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New Jersey Transit is experiencing a coronavirus pandemic and a reduction in the number of passengers it has caused with federal aid, which now covers about a third of its annual budget.

But with the latest health statistics showing that the pandemic may weaken, transport advocates are again expressing concern about the long-term financial trajectory of New Jersey’s nationwide public transportation system.

Just as they did before the pandemic – and before significant federal aid arrived – advocates urged Gov. Phil Murphy and state lawmakers to provide NJ Transit with a dedicated source of government revenue as permanent, ongoing funding.

They argue that this would mean that NJ Transit will no longer succumb to the vagaries of the state’s annual budget process, which is about to begin in Trenton next month. It could also ease the pressure on the need for other funding to help support the agency’s operating budget and address concerns about the fiscal break that is looming after federal dollars are used.

This year, proposals for more substantial NJ Transit fiscal assistance have a new wrinkle. And that involves greater efforts to lift economically vulnerable communities across New Jersey, which are often heavily dependent on bus service. Lawyers have put NJ Transit in the best position to address the justice issues that have arisen during the pandemic.

“People need mobility to thrive,” said Zoe Baldwin, director of the New Jersey Regional Planning Association, during a recent hearing convened by the Assembly’s Transport Committee.

“We cannot make the state fairer or less segregated without actively working to increase transport capacity,” she said.

No major source of government revenue

Unlike many other major public transportation organizations, NJ Transit does not have a primary source of government revenue intended solely to fund the agency’s annual activities.

Instead, NJ Transit was forced to rely heavily on user tariffs as well as a number of other sources. These include operating grants, which are paid into the state budget each year by governors and lawmakers.

Murphy, a Democrat who became governor in early 2018, increased NJ Transit’s state budget subsidies before the pandemic as part of a broader goal of maintaining stable tariffs for both buses and railroads.

The Murphy administration has also entered into an agreement with the New Jersey Office of the Turnpike Authority, which provides for increased funding, which the agency contributes annually to the operating budget of NJ Transit; administration officials say improving public transportation in New Jersey eases pressure on traffic, which is a major driver of global warming.

However, in addition to relying on subsidies from the state budget and highway funds, NJ Transit also regularly uses part of its capital resources to cover operating costs. Funding has also been repeatedly transferred to the budget of NJ Transit from the state clean energy fund, which often provokes criticism from environmentalists.

“There should be no ‘Sophie’s choice’ between mass transit and clean energy financing,” said Doug O’Malley, New Jersey’s director of the environment. “We need a dedicated source of funding for NJ Transit and reliable clean energy financing that is not under attack.”

A major audit commissioned by the Murphy administration in 2018 called the agency’s broad financial model “inadequate, uncertain and volatile.”

Uncertain future

This year, NJ Transit is operating on a budget of $ 2.65 billion, just approved by its board earlier this month. As tariff revenues continued to suffer from the pandemic, the agency’s budget was balanced with nearly $ 1 billion in federal aid for the pandemic, according to budget documents.

NJ Transit said the agency still has about $ 2.5 billion in federal aid that could be used over the next few years as it continues to grapple with uncertainty caused by the still-ongoing health crisis.

Officials also highlighted ongoing efforts to reduce the agency’s long-standing dependence on capital maintenance funding, noting that the current budget budget of $ 362 million is the lowest budgeted transfer for NJ Transit in 15 years.

“Constantly reducing the amount listed since then [fiscal year 2019]Governor Murphy has not proposed a budget that has included a fare increase since he took office in 2018, ”said NJ Transit spokesman Jim Smith.

However, during her testimony before the Assembly committee earlier this month, Baldwin said most of the country’s major public transport systems can count on receiving 47% to 62% of their annual operating aid through special tax revenues.

Credit: (NJ Spotlight News)
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“Travelers need to know that the bus will arrive on time and that fares will remain affordable,” Baldwin said.

“This means that we need special, periodic operational means so that the agency can keep tariffs low, attract enough manpower from drivers and engineers, and ensure that riders are not delayed due to mechanical and system failures due to delayed technical maintenance, ”she said.

Achieving transit capital

During her testimony, Jeanne Czarnec, deputy director of the Tri-State Transportation Campaign, pointed to racial and socio-economic disparities in New Jersey that have been exacerbated by the pandemic. She called for a greater focus on the service of “transit-dependent racers whose mobility is determined by New Jersey Transit.”

“To determine if New Jersey has reached transit capital, one needs to ask a simple question to racers: do you have the same freedom of movement as someone who has access to a car? If and until this answer is “yes”, we have failed to build an equal transport and transit network, “- said Chernets.

Prior to the pandemic, state lawmakers discussed ways to support NJ Transit’s finances for the long term, including a plan backed by then-Senate President Steve Sweeney (D-Gloucester) that provided a portion of the state’s annual corporate tax revenue to support the agency.

Under this proposal, an amendment to the Constitution would be used to formally allocate these tax revenues and other sources of income.

But Sweeney’s plan and broader discussions about NJ Transit’s long-term funding were pushed to the background at the State House when the pandemic came and caused a severe economic downturn in early 2020 that initially shocked the state budget.

Murphy’s budget address

For his part, Murphy is preparing for his annual budget message, which will be delivered during a joint meeting of the Legislative Council, scheduled for March 8.

It remains to be seen how much funding the governor will allocate to NJ Transit, or whether his spending plan will include any proposal to create a new source of special funding for public transportation.

Murphy’s spokesman Michael Zhadanovsky declined to discuss details of the governor’s budget proposal last week, but said Murphy throughout his tenure “prioritizes stable funding for NJ Transit” and increased the agency’s funding to “historic highs.”

Asked whether the creation of a special source of revenue in this year’s budget should be discussed, Zhadanovsky also pointed to a financing agreement with the governing body, which will lead to the transfer of billions of dollars of NJ Transit by 2028.

“Although details of the future budget are not yet available, support for NJ Transit remains a priority for our administration,” Zhadanovsky said.

Asked about successive transfers from the state clean energy fund – $ 82 million annually over the past few years – Zhadanovsky noted the administration’s ongoing efforts to make NJ Transit more environmentally friendly, including through the purchase of electric buses.

“Any money that goes to get New Jersey residents out of cars and get on buses, trains and light rail is money that goes to improving the environment and fighting climate change,” he said.

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