On Saturday, the state-run Metropolitan Transportation Authority (MTA) got the terms of its new $47.5 million contract with the Amalgamated Transit Union, which represents 3,000 bus drivers in Queens and Staten Island.

busmain-300x243-1912111The agreement shows that arbitrators — who decide such things when both sides reach an impasse — remain unruffled by the financial, economic, and fiscal crises that have plagued the state over the past half-decade.

The verdict: Gov. Cuomo still needs to enact labor-negotiation reform.

The latest package is the same as what the MTA’s much bigger union, the Transport Workers Union, secured for the same period in its own arbitration nearly three years ago.

Workers got retroactive raises of 11.5 percent over three years, a reduction in health-care cost obligations, and no new productivity standards.

Two arbitrators, one representing the union and one representing the public, determined that the 66-year history of workers from this smaller union securing the same raises as their colleagues from the larger TWU outweigh the severe fiscal strains under which the MTA has operated in the past few years. (A third arbitrator, the MTA’s representative, dissented.)

The good (or at least neutral): the two-man majority made it clear that this award shouldn’t prejudice the current round of negotiations for a new contract between the MTA and the TWU:

If the Authority wants work rule changes … and if it wants a reduction in future [wage] increases, it should turn to its bargaining with TWU Local 100, as it has always done.

Indeed, it’s quite possible that TWU workers may find that a different pattern was set in another recent arbitration.

In December, a separate arbitration panel determined a retroactive contract for employees of the now-defunct Metropolitan Suburban Bus Authority.

That particular contract was for three years, but started three months later than the other two. The suburban bus workers got two years’ worth of raises identical to raises awarded to the larger two unions, but no raise at all for the third year of the contract.

The arbitrators in that decision didn’t explain their reasoning, only noting rather mysteriously that it involved “considerable reflection.”

One must presume that they reflected on the fact that Gov. Cuomo had just hammered out an agreement requiring a three-year wage freeze with the state’s largest union, the CSEA.

The bad: the latest agreement features two big red flags that the taxpayer and subway or bus rider should heed.

The first red flag is that Amalgamated asserted that arbitrators should not use the CSEA deal as a precedent, as CSEA and transit raises have only tracked each other in four of the past 33 years.

The union further argued that the CSEA agreement preserves wage increases for new hires over eight years, and that it also preserves longevity and downstate cost-of-living payments.

The majority arbitrators agreed, saying that there is “no basis” for following the CSEA pattern. They noted that the past TWU contract followed a set of city contracts, not state ones.

Taxpayers and riders are vulnerable to the risk that future arbitrators, too, may decide the CSEA precedent should not apply.

The second red flag is that the majority arbitrators said their award and the reasoning behind it was predicated on one thing: “assuming an ability to pay” on the part of the MTA.

Indeed, the state Taylor Law, which governs these agreements, requires that arbitrators balance a host of factors against the public entity’s ability to pay.

The two arbitrators made it clear that as long as the MTA has any dollar anywhere, it can afford to pay for raises.

In doing so, the arbitrators disregarded claims made by the MTA that it should not spend emergency reserves on wage hikes and that it should not divert capital-investment money to labor expenses.

Perhaps most startlingly, the majority arbitrators looked favorably upon the suggestion of a witness for the union, James Parrott, that the MTA get money for labor by asking banks to renegotiate interest-rate swap agreements.

Parrott wanted the MTA to more than ask; he counseled the authority to bully the banks in public, or at least threaten to do so in private, noting, in the arbitrators’ paraphrase, that “banks are presently vulnerable to criticism.”

The arbitrators agreed, noting “that it is more than difficult to understand why the Authority is of the opinion that it should not even try.”

It’s odd that a representative of a party to one contract — the union — would counsel breaking another contract to meet the obligations of a future one.

The takeway: absent state-level reform of the collective bargaining process to take these costly agreements out of the hands of unaccountable arbitrators, the public should be wary of any new push by “transit advocates” or others to create a new revenue stream for the MTA.

The risk is that arbitrators will see that money as a pot of cash for future union raises.

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