While half of NJ Transit’s operating budget comes from rider fares, many other peer agencies rely on approximately 30 percent from that revenue source, experts said.
TRENTON – The transit experts testifying at Thursday’s two-hour senate hearing made one thing absolutely clear: Lawmakers have to come up with a better way to fund NJ Transit if the agency has any chance of improving.
How to do that is another matter.
Senators repeatedly asked the four nonprofit transit advocacy and research group representatives what they recommended as solutions to the funding problem for the agency.
Year after year, NJ Transit uses capital funds to fill operating budget holes, relies on inconsistently sourced state subsidies, and has increased riders’ fares as service has deteriorated.
Thursday’s hearing was the second held by the committee, which follows one that took place last month in Hoboken where members of the public offered comments. Additional hearings and site visits are expected to take place throughout much of the winter.
The panel of experts, which included representatives from the Tri-State Transportation Campaign, Regional Plan Association, New Jersey Environment Federation and ChargeEVC, offered examples of how other states fund their transit organizations with outside revenue. This included:
- “Value capture,” which is optimizing valuable real estate to generate revenue by taking in some of the money that public infrastructure generates for private landowners, like developers who build near NJ Transit rail stations.
- Using taxes from sales, property, business, utility or income.
- Transportation Carbon Initiative funds, a coalition of states backing a policy initiative to cap emissions, and auction off carbon credits to fuel suppliers and reinvest money in efforts to improve sustainability through transit and technology.
Senate President Steve Sweeney was tight-lipped about what potential funding sources the legislature might lean toward when drafting future legislation, saying all the options are on the table.
“They’ve come up with a lot of ideas. They’ve shown us how a lot of places do it, and obviously we’ll look at those and we have our own ideas that we’re working on,” said Sweeney, who formed the select committee investigating NJ Transit in October. “The goal is to have suggestions in place before the governor does his budget,” which is presented in February.
Janna Chernetz, the New Jersey director of the Tri-State Transportation Campaign, said the legislature should consider a number of dedicated future revenue streams.
“We want to diversify, we cannot be relying on one particular revenue stream,” Chernetz said. “Right now NJ Transit relies heavily on passenger fares and that is very burdensome because when there is a funding gap, they are the first and they are vulnerable to seeing fare hikes,”
About half of NJ Transit’s operating budget is funded through fare box revenue, Chernetz said, which is unlike many peer agencies where rider fares account for about 30% of the budget. Other money comes from the state, but it could come from different state revenue sources each year.
With more sound funding, the transit experts said their additional recommendations and service improvements would likely follow.
Those additional recommendations raised by the panel include:
- Focusing on improved bus transportation;
- Investing in sustainable technology like electric buses;
- Developing short- and long-term plans with benchmarks so the public knows when to expect changes and keep the agency accountable.
Sen. Loretta Weinberg, of Teaneck, said “clear reporting requirements” that “connects to a long-term vision” is lacking at the agency.
“I have reached out to both NJ Transit and the governor’s office over the least number of months on that very subject and hopefully with a more robust NJ Transit board then we’ll be able to see some progress in that area,” said Weinberg.
Weinberg has been in a back-door negotiation with Gov. Phil Murphy over filling the nine vacant board seats.
“If the public understands that something is going to take three months, whereas something is going to take three years, that will help alleviate a lot of the misunderstanding around this,” she said.
Plan for the future needed
Preparing for the future needs to be part of the planning at NJ Transit, said Kate Slevin, of the Regional Plan Association.
Slevin said the region will be severely impacted if the deteriorating Hudson River rail tunnels have to shutdown for repairs before the new tunnel is built. A new tunnel is pitched as a key part of the Gateway program that has been held up by the Trump administration.
“Let us be clear, this shut down would be a economic calamity for which we are woefully unprepared,” Slevin said. “Right now we do not have a system that supports the growth that we want to see. … In the past few decades we’ve seen trips across the Hudson River grow by 100,000. We are not providing more service, we are providing less than we used to.”
Doug O’Malley, of the New Jersey Environment Foundation, said NJ Transit should expedite its procurement and roll out of an electric bus program. The agency is expected to have eight electric bus routes in Camden starting in mid-2021; by comparison, New York City will have more than 100 electric buses on the roads by that time, and a goal of all-electric by 2040.
“Right now, though, we are in the back of the bus and when we look at what NJT has done so far it is not measuring up. … Air pollution from our buses in our cities especially is incredibly deadly,” O’Malley said.
When asked about electric buses at this week’s board meeting, NJ Transit President and CEO Kevin Corbett said he has concerns about whether the battery life can last and if they will seat fewer commuters.
Sweeney, however, seemed swayed by the panel’s push for electric and said a good place to start with accelerating the move to electric could start with the $500 million bond the NJ Transit board approved yesterday. That borrowing plan, with bonds issued from the state Economic Development Authority, will allow the agency to buy 600 new buses and 17 locomotives in the coming years.
“If we’re borrowing $500 million, then we should start the transition (to electric buses),” Sweeney said.
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.
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