The board of mediators appointed by President Barack Obama to help resolve a 31/2-year contract dispute between the Long Island Rail Road and most of its unions rejected the LIRR's claim that it can't afford to give workers raises.
"It simply cannot be concluded that the MTA's current financial position is one in which it is unable to pay for wage adjustments that are otherwise warranted," the 51-page Presidential Emergency Board report concluded.
While the recommendations are nonbinding, they represent a "home run" for workers, said Anthony Simon, general chairman of the United Transportation Union, the LIRR's largest labor organization.
"At this point, all unions on Long Island will accept the board's recommendations -- although they're not everything that we bargained for -- so we can avoid any inconvenience to the riding public," Simon said, referring to the potential for a strike in July if an agreement isn't reached. "We hope the MTA will do the same."
LIRR spokesman Aaron Donovan said in a statement only that railroad officials received the report "and are reviewing it."
The presidential board recommended annual raises for workers averaging 2.83 percent over six years, and increased health care contributions for all workers. It did not call for any changes in LIRR pension plans or to any work rules.
The report detailed many of the sticking points in the contract dispute between the LIRR and eight unions representing about 5,600 of its 6,000 unionized employees. The unions wanted annual raises averaging about 3.6 percent over six years, no changes to pensions, and to keep existing pension benefits and health care contributions.
The Metropolitan Transportation Authority, the LIRR's parent agency, wants increases in employee contributions to pension and health care costs, and to freeze labor costs for three years.
The MTA would agree to raises, but only if they were funded by other concessions. That includes the abolition of several work rules, including one that gives LIRR engineers an extra day's pay for operating a diesel and an electric train in the same shift.
MTA officials have said that a three-year freeze of labor costs is essential for the agency's financial health and emphasized that nonunion workers have not received raises in five years.
The review board largely shot down the MTA's arguments, noting that nonunion workers have received "ad hoc" raises, including changes in titles, "that have increased the pay for a substantial number of management personnel."
The board also said the MTA's finances have "significantly improved" over the past three years, and that there are "multiple potential sources for funding." It noted discretionary expenses recently made by the MTA, including rolling back a planned 2015 fare increase to 4 percent from the originally planned 7.5 percent, and increasing the amount the agency is setting aside to help pay for infrastructure projects.
The LIRR also wanted company pensions to be offset by federal disability benefits for retirees. The board rejected that proposal.
The LIRR's unions have been without a contract since June 2010. Earlier this month, the Presidential Emergency Board convened in Manhattan for five days of hearings, at which both sides presented evidence, including financial documents and testimony from witnesses.
Under the Railway Labor Act, the LIRR could request another Presidential Emergency Board to review the dispute. Simon said he did not expect a second board's findings would be much different from that of the first.
Without a deal in place, LIRR workers could legally strike in July. If they do, it would be the first organized work stoppage involving most LIRR unions since 1994.