NJ Transit passes $2.6 billion budget that leans on CARES Act funds
Gov. Phil Murphy joined public and private officials Tuesday morning at a ceremonial groundbreaking on the $595 million Raritan River Bridge replacement project. Bridgewater Courier News
Despite anticipated revenue losses in the hundreds of millions, NJ Transit is trying to salvage the growth, investment and progress it has made in recent years by increasing its budget 10% for the coming year — a decision made possible thanks to a shot of federal stimulus money.
Some $955 million in various CARES Act funds are making up for the roughly $860 million revenue loss anticipated from decreases in ticket sales, commercial revenue and the state operating subsidy that usually carries the operating budget. About $361 million of NJ Transit's stimulus funding was already spent in fiscal year 2020, which ended in June.
But without that federal stimulus for next year's budget, NJ Transit CEO and President Kevin Corbett said it's uncertain how the agency will fill revenue gaps as it considers possible efficiencies in the coming year.
"You do see major cities are coming back, and for us that New York ridership, as you heard us say. Our intrastate is up about 70% on bus, and we see traffic picking up on the rail between stations, but going into New York" hasn't returned as quickly, Corbett said. Cost-cutting measures, like reducing service, could be detrimental because the reliability would diminish and crowding could increase, making it less attractive to returning customers, he added.
"There's a lot of gray area, but right now we’re going to continue on in our labor agreements and providing service," Corbett said.
A new revenue stream could be coming from the New Jersey Turnpike Authority, according to a letter from Transportation Commissioner Diane Gutierrez-Scaccetti, that would help offset future budget holes. That money, which would be funded from the toll hikes approved this year, was expected to start this budget season with $375 million, but Corbett said an agreement hasn't been reached on it yet.
Board member James D. Adams was the lone dissenting vote on the $2.637 billion budget, saying he could not support it because of the little time the board received with the materials and other issues with the process.
"I would have expected to have more dialogue with the staff and working sessions," Adams said. "There were no budget options presented and, like I said, no working session, but what was most challenging to me: The capital-to-operating transfers remain the same, which I am fundamentally opposed to."
He also noted that $120 million in federal CARES funds was not allocated in this budget cycle and could have been used to cut down the raid on capital funds.
Other members echoed Adams' concerns but acknowledged they would still vote in favor, given the difficult budgeting year amid the coronavirus and as the state delayed its budget process.
"It is my full hope and expectation that the level of clarity and participation of future budgets will be intense and that the kind of participation that I think my colleagues are speaking to will be present," said Cedrick Fulton, who during Wednesday's meeting was named by board Chairwoman Diane Gutierrez-Scaccetti to be vice chair. A vote on that will take place at next month's meeting.
Here is an overview of some anticipated revenue figures for the coming year:
- Farebox: $374.6 million, down 62% from $985.8 million last year.
- Commercial: $82.0 million, down 30% from $117.5 million last year.
- State operating subsidy: $386.1 million, down 15.6% from $457.5 million compared with last year, though due mostly to the shorter fiscal year when the state budget was pushed back three months.
Here are other noteworthy items in the budget this year:
- The practice of transferring capital funds to the operating budget is expected to continue at about the same amount as last year, $460.8 million, though still down from two years ago when it was $493 million.
- NJ Transit is still trying to fill positions across the agency, with an anticipated 408 jobs expected to be added this year, which would bring the agency’s employment to 12,269. Of those new positions, bus and rail would see the largest number of hires, at 254 and 66, respectively, but the information and technology department would see the largest percentage increase (12%).
- More than $1.4 billion in capital improvement projects are also continuing this year, as part of the five-year capital plan that also passed Wednesday. Those projects include constructing the Raritan River Bridge, Portal North Bridge, positive train control software installation and testing, purchasing new buses and trains, and a series of smaller cosmetic and repair projects at Newark Penn Station and stations around the state.
Joseph Clift, who spoke during the public speaking session, said he would expect there to be more accountability figures in the budget to measure the success and efficiency of investments.
"Setting smart — instead of amorphous — goals" needs to be considered, Clift said, adding that there should also be "specific measurable, achievable, relevant time goals."
Colleen Wilson covers the Port Authority and NJ Transit for NorthJersey.com. For unlimited access to her work covering the region’s transportation systems and how they affect your commute, please subscribe or activate your digital account today.