Saturday, July 24, 2021

NJ Transit’s 2022 budget a victim of ongoing federal funds fight with New York

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NJ Transit’s Kevin Corbett talks about the Morristown line

NJ Transit’s president and CEO Kevin Corbett learns experiences the ride as he commutes to Newark everyday on an NJ Transit train from Morristown.

The NJ Transit board could not pass a fiscal year 2022 budget at Wednesday night’s board meeting because of a stalemate with New York over splitting federal funds the agency needs to support its spending plan.

Instead, the board extended its fiscal year 2021 budget for the time being with one dissenting vote from board member James D. Adams.

Adams voted against last year’s budget because the board was not consulted early enough on the plan’s draft and because not enough was done to slash the capital-to-operating transfer. For these reasons and because he said agency officials did not properly consider an alternative budget plan he devised, Adams repeated his no vote.

“(This year) I really expected that the board would be a little bit more involved in the budget process … and that didn’t happen the way I thought it should have,” Adams said.

NJ Transit President and CEO Kevin Corbett said the agency will continue at last year’s budget level until federal funding is secured.

It’s unclear when the agency must pass a FY22 budget, with or without the aid. If the latter situation occurs, Corbett said that would require significant state funds to fill the gap or major cuts to service.

“It’s sort of unimaginable that there would not be a rational resolution to this dispute,” Corbett said, adding that if “the state was not able to backfill any gap, including lost revenue … we’d have to look at significant cuts.”

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NJ Transit is fighting to secure about $3.5 billion out of $14.2 billion from two federal aid packages – the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) and American Rescue Plan Act (ARPA). The money cannot be released until an agreement is reached between New Jersey, Connecticut and New York on how to split it.

New Jersey and Connecticut want to use federal formulas to split the funds, but New York has proposed its own method that favors them by $700 million, according to Metropolitan Transportation Authority President Pat Foye. New York’s proposed strategy to split the money does not align with Congress’s intent for how to disburse the aid, according to several U.S. senators.

The Federal Transit Administration asked states to get their agreements finalized before July 20 so agencies could access those funds in the coming weeks. That date, however, came and went. Now, the earliest those monies could be disbursed to the agencies – assuming they come to an agreement soon – would be late 2021.

“The proper allocation of these funds is critical to NJ Transit’s finances so that service levels can be improved upon and restored as ridership continues to increase, without passing any costs onto commuters,” said Michael Zhadanovsky, a spokesman for Gov. Phil Murphy.

NJ Transit’s board also on Wednesday approved changes to the five-year capital program that agency officials unveiled last year, bringing the total plan to $15 billion, down from $17 billion. When it was presented last year, some $5.7 billion in projects were unfunded, now that’s down to $4.8 billion.

Corbett said the decreases are attributed to projects that were completed. Some of the new projects included in this plan are $47 million for Perth Amboy Station improvements, $62 million of phase one track work to prepare for the Lackawanna Cut-off project, and $93.9 million in repairs to signal and power at Hoboken Yard.

Meanwhile, the capital fund is expected to lose $360.8 million this year in the annual diversion to the operating budget – a nagging problem for the last three decades that can’t seem to get fixed. That problem persists, in part, because a dedicated funding stream for the agency has never materialized, an issue that has led to outcry but no solution.

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Concerns over the transfers and lack of reliable funding were raised by several public speakers, including Doug O’Malley, director of Environment New Jersey, who said this “hobbles the ability of the agency to deal with the needs of capital expansion and it’s also critical to acknowledge this is not sustainable.”

Shanti Narra said securing dedicated funding is a top issue for many board members.

“Many of us are using every opportunity we have to talk to the legislators to urge them to focus on this issue for the long-term health of transit in this state,” she said.

One additional revenue stream the agency will be receiving this year is from an agreement signed June 30 between the New Jersey Treasury Department and New Jersey Turnpike Authority. This will send NJ Transit $350 million this fiscal year, and different annual amounts totaling $3.221 billion through 2028.

Colleen Wilson covers the Port Authority and NJ Transit for 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. 

Email: [email protected] 

Twitter: @colleenallreds 

Source: Asbury Park


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