The latest details to leak out about Gov. Cuomo’s deal with the Transport Workers Union put the MTA on the road to its own Bridgegate. That’s the risk you’ve got when a supposedly “independent” public authority won’t say “no,” no matter how horrid the political request.
This news isn’t about the $6 million TWU “slush fund.” It’s about how cash for the TWU’s raises comes from raids on funds for retirees.
This corrupt bargain will be more grist for Rob Astorino, Cuomo’s GOP challenger in the November election. Astorino was already hitting the governor on the budget and the economy. After this, it’s impossible to honestly call Cuomo a safe fiscal steward.
The governor posed as a hero at last week’s televised press conference to announce the TWU deal. After nearly 2½ years’ of impasse with the MTA, he’d “solved” the problem. The union’s 34,000 members would get 8.25 percent raises over five years.
Plus, as TWU chief John Samuelson crowed, the union would get “never-seen-before benefits” such as two weeks’ paid new-baby leave, and “significantly better” health benefits. Cuomo praised Samuelson for wringing these concessions, calling him a “phenomenal labor leader” and a “tough negotiator.”
MTA chief Tom Prendergast looked pale. Now we know why.
At the press conference, nobody said anything about how much the agreement would cost — and the MTA refused to show what they actually signed.
But at least part of the bad news is now out. In a new bond document, the MTA tells potential investors (as it legally must) that the deal will cost more than half a billion dollars over five years ($525 million, to be exact).
This, when the agency already faced a $255 million deficit in 2½ years’ time — despite the fare hikes already set to kick in.
And $525 million may be low-balling it. The MTA says that in the last year of the deal, the raises will cost only $114 million a year (including, presumably, for every year after that).
But last year, the MTA was publicly warning that raises would cost it $300 million a year — and indeed, an 8 percent hike to the TWU’s $2.5 billion or so payroll works out to at least $200 million.
So how could Cuomo say (as he did at the press conference) that the authority won’t raise fares?
Simple, that same bond document reveals: He’s going to raid the stash the MTA has been trying to put aside to pay for its promises to future retirees.
The MTA owes nearly $18 billion in the form of future health care (actually, it’s now a bit more, as the new deal sweetens retiree health care). It’s only put $650 million aside for that purpose — and now it’s going to raid that to pay for Cuomo’s raises.
He’s also going to raid the MTA’s pension stash.
No, not TWU pensions. Instead, it’s a “small” Long Island Rail Road pension — but one that’s racked up a $1.2 billion deficit, a whopping 3,000 percent of its payroll. Worse, the MTA now openly says that if it has to do similar deals with its other unions, it will raid its capital fund — that is, the money needed for stuff like new tracks and signals.
Who should be upset about this? Anyone who uses the subways or MTA bridges.
By raiding funds for retirees, Cuomo is borrowing long-term to pay for current expenses. Eventually, the people who pay tolls and fares will have to restore the funds he’s raiding — just not (maybe) while Cuomo’s still in charge.
“Fares are going to have to go up to pay for this political giveaway in an election year,” says Astorino. “This is what I’m talking about when I say we’re out of [fiscal] balance.”
Commuters — especially suburban commuters with longer rides — should care, too. “We have major problems. We need to invest in our mass transit,” says Astorino. But “enormous bills [will be] coming due” because of this “union giveaway in an election year.”
Union members shouldn’t be too happy, either. In California cities as well as in Detroit, retirees are learning that unfunded promises aren’t worth the paper they were written on.
The MTA board should be outraged, too. They have to vote on this turkey. If they approve it, they’re just letting themselves be used. (They might want to look at what happened at the Port Authority when board members indulged in misgovernance.)
Finally, the voters should be mad. Cuomo promised to be a new kind of governor — restoring integrity and responsibility after years of fiscal tricks under Govs. George Pataki, Eliot Spitzer and David Paterson.
But this is just business as usual — and exactly why a new Siena poll shows that only 22 percent of Empire Staters — and only 26 percent of Democrats — see New York’s fiscal position as “good” or “excellent.”
The costs these backroom deals engender are exactly why businesses don’t create enough jobs statewide — and why the middle class is giving up on New York.
This all provides a good opening for Astorino — who got elected Westchester county executive thanks to the same voter fears.
Nicole Gelinas is a contributing editor of the Manhattan Institute’s City Journal.