Home MTA Economics TWU members suggest robbing the future to pay for the present

TWU members suggest robbing the future to pay for the present

by Benjamin Kabak

Over the past few years, we’ve seen first-hand the impact unfunded pension obligations can have on municipal economies. Across our state, cities are borrowing from pension plans to pay current pension obligations, and the entire retiree benefits structure is starting to resemble a pyramid scheme.

In essence, then, an organization with obligations to future retirees can choose one of two avenues: They can sacrifice the future to pay off costs now or they can attempt to build for those future obligations while paring down services today. After years of pursuing the first avenue, the MTA appears to be on the second course, but now TWU members looking to reclaim their old jobs (and argue for increased service as well) want the authority to forego fiscal sanity for more money today.

Here’s the TWU’s essential argument: The MTA has recognized that it will one day have $12 billion in retiree benefits and health care costs to pay out, and the agency has begun to set aside some money in a fund for those future obligations. The fund has grown in spurts over the past decade, but it now totals $500 million. The TWU, in a flyer and at MTA Board meeting protests, says the authority should use this money to increase worker salaries and restore service cuts.

Yesterday, Occupy Wall Street representatives and TWU officials railed on the MTA Board for what amounts to a semblance of fiscal responsibility. “The transit workers serve the 99 percent,” Tony Murphy, a member of Occupy for Jobs, said. “It is beyond ludicrous for the M.T.A. to claim a retirees fund as an excuse to deny justice to the transit workers.”

With some TWU members calling for the return of station agents — a dubious idea considering the jump in ridership last year even as station agent staffing levels decreased — union officials toed a hard line. “Enough is enough,” Maurice Jenkins, a TWU Local 100 vice president, said. “Utilize the GASB funds.”

The MTA had other thoughts on the matter. “We are doing everything we can to work with the fragile budget conditions that we have,” MTA Chairman Joseph Lhota said. “Their reference to money that’s squired away to pay for retiree health care—we have a $13.2 billion unfunded liability, of which we have put against it $470 million. It’s nowhere near enough. It’s a problem, and we need to continue to fund the funds so that we can make sure that the retiree benefits are there when the retirees of the MTA need it.”

Another Board member echoed Lhota’s take. “You’re essentially borrowing money that actuarially you’re told that you need to have to protect people’s benefits in the future,” Allen Cappelli said. “So it’s not a fiscally prudent thing to do. It’s the kind of practice that gets government agencies into trouble. And then if you run into a crisis and you don’t have the money, then you’ve got to raise fairs and cut services, and we’re trying to avoid that kind of instability.”

Now, I don’t begrudge the TWU for searching for ways to secure raises for their members; that’s what a good union is supposed to do. But while most unions are willing to sacrifice their future members for the current staff, here, the TWU is concerned with current payments without keeping an eye on what they have coming to them in the future. The MTA is, for worse, saddled with high levels of future obligations thanks to a low retirement age and a generous benefits package. Union members can’t enjoy those luxuries while asking the MTA to tap into a fund to pay those benefits now. If so, the losers will be the fare-paying public who will be saddled with these costs one way or another.

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Bolwerk March 1, 2012 - 1:25 pm

This is the problem with slogans, whether they are “compassionate conservatism” or “I’m part of the 99%.” There is no way you can compress the reasons why we need to radically rethink (and, yes, reduce) the MTA’s workforce to a slogan. It’s a complex issue that includes an array of factors ranging from pensions to operational efficiency to opportunity cost (e.g., pensions v. investment; operating v. capital expense) to modernization and automation to the sheer absurdity of keeping on roles that we no longer need.

Yet the only way our political system can address it is in these dichotomous left v. right, us v. them, Demokrats v. Republikans simplifications.

oscar March 1, 2012 - 1:31 pm

The TWU never ceases to amaze me

yes, Maurice Jenkins, “enough is enough”

Nathanael March 1, 2012 - 5:23 pm

The TWU is actually asking the MTA to cheat *the TWU’s own retirees*.

This feeble excuse for a union needs to be euthanized. Transit workers deserve a real union.

Larry Littlefield March 1, 2012 - 1:56 pm

“The TWU, in a flyer and at MTA Board meeting protests, says the authority should use this money to increase worker salaries and restore service cuts.”

Take all the money and spend it next year for an expense that goes on and on forever?

This is all PR. The just don’t want to admit that it isn’t the 99 percent. It is the 95 percent being ripped off by the 1 percent who control the federal government, and the 4 percent who control state and local government, including them.

They got wage increases at double the inflation rate, managers got nothing, riders got service cuts and fare increases. I just wish they would be honest and say “screw all of you, and your children, and OUR children.”

Nathanael March 1, 2012 - 5:31 pm

They’re actually asking the MTA to loot their own pension fund.

