As part of the tentative deal, the MTA will scrap its controversial pension proposal that would have required all new hires to contribute 6 percent of their income toward their retirement.Oh, the horror of actually paying for a benefit in order to keep the entire pension system solvent. The union has absolutely no stake in the solvency of the system because they know that shortfalls will be covered by the state and city. They're concerned that they may be required to put an increasing percentage of their wages towards benefits like pensions or health care.
TWU president Roger Toussaint vehemently opposed creating a new pension tier, which he charged would have forced "the unborn" workers to put up three times more of their income to finance their pensions than current employees who pay 2 percent.
But the tradeoff is that the city's transit workers will be required to finance more of the escalating cost of their health coverage, either by contributing a certain percentage of their income toward health insurance or through higher co-payments for medical services.
TWU members currently pay nothing toward health care premiums.
Welcome to the real world where these items have real costs and those costs are borne by the taxpayers and commuters who use the transit system. Yet the problems with the pension system aren't just isolated to the TWU/MTA. All the public unions have similar pension troubles, and containing these costs will mean that future generations of teachers, police, fire, and transit workers will not have as generous benefits as those in the past. The system simply can't afford that kind of extravagence.
At the same time, more must be done to rein in the public authorities and transparency of public finances so that the books can't be cooked. The MTA is especially dubious at using double books. That must end. And GAAP should be required for all public authorities, which are currently using cash accounting.
Both Mark Tapscott and Don Surber note that the 800 pound gorilla in the room is the fiscal prudence of pensions (defined benefits as opposed to defined contribution plans or 401k). The pension issue was apparently taken off the table, but its fiscal impact will be felt for years to come. Who wins if taxpayers and commuters are saddled with higher taxes and fares just to cover the pension fund and not long-term capital projects or operating revenues?
Posted to Basil's Blog.
Prior Coverage: Tallying the Toll
Winners and Losers
Seeing The Humor in Striking
Three Strikes and You're Out?
Rogering New York
A Pox On Both Their Houses
The Pension Gap
The TWU to NYC: We're Gonna Strike
Taking Sides in the Transit Strike
Technorati: toussant, toussaint, strike, nyc, transit strike.