Ratings agency Moody’s has put the state-run Metropolitan Transportation Authority in a sort of purgatory, noting (but more diplomatically than I will) that Albany’s utter failure to solve a relatively simple problem “puts the MTA on an operating path that may not support the current A2 rating.”

The bond analysts are much clearer than anyone among the supposed “transit advocates” that Albany and that authority must deal with looming pension obligations.

Moody’s notes that even after savings from cheaper fuel, the MTA’s costs will increase by much more than expected starting, well, now, because of much higher pension costs.

As the MTA starts to make up for investment losses in its employee pension funds, it must spend $245 million more than it had planned this year, $238 million next year, $278 million the year after, and so on.

To put it in perspective, these extra costs are more than the MTA will save from its “draconian” (as described by MTA chief executive Lee Sander) and “horrific” (as described by MTA chairman Dale Hemmerdinger) service cuts.

Indeed, overly generous pensions and health benefits will cost the MTA nearly $3 billion annually by 2012 — $600 million more than today.

With the cost of union raises thrown in, the higher costs would consume at least a third, or more, of the new sources of tax revenue proposed by former MTA chief Dick Ravitch last year and rejected by Albany.

These higher costs should be a wake-up call that the governor and the legislature must pass a law to rein in benefits costs, through higher-than-55 retirements ages for future workers in appropriate job titles and higher employee contributions for both pensions (for future workers) and healthcare (for current workers).

It’s not rocket science, but just a simple math problem.

As E.J. notes in his Post op-ed today, Albany doesn’t really need union cooperation to pass such legislation. It just needs to do it.

Maybe some pressure from a different angle would help.

But, none of the people who purportedly stick up for subway and bus riders — i.e. Gene Russianoff of the Straphangers’ Campaign, but not just him — ever mention these costs, even though they’re a direct culprit behind service cuts and likely disinvestment in the coming years.

It would be nice to hear one of these people say: minimum-wage private-sector workers will face longer and more expensive commutes because Albany is craven when it comes to asking current workers to pay higher health contributions and asking future workers to adjust pension benefits.

You may also like

“Inflation Reduction Act” Holds the SALT

A “skinny” version of the massive “Build Back Better” legislation proposed last year by President Biden is slated to arrive on his desk shortly. Read More

Judge, Jury and … CFO?

A state court judge at a hearing this morning will consider whether to interfere with New York City authority over its own budget by ordering a preliminary injunction that ices a portion of Gotham’s recently enacted FY 23 city budget. Read More

State Budget Back in the Red

Historically large budgetary surpluses inherited by Governor Hochul are now just a memory with New York facing projected gaps of $13.7 Billion Read More

The Numbers Don’t Add Up on Cider Solar Project

Governor Hochul has just announced approval for the state’s largest to-date solar facility, the 3,000 acre Cider Solar Farm in Genesee County Read More

New York’s health insurance affordability problem gets worse

New York's health insurance affordability gap surged to a new high last year, with state residents paying an average of 16 percent more. Read More

New York Doesn’t Need the Build Public Renewables Act

Assembly Speaker Carl Heastie called for a special hearing this Thursday to get more input on the Build Public Renewables Act. Read More

US economy clears a key post-pandemic hurdle, while NY still trails

Amid raging inflation and mounting recession worries, the nation's private-sector payroll jobs total finally cleared the pre-pandemic level last month. Read More

NY’s jobs recovery now strongest downstate

The Empire State's private-sector employment gains over the past year have been increasingly concentrated in New York City. Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100

General Inquiries: Info@EmpireCenter.org

Press Inquiries: Press@EmpireCenter.org

About

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.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!