Passenger Trains > LIRR: the bill comes due--revisited

Remember Lakawanna484's posting (7/28) about the wage settlement on the Long Island?; and how The Wall Street Journal (and some naysayer rail fans) spun the story as if this were going to bankrupt NYC, and how the MTA would have to cut the L.I. budget to shreds; bla,bla,bla?

Well, contrary to all this; the MTA has just announced that their new budget contains some very nice service enhancements on the L.I.

[url=http://www.progressiverailroading.com/passenger_rail/news/MTA-budget-includes-service-improvements-for-Long-Island-Rail-Road--41214?email=floridajoe34233@yahoo.com&utm_medium=email&utm_source=prdailynews&utm_campaign=prdailynews07/31/2014]http://www.progressiverailroading.com/passenger_rail/news/MTA-budget-includes-service-improvements-for-Long-Island-Rail-Road--41214?email=floridajoe34233@yahoo.com&utm_medium=email&utm_source=prdailynews&utm_campaign=prdailynews07/31/2014[/url]

Joe

PS: nice to read that L.I. ridership is growing again.



Edited 1 time(s). Last edit at 07/31/14 07:59 by floridajoe2001.

Opps! I can't get this link from Progressive Railroading to work.

Can someone else supply it.

Joe



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Edited 1 time(s). Last edit at 07/31/14 08:06 by floridajoe2001.

They are raiding Pension fund contributions and perhaps some capital programs to pay for the higher wage settlement.
The service increases were already budgeted and aren't that costly anyway, which is mostly running the West Hempstead Scoot on weekends and adding 2 cars to a bunch of rush hour trains.

http://www.mta.info/news-lirr-west-hempstead-budget-long-island-rail-road/2014/07/29/mta-lirr-announces-34m-service

AND

http://www.mta.info/news-long-island-rail-road-fares-budget/2014/07/28/mta%E2%80%99s-proposed-2015-budget-and-four-year

" Over the four-year period, supplemental contributions to an LIRR pension plan totaling $110 million will be eliminated, though all actuarially-required contributions will continue. Also, $254 million will be withdrawn, and additional contributions totaling $533 million will be suspended for four years, from a discretionary fund for future retiree health benefits which has no mandatory funding level. The plan also reduces pay-as-you funding for the MTA Capital Program by $80 million per year, which is equivalent to a $1.5 billion reduction in Capital Program funding capacity."



Edited 1 time(s). Last edit at 07/31/14 08:07 by joemvcnj.

To: Joemvcnj

True, corporation are constantly juggling their pension contributions for a whole host of reasons.

The latest example is the House version of the Highway Funding Bill which dose exactly this. They've even given it a "sound bite" name--"Pension Smoothing".

I wonder if the MTA will also call their game playing with pension contributions "pension smoothing"?

Nevertheless; improvements are comming to the L.I.

Joe



Edited 1 time(s). Last edit at 07/31/14 08:16 by floridajoe2001.

I don't recall suggesting that the Long Island Rail Road or the MTA was going bankrupt. Perhaps you could point me to a link? ETA: Or that the Wall Street Journal suggested this was a bankruptcy inducing strategy. Poor use of resources? Sure.

I did mention that the NY system provides an uncommon amount of transportation funding other than the begging at the legislature's door. Surcharge on the sales tax, surcharge on income tax, tax on real estate transfers, ability to use highway tolls for rail and bus purposes, etc. That's a system many commuter rail systems would envy.

Raiding the benefit plan assets isn't a good idea, in my judgement. Very short solution which creates a larger long term problem. Others will differ, of course.



Edited 1 time(s). Last edit at 07/31/14 08:20 by Lackawanna484.

The MTA press release says what they will do to the LIRR Pension fund. They didn't say a thing about such to the NYCT's, MN's, SIR's, or TBTA's, even though all get identical fare and toll hikes simultaneously as a matter of policy, despite they are all separate subsidiary companies with separate accounting and capital budgets.

So you can assume this is directly linked to their wage settlement. I would not generalize this into "corporations are constantly juggling their pension contributions for a whole host of reasons".

My "take away" point is just this: spinning the wage settlement as damaging to the L.I. is bunk.

Ridership is growing; and service is being improved--and MTA will not raise fares. So, all the worry was for nothing.

Joe

PS the pension fund thing only concerns a "supplemental" contribution that will not be made. Normal contributions are not involved--so says Trains Mag. news wire.



Edited 1 time(s). Last edit at 07/31/14 09:03 by floridajoe2001.

So its all good to add service where it may be needed. Yes, I agree.

Its also somehow good not to fund pensions that will eventually come due? So if we have to cut service drastically 10 or 15 years down the tracks to pay for retirement benefits that are cast in concrete, its okay because we're adding service now.

This is why I was an English major in college. Public agency math makes my head hurt!

timecruncher

timecruncher Wrote:
-------------------------------------------------------

> Public agency math makes my head hurt!
=============================================

The other thing that must be considered is that what's being said now is just
that...what's being said now. It is not unknown that public figures will
spin the facts to make themselves look good, and too many gullibles will go ahead and
believe them. Service is improving, all is to be hunky-dory and wonderful
and everyone will be able to live in contentment and fulfillment.

Additional revenues from new service and enhancements will finance the losses
incurred by the rest of the operation. The deficit will decline..."two billion,
one billion, half a billion...ZERO!"

Then, not two years later, the company was functionally bankrupt, the person who
uttered those words had quit and gone elsewhere, and his successor had to beg
for a loan to make payroll.

Remember? It wasn't all that long ago and those who forget are fools.



Edited 1 time(s). Last edit at 07/31/14 10:43 by GenePoon.

Not sure what the LI figures are but if you look at what the fares contribute to revenue, increase ridership is a
plus but can only contribute so much. Pensions have a reprieve with the stock market returns but past returns are
no indication of future(boilerplate) returns.

So you either find ways to operate more efficiently which is unlikely in this type of environment,
you defer expenses, raise fares or increase public subsidy.

Not sure there is any other way to spin it but obviously they do not want to make the connection
higher wages equal higher fares as that is bad politics

Bob