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
One of New York’s Biggest Medicaid Contractors Is Quietly Acquiring a Competitor
Author's note: This post has been updated to correct an error in the second paragraph.
As state lawmakers debate the future of Medicaid home care, one of the program's bigg Read More
The Union Gave Them the Wrong Data. The Pols Cited It Anyway.
The episode shows the extent to which New York elected officials fail to question the state’s public employee unions—or look at data themselves. Read More
New York’s Home Health Workforce Jumped by 12 Percent in One Year
New York's home health workforce has continued its pattern of extraordinary growth, increasing by 62,000 jobs or 12 percent in a single year, according to newly released data from the U.S. Bureau of Labor Statistics. Read More
While New York’s Medicaid Budget Soared, Public Health Funding Languished
Four years after a devastating pandemic, the state has made no major investment to repair or improve its public health defenses.
While funding for Medicaid over the past four years Read More
Unions are pressing bogus arguments for blowing up NY’s public pension debts
New York's public employee unions are arguing, without evidence, that state lawmakers need to retroactively sweeten the pensions of workers who have been on the job for more than a decade. In fact, state and federal data show why state lawmakers shouldn't. Read More
A Medicaid Grant Recipient Sponsors a Pro-Hochul Publicity Campaign
While much of the health-care industry is attacking Governor Hochul's Medicaid budget, at least one organization is rallying to her side: Somos Community Care, a politically active medical group in the Bronx that recently r Read More
New Jersey’s Pandemic Report Shines Harsh Light on a New York Scandal
A recently published independent review of New Jersey's pandemic response holds lessons for New York on at least two levels.
First, it marked the only serious attempt by any state t Read More
Senate, Assembly Budget Plans Include $4B Pension Giveaway
A little-noticed provision in lawmakers’ budget proposals would also be the most costly: their proposal to change state retirement rules would slam New York taxpayers with more than $4 billion in new debt, and immediately drive up pension costs, by retroactively sweetening the pension benefits of public employees. Read More