Sighs of relief resonated above loudly shuttering cameras Thursday as New York Gov. Andrew Cuomo and negotiators announced a deal to avert a looming Long Island Rail Road labor walkout.
"We were on the cusp of an impending strike," Cuomo told reporters on the 38th floor of his Midtown office near Grand Central Terminal. "Negotiations were difficult and complex. This represents a compromise by both parties after four long years."
LIRR's 5,400 workers will receive 17% raises over 6-1/2 years retroactive to 2010, mirroring the recommendations of two presidential emergency advisory boards.
All employees for the first time will contribute to health insurance costs and new employees will have different wage progressions and pension plan contributions.
Metropolitan Transportation Authority chairman Thomas Prendergast said health care savings would pay for the raises and that the deal would not require additional fare increases or diversion of money from the authority's five-year capital plan, which it must submit to state officials by Oct. 1.
Anthony Simon, the chief spokesman for the eight LIRR unions and United Transportation Union president, said he hopes for full union approval by Aug. 15. "We really needed the governor to step up. It's a fair contract and represented a compromise by all parties."
The MTA's board is expected to vote on it in September. "This is a contract we know the board will support," said Prendergast.
New York City Mayor Bill de Blasio's contract with the United Federation of Teachers, ratified in the spring, also called for health care savings.
Beyond that, the parties were short on numbers.
"This will be a difficult lift for the MTA's unions on a go-forward basis. An MTA union employee makes about $85,000 a year on average. Many New Yorkers don't make that kind of pay," said Anthony Figliola, a vice president with consulting firm Empire Government Strategies in Uniondale, N.Y., on Long Island.
"In order for the deal to work, employees had to pay into pension and health-care costs, like they do in the private sector," he said.
Cuomo took over the negotiations midweek, after talks broke off and vitriol held sway. "I'm not surprised the governor stepped in to secure the deal," said Figliola.
LIRR workers had been set to walk as soon as 12:01 a.m. Sunday, at the end of a federally mandated cooling-off period. The railroad prepared to begin orderly shutdown procedures as soon as Saturday.
"There was a high degree of agita the past few days," said Cuomo. "There could have been a lot more agita next week."
The LIRR, an arm of the New York MTA, is the nation's largest commuter rail line with 300,000 daily riders. State Comptroller Thomas DiNapoli said a strike could have cost the region $50 million daily.
The MTA is one of the largest municipal issuers with about $34 billion in debt. Moody's Investors Service assigns an A2 rating to the MTA's transportation revenue bonds, the authority's largest credit. Standard & Poor's and Fitch Ratings rate them AA-minus and A, respectively.
Moody's warned last week that a generous settlement could divert critical pay-as-you-go funds from the capital plan and force more debt issuance.
Finding the money to satisfy the presidential boards' recommendation was the big puzzle, said Cuomo. "That was the entire question." The governor said. "We didn't want to raise fares and we didn't want to eliminate any of the capital budget."
Although the MTA is a state agency, the federal Railway Labor Act governs commuter rail line LIRR's employees, who can strike.
"It's fair to say the most intense period was from 6 p.m. last night until early this morning," said Cuomo. "It was late, late. How late? I was too bleary-eyed to even look at my watch."
The last strike on the LIRR, the nation's largest commuter rail line with 300,000 daily riders, occurred in 1994, for four days. Cuomo's father, Mario, lost his re-election bid for governor later that year.