This is a new level of stupid. If they get their wish, it will be remembered later, and the state legislature will quietly not pay their pensions. If they complain, it will be pointed out that the TWU *asked* for the pension fund to be looted, so nobody will be sympathetic at that time.

I find it mind-boggling that a union is campaigning to loot *its own pension fund*. The UAW would never be *THAT* stupid.

Larry Littlefield March 1, 2012 - 5:54 pm

The probably figure that even if we get no services, the retirees will get paid, even if no one is willing to pay taxes in exchange for nothing and they have to send around goon squads to beat the money out of us.

That might very well be true for the tax free municipal debt held by the one percent, and the tax free pensions of the five percent.

But if the MTA goes Chapter 9, which I wouldn’t write off, that $500 million may be the only retiree health insurance funding available. They should be fighting to keep it (unlike what happened with the City of New York) not fighting to loot it!

HeezaHowza March 7, 2012 - 1:29 pm

They idea is to grab what they can, while they can. The future benefits/retirees are to be somebody else’s problem, and that somebody will be the public who will likely be forced to go to the hip for any shortfalls. Really, the only arguments against trying to loot that money are decency and responsibility…so, yeah, good luck…

nycpat March 1, 2012 - 2:26 pm

What a headline. Fair and balanced.

VLM March 1, 2012 - 2:55 pm

Typical. Don’t like the rational and obvious message? Character-assassinate the messenger instead. That’s always the sign of a weak argument.

Anyway, who said anything about fair and balanced? It’s a blog, not a damn newspaper.

nycpat March 1, 2012 - 5:20 pm


Bolwerk March 2, 2012 - 10:55 am

There is no character assassination here. You can feel free to disagree with the characterization of the TWU’s actions as “robbing,” but there is no doubt they are taking now for the future to pay back later – and consequently guaranteeing fewer resources for the future. (Of course, why they are entitled to compensation they don’t strictly need while the future is not entitled to transportation service it will need is beyond me. Borrow and spend can’t go on forever.)

And, indeed, there is no obligation to be fair and balanced. Just be intellectually honest.

ScottC March 1, 2012 - 2:37 pm

If the TWU, and other municipal unions, want to be paid like private sector workers performing the same tasks, increase their salaries, discontinue the pensions and replace them with 401Ks, make them pay for most of their health insurance, make them work until social security retirement age or longer since their 401Ks will likely not be enough to provide for them in retirement. Make them subject to layoffs whenever management decides, and work for years without pay increases. Oh, and decrease the amount of vacation and holidays they get.

Al D March 1, 2012 - 3:49 pm

And if I can add 1 more to your otherwise all inclusive and spot on post…If you are a train cleaner and are directed to clean the station, then you will do it. In other words, and within reason, you will do as directed by management and no longer hide behind work rule

Nathanael March 1, 2012 - 5:24 pm

The TWU is actually asking to have its pension fund eliminated, which would definitely make it more like the private sector. Read the blog article!

I think the TWU leadership is *actually demented*, but they are actually asking for this.

sharon March 1, 2012 - 8:01 pm

The only problem with your comment is that TWU 100 gets PAID more then the private sector doing the same job ALOT MORE.
More in take home cash
And Way more in health and pension cost

What the idiot union leaders don’t tell there loyal followers is that all of them pay way more in taxes both direct and indirect. For whatever raise they get, the new tax burden eats it all up. The rent you pay has a few hundred of pass through taxes each month

Pete March 2, 2012 - 8:16 am

Actually most TWU titles recieve less pay than the private sector workers in similar work. The 7,000 plus people in Maintenance of Way recieve substantially less pay than the private contractors working in the same subway system. Metro-North and Long Island get more per hour in every similar title.

John-2 March 1, 2012 - 2:38 pm

This harkens back to the halcyon days of the Lindsay Administration’s “fun with figures” budget shenanigans, where it order to meet the payments in the current fiscal year and give the UFT their teacher contract raises, the city simply decided for budgetary purposes, the year for city revenues now had 368 days.

The extra days income was used to make up the difference for the extra outflow due to the pay increases, with the promise that the money would be recouped later, even though the following fiscal year now only contained 362 revenue days. That genius maneuver eventually required Hugh Carey to call in Felix Rohatyn to straighten out a decade later; perhaps Lhota should invite Rohatyn to the bargaining table now to explain to the TWU why borrowing tomorrow’s pension revenues to pay for today’s salary increases is a not-so-hot idea.

Chris March 1, 2012 - 3:04 pm

If fare increases or service cuts were on the table and the Straphangers demanded some extra borrowing to keep them at bay, I doubt Ben’s headline would say “Riders suggest robbing future to pay for the present.”

