Some 150,000 Jersey rail riders may still avoid a massive disruption in their commutes next week if NJ Transit’s management and the rail line’s labor leaders agree on a new contract that union members approve.
NJ Transit has nearly $900 million in net pension and retiree health-care liabilities. Over the last five years, it has consistently put aside less than half of what it needs to meet its health-care obligations.
But even if workers decide not to strike, there’s plenty of long-term pain in store for riders of the financially troubled rail system and state taxpayers.
NJ Transit unions have been working without a contract since 2011 and, unlike other government employees in the state, have the right to strike under federal laws governing railroads. The unions are demanding 18 percent wage increases over six years and want to limit their contribution to health insurance to 2.5 percent of pay.
NJ Transit management, instead, wants workers to pick up a greater share of health costs — at least 10 percent of salary — and take smaller pay increases. The agency points out that granting workers their demands would cost NJ Transit $183 million annually.
The agency has been struggling for years in large part because of generous salaries and benefits. It collected $933 million in passenger fares in 2015 but spent nearly $2 billion on operations. Labor costs alone account for 55.4 percent of the agency’s budget, including a whopping $439 million in fringe benefits.
To pay that bill, the agency relies on more than $1 billion in subsidies and grants, largely from state and federal sources.
Union leaders say they’ve gone long enough without new contracts. They’re buoyed by the opinion of a federal mediator who has largely sided with the unions in their attempt to retain their expensive health benefits because other rail workers in the region, notably those at Metro North and the Long Island Rail Road, receive similar packages.
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