who cut the deals, to benefit those who cashed in and moved to Florida. Not the politicians. But there it is. When the TWU says construction contractors are overpaid, they are talking about other unions. And not the workers, the retired.

Al D June 7, 2012 - 9:12 am

Higher fare, less service. For how much longer can this non-sense continue and Gotham still function?

Hank June 8, 2012 - 12:08 pm

How many years do you have to work for the MTA before the full-pension and cadillac healthcare benefits accrue for life?

nycpat June 8, 2012 - 1:34 pm

Don’t believe all the propaganda. At NYCT I pay 1.5% of gross wages plus an additional $12 a week plus $15 co-pay for mediocre insurance. MTA has many different divisions with different plans. I would say the largest is TWU/NYCT which is a NYCERS tier IV plan.

Nick June 11, 2012 - 5:39 pm

Agreement employees have to work for 30 years to collect a 60% pension, and the only lifetime medical goes to Management. Why is nobody talking about Managements pension costs???


Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy