As we’ve said (repeatedly), the new labor contract betwen the Metropolitan Transportation Authority and the Transport Workers Union, decided by a panel of state arbitrators yesterday, is an outrageous giveaway.

But just as outrageous was the suggestion that two arbitrators — John Zuccotti, representing the public, and Roger Toussaint, representing the TWU — made in how the MTA should pay for the deal, which will cost nearly $465* million more in higher wages alone by three years’ time.

First, the arbitrators refered to the bailout that the MTA received from state taxpayers three months ago, saying that “in considering ‘the impact of the panel’s award on the financial ability of the public employer to pay …,’ this panel points to the state’s financial assistance package that was passed on May 7, 2009.”

Second, the arbitrators pointed to a bill that President Obama signed in June, which “permits the MTA to utilize 10 percent of the federal stimulus funds it has been allocated toward operating expenses. As the MTA has been allocated $1.1 billion in federal stimulus funds … the MTA could … use $110 million toward operating expenses.”

Third, the arbitrators said that the MTA could “manage its capital programs to meet better its overall financial requirements,” perhaps through “a deferral of its capital programs, which it has done numerous times in the past, particularly when faced with cost overruns or budget constraints.”

In sum, then, the two arbitrators (a third, NYU prof Dall Forsythe, representing the MTA, dissented) want New York’s economy to suffer without adequate new investment and improvements to an outdated, aging transit system, so that well-paid union members can receive compensation packages that would be generous to a fault in the private sector.

And they want New Yorkers to pay higher taxes — such as the new $1.5 billion payroll tax included in the recent bailout — for this purpose.


But blaming the arbitrators distracts from who deserves the ultimate blame — Gov. Paterson, for not holding the line on wages and benefits during negotiations, and for helping push the contract to arbitration in the first place, which helps him avoid accountability now.

*corrected from an earlier version.


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The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.