The TWU wants to borrow to pay for more benefits today, riders wants to borrow to pay for cheaper fares today, infrastructure advocates want to borrow to expand service. The one thing they all agree is not on the table, is fiscal responsibility.

Benjamin Kabak March 1, 2012 - 3:23 pm

To be fair (to myself), the Straphangers and other MTA Board members have suggested similar arrangements with regards to service restorations, and I’ve been opposed to those too. The MTA is a point where economic stability and long-term planning have to be more important or else they’re going to be saddled with too much debt and no way to pay it off.

Larry Littlefield March 1, 2012 - 3:42 pm

I started blasting the Straphangers for being in favor of selling out the future in the early 2000s, when they were using the “two sets of books” line to oppose fare increases.

Same deal. They weren’t representing riders. They were representing present (now past) riders against future (now present) riders.

The MTA debts, run up to cut state taxes and shift spending to other priorities, are the same deal as well.

Al D March 1, 2012 - 3:53 pm

Since you put it this way…should we really be concerned with the long term viability of a wholly dysfunctional, wasteful and non responsive agency? Perhaps it should be permitted to go belly up because that would give lawmakers the excuse they need for a ‘do over’ in terms of wholly restructuring how transit is delivered in this region?

Al D March 1, 2012 - 3:57 pm

coincidentally, just found this…


Nathanael March 1, 2012 - 5:27 pm

Only if we have a decent alternative agency waiting in the wings.

I don’t want the gerrymandered and corrupt Republican State Senate designing a “do over” agency. I don’t want the incompetent and out of touch Mayor Bloomberg designing one either. I don’t particularly trust the governor or the Assembly either.

In other words, in order to do what you suggest, we have to *fix state government first*. (Or at least fix city government and hand it all to the city, which would probably work too.) Care to get working on that? We have the most dysfunctional state legislature in the nation, you know, according to objective studies!

sharon March 1, 2012 - 8:08 pm

It;s not the agency its the management. Walder got run out of town because he was making the needed changes to reduce operating costs
Renegotiating with contractors in down economy, what a concept
Fast track to cut down on repair costs
Inter lining buses, telling Nassau county pay up or move on
Bus time will cut bus operating cost way more then the public realizes. It will end the many bus bunching issues that some drivers casuse for extra overtime
And this idea that more money will solve the problem. Less money makes you make the tough choice.

Why do we still have two man train crews?
Why don’t we have a real fare enforcement strategy ?
Why do we run empty express buses in circles within walking distance of train lines?
Why do we keep depots with one or two run open on weekends that could be run out of other depot

Nathanael March 11, 2012 - 10:16 pm

Walder was pretty damn cool.

nycpat March 1, 2012 - 7:01 pm

wholly dysfunctional?

Al D March 2, 2012 - 12:56 pm


nycpat March 2, 2012 - 2:49 pm

Jeez, I thought millions of people got to their destinations every day. But you say not.

Alon Levy March 4, 2012 - 10:07 pm

Greater Sydney transit mode share: 26%
Greater New York transit mode share: 27%*
Greater Paris transit mode share: 42%
Greater Tokyo transit mode share: 60%

*If you’ve seen higher numbers, they do not include suburbs in Connecticut, the mid-Hudson Valley, and Mercer County, New Jersey.

Bolwerk March 2, 2012 - 12:08 pm

One obvious reform is to put management of pensions/healthcare into a different agency. The TWU could deal with the MTA on the salary/wage issue, and can duke it other with this other agency for pension matters. At least in some ways, it’s not a hard choice politically, since fares already don’t cover service.

Like Larry says, the TWU is in the benefits business. It should be in the transportation business.

Bolwerk March 2, 2012 - 11:52 am

These are not the same things. The only fiscally responsible borrowing is on infrastructure, which is for the future. Operations should be covered by fares, or at least existing revenue streams and, if necessary, legislative earmarks.

As for Straphangers, well….

Al D March 1, 2012 - 3:45 pm

As you say, the union is probably just trying to do its job for its current members, but do they know how far outside of the modern day reality that they sound? These days, workers give back benefits, increase retirement ages, take pay cuts, share more of the health care coss just to keep their jobs. Some of these people probably even ride the subway or take the bus.

The union may represent their members, but no one else including the riders.

Alex March 1, 2012 - 4:31 pm

I just love the “every other worker has done this, so you should too” argument. And you know who loves it even more? Every CEO, including Lhota, on the planet.

By this argument, if workers somewhere could be “convinced” to work for free, standing in garbage, for 12 hours a day, then every worker everywhere would have no leg to stand on when it comes to demanding better wages, working conditions or hours.

It’s like the labor movement never happened.

Yes, the MTA leadership is corrupt and isn’t worth a damn, but are we really going to rely on BOSSES to do what’s right for workers? I trust the rank and file of the TWU more.

