Place MTA into receivership and start from scratch

When it comes to outrageous pensions and overtime at the MTA and public entities, we find ourselves at a crossroad. Thanks to the Empire Center for Public Policy’s exposé of a railroad worker soaking up $344,000 in overtime, the iron is suddenly hot for change.

Those of us who have for been preaching for radical reform fear politicians may blow this opportunity to finally achieve some meaningful taxpayer victories. A mere trimming around the edges will not suffice.

This is our chance to declare the MTA insolvent and start from scratch under a receivership that can legally revamp the archaic rules, regulations and contract provisions that have resulted in employees collecting unfathomable overtime, resulting in six figure pensions taxpayers foot over the life of the retirees.

These giveaways have been common for decades — the result of sheepish politicians giving away the store to the unions in previous negotiations and legislation. There was no public uproar because average folks were too busy working for a living to delve into the intricacies of public sector contracts. For all they knew, a police officer, firefighter, or the fellow punching your railroad ticket was just another hardworking stiff earning 60 grand a year. Even if they got wind of a six-figure salary base, they wouldn’t flip out, because we are indeed a high-cost region. What few knew about was the ridiculous rules and regulations embedded in these contracts that lead to unsustainable levels of waste and inefficiency, as highlighted in the recent article, “Stop this runaway train of overtime costs at MTA, LIRR,” by Nicole Gelinas of the Manhattan Institute.

So, what’s the answer? Metro-North’s labor representative declared: “How do you get out of it? You negotiate it — the same way you got into it.”

But for management to remove an absurd rule that allows one to get paid for not working when it’s raining, it would have to barter something rather rich to the union in return, thereby negating the savings from the reform.

Moreover, there was a window to negotiate givebacks, but every time our electeds had some leverage, they punted.

When, in 2009, the MTA was seeking billions in additional revenue through a payroll tax foisted upon businesses, schools and even nonprofits, some of us begged then-Gov. Patterson to hold out until the nonsensical contract provisions were amended. The MTA got its money; the taxpayers got nothing. We warned that without implementing reforms, we would be right back to this point years later, because, ultimately, the MTA didn’t have a revenue problem, it had a spending problem.

In 2014, the Long Island Rail Road union sought a 17 percent increase over six and a half years. This was the time for Gov. Cuomo to get tough, but he basically gave the union almost exactly what they wanted: 17 percent over six years. No meaningful reforms.

We saw the same movie play out this year, as politicians scrambled to give the MTA billions of dollars via congestion pricing. This was the golden opportunity to garner reform, but politicians implemented the tax without a single giveback.

That’s why it’s so ironic to see the scathing letter of Melissa DeRosa, the governor’s top aide, expressing outrage over these overtime revelations. The governor was blaming his own appointees in the MTA, who had no power to do anything without his approval. The governor did nothing to the obtain reform in 2014 when he was up for re-election, nor during the congestion pricing debate. And yet, he blames his own appointees for this failure.

Suddenly, the governor is calling upon his newly appointed chairman of the MTA, Pat Foye, a well-respected administrator, to rein in overtime. But, how is Foye to do this without the help of the legislature or governor?

If Albany pols believe reforms will come about by negotiating with the unions after already giving the store away, good luck with that. It’s time to recognize that the MTA is too far gone and must be declared insolvent. Put it into receivership the same way the cities of Detroit and San Bernardino were when they ran out of money. A judge came in and ordered changes to outlandish provisions that simply were no longer viable.

Meanwhile, the state can pass perhaps the most meaningful reform for New York taxpayers: ending the practice of incorporating overtime earnings into pension calculation. This is the driving force that ratchets up overtime for senior employees in the last three years of their service. It’s not so much the hundred thousand dollars in overtime that is destroying the taxpayer. Rather, it’s the fact that an upcoming retiree’s base salary of a hundred grand is doubled, and so his annual income in retirement will far exceed the working income for the average New Yorker.

Enhancing transparency, as some watchdog groups advocate, is fine, but won’t save much money. Appointing special prosecutors as proposed by the governor’s rep will make for a temporary headline, but nominal long-term savings. The problem is not that the egregious overtime was illegal, but rather that it was all legit under the present contract.

It is imperative that the media not buy into tepid, faux reforms that do little and allow the issue to fade away. Focus must remain on the two reforms that will finally allow taxpayers and commuters to remain in this state. Place the MTA into receivership and end the practice of factoring overtime into pension calculations for not just public sector employees hired after 2012 (as directed by the new Tier 6) but for all current public employees, two thirds of whom who were hired before then.

The iron is hot. Let’s not blow it.


Steve Levy is president of Common Sense Strategies, a political consulting firm. He served as Suffolk County executive, as a NYS assemblyman, and host of “The Steve Levy Radio Show.” He is the author of “Bias in the Media.”

Recent Posts