As Albany goes around and around, looking for a way to seize more from the future to offset the damage they did to the present in the past, you may ask “what should they do” about the MTA meltdown. Take a time machine back and undo what they have done is the most reasonable answer. But back in early 2008 I did write a series of posts describing the problem with the MTA Capital Plan and stating what should be done about it. Things the state legislature would never do. Here was my review of the MTA Capital plan proposed along with congestion pricing who says there is no plan?), the MTA’s capital plan costs, and the way the plan should be financed. In the latter case, the words “tolls” could be substituted for “congestion pricing.”
On a related subject, my proposal for what the state ought to do about the pension disaster can generally be found at the end of rants about the pension issue overall. For those who don’t read to the end, however, here it is: the state should mandate by legislation that the employer’s contribution to such pensions should, in all years regardless of returns, be 8 percent for most employees, 12 percent for those who lift heavy loads or work outside in all weather, and 15 percent for public safety jobs such as police and fire. (Except that New York’s governments should also pay back all the years in the past 15 when their contributions were below this level, and thus too low). The employees should be required to pay the rest, whatever is required based on investment returns and other factors, each year. Thus, they would also pay for any pension enhancements, not just in theory based on an excessive “presumed” rate of return, but in reality based on the actual rate of return.
I don’t just mean future employees should pay a large share of the cost of their pensions, existing employees should be required to pay as well. The share kicked in by New York’s public employees is among the lowest in the country, and unfair to the majority of New Yorkers with no pensions at all. And the New York State legislature has passed one pension sweetener after another for more than a decade, postponing the massive costs by pretending investment returns would be far higher than they could ever be. The result will be a devastating decline in public services despite high taxes.
Requiring significant contributions may mean a big drop in take home pay for a few years, but lots of the people who pay for public employee pensions in taxes are facing the same fate. The state constitution may say pensions cannot be diminished or impaired, but far from doing so this proposal would strengthen them. And if the current employees found sharing pension costs too burdensome, they could negotiate with their particular employers to get raises — in exchange for sharing the cost of health care in retirement, and thus shifting some of the burden to those who fleeced and fled also. In the future, the employee share would drop, but the employer share should never be allowed to fall again.
They’d never do it, but this and the proposals above would end the MTA financial crisis. There is, however, yet another alternative. I’m prepared to see that happen as well, as I described in my MTA post more than a year ago.