The proposed seven-year contract between New York's Metropolitan Transportation Authority and eight Long Island Rail Road unions would require the MTA to draw down an additional $40 million annually in pay-as-you-go funding, its chairman said Wednesday.
"That's if we implement the report by Presidential Emergency Board 245 exactly as recommended," Thomas Prendergast told reporters after the MTA board's monthly meeting in Manhattan.
The mediation board, in a nonbinding advisory, sided with the union's proposal for 17% raises over five years instead of the MTA's 11% over six.
"We're committed to our policy of no fare hikes above the rate of inflation," Prendergast added.
An LIRR strike could occur as soon as July 20, when the cooling-off period mandated by the Railway Labor Act expires.
The federal act governs commuter rail lines such as LIRR and Metro-North Railroad, also an MTA unit.
On Tuesday, MTA officials announced a new offer of 17% stretched out over seven years, which averages out at 2.4% annually. The offer calls for health care contributions of 2% from existing employees and 4% from new employees — LIRR employees now pay nothing — but no work-rule changes.
The contract with the subway Transit Workers Union Local 100, which the MTA signed last month, called for a $70 million drawdown from the so-called paygo account beginning in fiscal 2015.
Prendergast spoke two days before the MTA and LIRR unions were scheduled to meet over the authority's latest offer.
Anthony Simon, the chief spokesman for the unions and general chairman of the Sheet Metal, Air, Rail and Transportation Union, said in a statement that the MTA "continued its four-year pattern of bargaining in bad faith."
LIRR employees have worked without a contract since 2010.
Nicole Gelinas, a senior fellow at the free-market think tank Manhattan Institute for Policy Research, said MTA should take a firmer stand and cite finances.
"The MTA ought to come right out and say they can't afford to pay what the unions want, instead of jumping through hoops," she said. "They should be up front and say they have an unfunded capital plan, they have operating deficits and they have to keep fares reasonable."
The authority is one of the largest municipal issuers with roughly $34 billion in debt as of May 30. Moody's Investors Service rates its transportation revenue bonds, its primary credit, A2. Fitch Ratings and Standard & Poor's rate them A and AA-minus, respectively.
The MTA over the past year has shifted from three years of "net zero" -- equivalent givebacks in work-rules changes and pension and health-care benefits -- to 11% raises, than 17%.
Gelinas criticized the MTA for giving in on work rules. "Work rules push up overtime pay and overtime pushes up pension costs," she said.
The board also unanimously approved a lease for a restaurant, cafe and bakery/deli at Grand Central Terminal's Vanderbilt Hall, that Danish restaurateur and cookbook author Claus Meyer would operate.