William K March 1, 2012 - 4:54 pm

But isn’t that the same argument that got the TWU 11% in 2009? The arbitrator ruled that the raises were in line with what other public employee unions recently got, despite the economic downturn.

You can’t say that it’s fair when it works for you and it’s unfair when it works against you.

nycpat March 1, 2012 - 5:16 pm

Our bosses at the MTA do all the time. They held up the arbitration award in court as long as possible.

sharon March 1, 2012 - 8:13 pm

But your salary is more then the market rate and should be based on what the agency can afford.

You benefits package is worth $30 an hour over your cash salary.

NO ONE GOT RAISES since 2008 let alone the 11% you already got.

You are being greedy

Lets not forget the criminal work rules that don’t serve the needs of the agency and riders.

Your greed is making people poor as entry level and back office jobs move out of state

Cleaners making $24 an hour cash and $25 a hour benefits is criminal.

Wake up to the real world

nycpat March 1, 2012 - 10:00 pm

We are not criminals. We make what we make because we are organized and united, not from any kindness from our bosses. If it were simple to replace us I have no doubt we would be replaced. It’s not so simple.
Also the people that replace us would want the same things we have fought for.

How much should people be paid to dodge rats and clean up feces and vomit underground for 40 hours a week? And deal with emotionally disturbed “customers”? I’d rather work in 32b in an office building for that kind of work.

Nathanael March 11, 2012 - 10:28 pm

The people that replace you would not demand unnecessary station agents or conductors.

They would also not call for looting their own pension fund.

Sure, of course they’d demand good wages. And as long as we don’t have a sane health care system, they’d demand health care benefits. And they’d call for good pensions.

But they wouldn’t call for featherbedding or idiocy.

Pete March 2, 2012 - 8:23 am

What are all these criminal work rules that you are talking about? The need for flagging on the tracks while fixing a broken signal under train traffic with power on? You wouldn’t last 30 seconds without these safety rules on the tracks. We have 8 and 10 car trains with curved platforms, where else in the world are they running these conductorless trains with more than 6 cars and nice flat straight platforms?

Nathanael March 11, 2012 - 10:24 pm

They are running conductorless trains with curved platforms and very long trains in London. Next question?

Subway trains do not need conductors. If there is a general safety problem, they need (rather than conductors) transit police. If there is a technical visibility problem, they need a station attendant.

And what do you know — this is exactly what London does! Go figure.

Of course, the laid-off conductors should be offered retraining in those other positions. Or motorman jobs driving additional trains (because the subway should be expanding, right?)

Al D March 2, 2012 - 12:58 pm

that’s dysfunctional, trying to negate a contract that was agreed to (under no duress whatsoever)

JimD March 1, 2012 - 10:08 pm

The TWU leadership isn’t stupid – they know that even if they get what they want now and the MTA pension fund goes to hell, they will still get their pensions anyways since some court will rule in their favor and force the state to pay out even if service is cut 90 percent.

Nathanael March 11, 2012 - 10:25 pm

No. The state can’t be forced to pay pensions at all, actually; it’s something called “sovereign immunity”. Tick off the state legislature enough, and the TWU will be at the mercy of the Pension Benefit Guaranty Corporation.

nycpat March 1, 2012 - 10:12 pm

So in sum; transit workers are criminals and thugs who are bent on robbing society, little better than welfare cheats. All problems can be solved if only we could get a new more pliant workforce.
Of course all savings would be used to make your commute more pleasant.

Charles Gordon March 1, 2012 - 11:05 pm

While not a “union” guy, I have an immense amount of respect for the work transportation workers do, especially those who spend a lifetime on the tracks and fighting rats and whatnot. You more than earn the generous benefits and pension that you get. It’s not criminal to earn that, it’s hard work.

BUT, It’s the sense of entitlement that inevitably comes with the groupthink of a union that gets under the skin of the general public. My guess (hope) is that most TWU members, like the rest of the us, are happy just to have a job in this economic climate. But if the some of the brothers and sisters say we should raid the pension fund, who am I to argue?

Common sense tends to get overlooked with a mob mentality.

Nathanael March 11, 2012 - 10:26 pm

The groupthink doesn’t seem to be totally inevitable, but it sure does seem to have set in at the NY local of the TWU.

Seriously, advocating LOOTING YOUR OWN PENSIONS?!?

Jonathan Beatrice June 12, 2012 - 12:47 am

Maybe you should do some research before writing something for the world to see. The MTA’s GASb fund is money that was put aside in case they need it for retirees, or at least that’s what the MTA claims. They later found the $600 million wasn’t required to pay for retiree health benefits. They already had enough. NYC had a similar fund available and, similarly, found that they didn’t need to spend it and spent it on other budgetary items.


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