Cuomo cuts an M.T.A. labor deal with ‘no fare increases’

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After two long years of stop-and-go negotiations, Governor Andrew Cuomo today announced that the Metropolitan Transportation Authority and the Transport Workers Union had struck a tentative labor contract deal.

The announcement, which was light on details, includes five years of annual wage increases, including 1 percent in the first two years, and 2 percent in each of the final three years, paid maternity and paternity leave, improved optical and dental benefits, and, noted union president John Samuelson, pointedly, "no zeros."

"The union believes that we've achieved many of the goals that we set out to achieve," said Samuelson.

Though the deal, which will affect most subway and bus workers, does include small worker increases in health care contributions ("from 1.5 to 2 percent," according to Prendegast), the deal comes with no specific work rule reforms and appears, as a whole, to be a win for the T.W.U.

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"This likely adds $200 million to annual payroll," said the Manhattan Institute's Nicole Gelinas, in an email, adding, "The healthcare concession is not worth much to the M.T.A., maybe $10 million. These are educated guesses based on payroll data, but that is all we have for now."

Last year, M.T.A. chairman Tom Prendergast insisted that the authority's financial plan was predicated on "three zeros."

"What we've been holding pretty fast to is what we call three-net-zeroes," he said. "Which means if we give them [wage] increases that can be funded through a work-rule concession, we're willing to do that."

"We're not at three zeros," he said today, nevertheless adding, "But we've got a deal that lives within the financial plan and that’s the most important thing."

It's not clear how much the deal will cost in real terms.

Both the union and the M.T.A. board must now approve it.

But, Cuomo insisted that aside from the already scheduled 2015 fare hikes, "There will be no fare increases due to this contract negotiation."

"It is hard to make of the governor’s comment that this won’t result in a fare hike," countered Gelinas. "Money is fungible, and an additional stress on payroll eventually will result in more money needed from somewhere, whether from fares or subsidies.

Further, she argued that, "The deal puts the capital plan at risk, as the M.T.A. faces a $250 million deficit in two and a half years’ time, meaning that it already faced difficulty taking on new long-term debt, even without this deal."

The deal does use "resources that won’t be availabe for a future capital plan," said Charles Brecher, the Citizens Budget Commission's consulting research director.

As Steven Greenhouse noted when he broke news of the impending deal yesterday: "if the transit workers receive a contract that contains substantial raises, that could increase pressure on Mr. de Blasio to award sizable raises, when the city already says it cannot afford."

The mayor's office had no immediate comment.

Gene Russianoff of the Straphangers Campaign said he's still withholding judgment.

"The devil is always in the details," he said. "So like many others, we reserve final judgement until we study the management-labor contract."

--with reporting by Gloria Pazmino