Fitch Admonishes MTA

New York's Metropolitan Transportation Authority needs "net-zero" settlements with its labor union and to implement fare and toll increases to keep budget gaps from resurfacing and rising, Fitch Ratings said.

Members of the Transport Workers Union Local 100 have been working without a contract since January. Under the MTA's proposed net-zero, the union would accept a three-year wage freeze, netting out any other compensation increase.

"If a settlement is not reached, we believe the budget gaps that were closed in this forecast would reopen and increase quickly," Fitch senior director Rob Rowan wrote in a report. Without an agreement, the MTA projects a $465 million budget deficit by 2014.

Planned fare and toll increases are expected to raise revenue by $450 million in 2013 and $500 million in 2015.

Fitch said cost overruns are likely but should be manageable.

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Transportation industry New York
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