Home Asides MTA/TWU contract announcement raises more questions than it answers

MTA/TWU contract announcement raises more questions than it answers

by Benjamin Kabak

Gov. Andrew Cuomo, MTA CEO and Chairman Tom Prendergast and TWU Local 100 President John Samuelson just wrapped up a press conference during which the MTA and TWU announced a tentative agreement on a new labor deal. It’s a five-year deal with raises in all five years — 1 percent retroactively for the first two and 2 percent for each of the last three years. There are no work rule reforms, but TWU healthcare contributions will increase from 1.5 percent to 2 percent. And the MTA does not expect this deal to impact its planned fare hikes or razor-thin operations margins in the out-years in its financial plan. You may be wondering how; I know I am.

We don’t yet have any of the details behind the math, but estimates are that this deal could add around $150-$200 million per year to the MTA’s operations budget. The MTA has continually noted that need to secure net-zero wage increases in order to avoid jeopardizing its capital plan, but this deal contains none of that. So where does that leave us? It leaves me concerned that the riders will bear the brunt of the costs either through more deferred maintenance, no real capital expansion plans, higher fare hikes down the road, service cuts or a combination of everything. I hope I’m wrong, but this is an election year we’re in. These are the transit politics coming from up high in Albany.

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Rahul April 17, 2014 - 3:32 pm

I do believe you have the right take here. If it isnt going to effect the plan, that means it will use money that has been socked away, that money is the funds committed to capital. The MTA has budgeted enough in that figure. Of course, that leaves the plan itself to be funded. Maybe once the election is over, we can start to figure out how the state might increase support, but until then the guess is that riders WILL bear the brunt from any of the potential ways to reduce costs or increase revenue.

Rahul April 17, 2014 - 3:37 pm

One more note: the MTA had budgeted for wage increases equivalent to inflation after the three years were up. Given that, some of the funds are budgeted for, especially with 2s in the outyears as opposed to upfront.

Larry Littlefield April 17, 2014 - 3:52 pm

“The MTA does not expect this deal to impact its planned fare hikes or razor-thin operations margins in the out-years in its financial plan. You may be wondering how; I know I am.”

That depends on how much tax revenues go up. Which depends in large part on how much pay for everyone else goes up. If everyone else gets more, tax revenues go up, and RELATIVE pay stays the same.

There is a discussion of that in this post.


We have faced higher taxes and service cuts because public employee wages and benefits have gone up more than the wages and benefits of everyone else. In bubble years revenues from Wall Street can cover that up. In bad years, not so much.

In three years, we’ll either be able to say the unions cheated us of did not. They have cheated us over the past decade, due mostly to the retroactive pension increases.

And while they will talk about other things, if we become worse off in the next three years (or the years after, because increases granted remain in perpetuity) then they have cheated us. Will those signing the agreement on the other side admit this? We’ll see.

Patrick O'Hara April 17, 2014 - 4:21 pm

This does not bode well for the LIRR union negotiations. The MTA looks like they caved in with the TWU, and the LIRR’s unions will be expecting them to do the same.

It’s a shame, too, considering the MTA had a much bigger chance of busting up some of those nasty work rules, among other things. Now, I don’t know how easily that will go. The LIRR needs to get those unions in order before East Side Access hits, and even though the timeline for that project seems open-ended as of late, they are running out of opportunities to get that done.

Larry Littlefield April 17, 2014 - 9:14 pm

That data says: the LIRR should be getting a much different deal than the TWU.

Were it up to me, I would have dealt with the LIRR and UFT (they of the massive 2008 pension increase) before anyone else. So based on the deals for anyone else, they could not claim a pattern.

But we’ll see. I won’t want to hear about extraneous issues if the rest of us are made worse off.

Patrick O'Hara April 18, 2014 - 3:56 am

I would have too. The MTA had a much better chance of getting their net-zeros and work rule reform with the LIRR’s unions, for a variety of reasons, and from there they could use that deal as “the measuring rod” to apply to all of the other unions.

We will have to see how this goes.

Larry Littlefield April 19, 2014 - 9:11 am

It isn’t fair to use the worst as a measuring rod for the rest, nor the reverse. The pattern needs to be broken. We have to deal with:

1) The cost of all those pension deals for NYC teachers, and the fact that those who got the deals are paid the same as those newer teachers who did not. Directing higher cash pay to those with less generous pensions and more difficult assignments generally.

2) The huge number of police officers.

3) The huge cost of police and fire pensions, and assumptions about the percent disabled.

4) The LIRR, practically a mafia at this point.

5) Overstaffing in the schools in the suburbs.

6) The MTA and other infrastructure contractors.

If they don’t do anything about any of those things, they should be blamed as a group rather than be allowed to point fingers in a circle. Wall Street pay, profits and stock prices falling back to something like reasonable is NOT a valid excuse.

Nathanael April 20, 2014 - 10:26 am

Frankly, the work rule situation is much better at NYC Subway (the TWU) than it is at LIRR (BLET/UTU). The featherbedded LIRR workers also get paid more.

If the LIRR work rules can be brought significantly closer to the TWU work rules, it would be huge progress.

