NEW YORK, July 11 Meeting wage demands of Long
Island Rail Road workers threatening to strike over a pay
dispute may mean New York's Metropolitan Transportation
Authority will have to issue more debt to cover capital
investment costs, according to ratings agency Moody's Investors
The MTA has offered workers a 17 percent wage increase over
seven years along with higher contributions for medical
insurance and pensions by future employees, both sides said. The
unions have asked for a wage hike of 17 percent over six years
without such concessions for future employees.
"If the union successfully negotiates a higher increase in
salaries, the MTA would likely have to cut pay-as-you-go capital
spending or reduce its voluntary deposits to a trust for retiree
healthcare benefits," Moody's said on Friday.
The MTA operates the largest regional transportation network
in the United States. It has a yearly budget of $13.5 billion.
Its long term debt amounts to over $33 billion and it spends 17
percent of its budget on debt service costs. MTA's capital plan
calls for $29 billion investment from 2010 to 2014.
The MTA and a coalition of eight unions representing LIRR
workers have been negotiating for four years to try to reach a
contract deal. The winding down of a cooling-off period in the
talks allows the 5,400 unionized workers to walk off the job on
July 20, which would leave some 300,000 daily commuters without
The MTA's proposal would increase costs by about $21 million
each year from 2015-18, according to Moody's, which amounts to
about 1 percent of total labor costs, a level that Moody's
called "manageable." However, the deal could include $64 million
in retroactive labor costs for 2010 to 2014, a figure which
could increase to $126 million if applied to other MTA unions.
(Reporting by Edward Krudy; Editing by Leslie Adler)