Flush with cash, NJ Transit plans upgrades

JOHN REITMEYER, BUDGET/FINANCE WRITER | JULY 29, 2022 

NJ Spotlight News

An NJ Transit worker at Hoboken Terminal. NJ Transit is set to spend $176 million in state funding on Hoboken Terminal.

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New Jersey Transit is significantly increasing its annual spending on capital projects after getting big cash infusions from the state and federal governments.

Under an updated plan approved by NJ Transit’s board earlier this month, the agency is now budgeting more than $2.6 billion for capital projects during the fiscal year that ends June 30, 2023.

That adds more than $1 billion to last year’s approved total for capital appropriations, which came in just under $1.6 billion, according to agency budget documents.

Helping to pad NJ Transit’s capital resources is more than $800 million in funding that Gov. Phil Murphy and lawmakers just earmarked for mass-transit upgrades following an unprecedented surge in state tax collections.

Funding from the massive federal infrastructure bill enacted by President Joe Biden late last year is providing another nearly $200 million, according to the budget documents.

Major upgrades to rail stations

Among the projects that will benefit from the spending increase are major upgrades to rail stations throughout the state. Investments in rail storage and bus garage modernization will also get a boost.

Still, a $2.75 billion operating budget, just approved by the transit agency board, continues to use more than $360 million from capital resources to balance annual spending. It also relies on an $82 million diversion from the state’s Clean Energy Fund. This administration and previous governors and lawmakers have repeatedly tapped that fund to help cover NJ Transit costs.

Bus and rail riders are once again being spared fare increases, something Murphy, a second-term Democrat, has made a top priority throughout his tenure.

“This budget is a roadmap for how we will maximize our resources and spend every dollar wisely to deliver the world-class transit service New Jersey residents expect and deserve,” said Kevin Corbett, who serves as NJ Transit’s chief executive officer.

The approval of NJ Transit’s capital and operating budgets for the 2023 fiscal year comes just weeks after Murphy and lawmakers enacted the state’s own $50.7 billion annual budget for the same fiscal year.

The new state budget increases overall spending by nearly 10% year-over-year, and it also dictates how another more than $2 billion in federal pandemic-relief funding will be spent through  June 30, 2023.

The new state budget includes a $100 million subsidy for NJ Transit, the same amount budgeted for the prior fiscal year.

Still not on sound fiscal footing

However, NJ Transit will continue to operate without the type of dedicated state revenue that transportation advocates have long said is desperately needed to put the agency on solid fiscal footing and to ease pressure on rider fares.

In addition to helping fund a big increase in annual spending by the state, an unprecedented revenue surge allowed for more than $5 billion in additional state funding to be credited to an off-budget account that was set up to advance the paying down of bonded debt or to fund new capital projects on a pay-as-you-go basis to prevent the state from having to issue additional new debt.

NJ Transit is getting an $814 million share of those newly appropriated debt-relief funds to support its planned capital spending.

But a closer look at NJ Transit’s budget documents indicates the agency continues to rely on federal pandemic aid to sustain its annual operating budget amid the ongoing health crisis. That includes about $480 million during the 2023 fiscal year.

It remains unclear how the agency — without any dedicated state revenues — will address a “fiscal cliff” that’s looming in the 2026 fiscal year, which is when budget documents indicate the bulk of the remaining federal aid is expected to run out.

While testifying before the Assembly Budget Committee earlier this year, Corbett said that weekday bus and rail ridership was rebounding in the wake of the worst months of the pandemic.

Why the optimism?

And after several lawmakers raised concerns about the approaching fiscal cliff, Corbett suggested there were reasons for optimism. He pointed to recent population growth, an ongoing trend toward more transit-oriented development in many communities and pressure that high gas prices may be putting on motorists.

“People have gone back to their cars, and maybe are a little slower in moving back to transit because of the pandemic. But I think, if you put all of those factors together, we’ll be seeing that ridership going back to 100% sooner than I think some people believe,” he told lawmakers during the hearing.

According to budget documents, $250 million from the state debt-relief funding has been set aside to pay for upgrades at the Walter Rand Transportation Center in Camden. Another nearly $200 million is funding work at Newark Penn Station.

Among the other stations and terminals that will get a share of the state funding are Hoboken Terminal​, $176 million; New Brunswick Station, $49 million; Bloomfield Station​, $48 million; Brick Church Station in East Orange​, $33 million; and Roselle Park Station, $27 million. Another $40 million of state dollars will fund right-of-way upgrades in Clifton.

Meanwhile, $191 million in federal funds from the Infrastructure and Jobs Act will pay for agencywide repairs and resiliency and design projects; this includes modernization of rail yard and storage facilities and bus garages, among other projects.

In addition to the extra state and federal allocations, NJ Transit’s capital spending will also continue to be supported by cash provided annually by the state Transportation Trust Fund, as well as other federal monies, including from the Federal Transit Administration.

Among other capital investments set to be funded during the 2023 fiscal year are improvement to bus fareboxes and to the faregates on light rail lines, officials said.

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published this page in News and Politics 2022-07-29 02:27:16 -0700