Nathanael April 20, 2014 - 10:32 am

I can hope that the MTA will have the sense to take a hard line on the completely insane LIRR unions. (As noted, the work rules on the LIRR are totally abusive to the management. http://www.thelirrtoday.com/20.....rting.html ) Let the LIRR unions strike. Better yet, replace them with scabs.

Unfortunately, Cuomo will probably instruct the MTA to pay off the nasty, lazy, featherbedding LIRR unions, because the LIRR serves an area which votes consistently Republican — and Cuomo has consistently helped out Republican elected officials. This is insane behavior on Cuomo’s part, but it’s what he’s been doing.

Bolwerk April 20, 2014 - 12:24 pm

Seems there is plenty of room to find more efficiency in NYCTA too. The subway seems fairly well-managed as MTA units go, but NYCTA buses have extremely high vehicle revenue-hour costs. NYCTA Bus was $26.30/hr in 2012, Nassau’s bus was $12.59. Hard to believe that’s just traffic congestion.

Bolwerk April 20, 2014 - 12:25 pm

Typo: that was supposed to be revenue-mile, not revenue-hour.

aestrivex April 17, 2014 - 4:39 pm

Welp so much for net zero wage increases.

LLQBTT April 18, 2014 - 8:53 am

Gov. Cuomo is the real head of the MTA. Prendergast is there just to maintain operations.

Spendmor Wastemor April 17, 2014 - 5:43 pm

We have tens of thousands of fine citizens being paid to either do nothing while housed at taxpayer expense, or to roam the streets and urinate.

We also have track workers being paid to wait for a shovel to lean on.

Solution is obvious.

SEAN April 17, 2014 - 8:23 pm

Point taken, but that depends on how you define sitting around & doing nothing. You are not considering the rules of many of the benefit programs that are “needs based.” Quite often the benefits are better the less income you have. Now don’t get me wrong, I’m no fan of such regulations, but I just need to point this out for clarity.

Solution is obvious.

Don’t urinate on a shovel. No seriously put these people to work & don’t mess with the esential benefits – everybody wins.

Bolwerk April 18, 2014 - 8:02 am

Well, quelle surprise, no work rule reform. Figured that was a big if anyway. The path to work rule reform is probably through the legislature, not negotiations between two groups that really have very little incentive for work rule reform.

FWIW, they probably are anticipating a somewhat improved economy in coming years, which is probably why they expect no effect for “planned fare hikes or razor-thin operations margins in the out-years in its financial plan.” It is prudent to keep the margins thin, however, because if there is a big surplus, the MTA would have a hard time saying no to a bigger raise.

John-2 April 18, 2014 - 8:51 am

I read last week that in terms of recovery of jobs lost during the 2008-10 period, New York and Texas are the top two states — people upstate might not agree, but the downstate numbers the past 3 1/2 years have been better. As a result, in an election year that puts less pressure on the governor to show fiscal restraint, since from the state’s point of view, they can use ‘rosy scenario’ budget projects to justify the contract, based on economic growth over the next three years at least mirroring the past three years.

If Cuomo wins his bet, at best it’s a status-quo deal with the TWU that kicks the main problems down the road to 2017. If he’s wrong and the economy downturns, there could be pressure on the MTA to return to their wonderful capital investment program of the late 1960s through early 1980s as a way to make up for the higher salaries and lower fare and tax revenues.

lawhawk April 18, 2014 - 9:41 am

Every recent contract negotiation has essentially kicked the can down the road. No one has been willing to tackle the massive problems with the MTA fiscal situation for years.

You would have thought that Sandy would have been a wake up call for more infrastructure spending to build capacity/redundancy, we get a governor who promotes tax cuts and symbolic half-measures over a true reform of the MTA – all to garner a few more votes in what’s likely to be a landslide election in November.

The MTA capital plan will suffer, regardless of the outcome of the union deals, because the state continues to disregard the need to fund capital improvements rather than racking up even more debt in the MTA’s name.

Nathanael April 20, 2014 - 10:33 am

Honestly, the TWU deal isn’t the worst thing in the world. If they let the LIRR unions get away with continuing their completely demented work rules, that will be the proof that they Just Don’t Give A Damn.

Nathanael April 20, 2014 - 10:35 am

The LIRR is a big money-drain compared to the subway, already.

If the LIRR unions won’t upgrade to at least mid-20th-century work rules, sack ’em all and break the union. (Right now the LIRR has essentially 19th century work rules. The subway work rules are up to the mid-20th century.)

Anonymous Coward April 18, 2014 - 6:08 pm

Even more outrageous , no one is talking about the universal railroad pass.37000 passes for non employees ?Cost of 37000 Ronkonkoma monthlies annually 157,000,000 , guess the ATM(MTA) has one gigantic money tree no one knows about , haha . You can’t make this insanity up

Larry Littlefield April 20, 2014 - 12:59 pm

“Even more outrageous , no one is talking about the universal railroad pass.37000 passes for non employees?”

Which non-employees? By and large, transit workers do not use mass transit. They drive.

BenW April 21, 2014 - 4:56 pm

Except apparently you can….

Anonymous coward April 20, 2014 - 3:39 pm

Larry , my math looks way off . What I meant about non employees is transit workers clogging up the LIRR. The pass is for non-NYC employees only , are spouses included. Let’s figure 10000 transit workers at 4k a pop get the pass,that represents a $40,000,000 annual loss of MTA revenue and they have money problems ?


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