Senate Majority Leader asks about NJ Transit Board involvement in budget, capital-to-operating transfers, status of Customer Advocate

Trenton – Senate Majority Leader Loretta Weinberg (D-Bergen) issued the following statement and series of questions prior to Thursday’s Senate Budget and Appropriations Committee hearing on the NJ Transit budget, saying that: “NJ Transit continues to face unique challenges arising from the pandemic, but there are still vital long-term concerns to address. Hopefully NJ transit officials will answer these questions during the committee meeting.

“First is the question of governance. The Legislature passed a NJ Transit reform law in 2018, which was meant to address the structural problems with the corporation. To avoid the cronyism and waste of the Christie Administration and its domination of corporation staff and priorities, we sought to empower the Board and to create a Customer Advocate. To date, I do not believe a replacement for Stewart Mader has been named.

“I would also ask how much input the Board had on this budget request. The law requires the Administration Committee of the Board to work on key financial items, including budgets. Did the Administration Committee work on this budget request, and did the full Board participate in a discussion of the request prior to approval?

“I am concerned with NJ Transit’s operational budget. It seems a little strange to me to decrease the state subsidy while there remains a capital-to-operating transfer and a raid of the Clean Energy Fund. The federal relief NJ Transit is receiving is meant to be used to cover revenue shortfalls, but this relief is also being used to decrease the state subsidy. This creates the potential for a fiscal cliff when the federal funds run out.

“Much has been said about the Turnpike Authority’s agreement to transfer up to $525 million to NJ Transit each fiscal year. However, this figure does not cover the shortfall which would be created if the transfers and diversions ended. I am hopeful that we will find a stable permanent funding source for NJ Transit. Several options have been discussed publicly. Stable funding would allow NJ Transit to plan better year to year, and would end its over-reliance on farebox revenues.

“Capital expenditures are also a concern. The projects outlined in the capital plan and strategic plan released last year are not fully funded, and I am not sure which projects are real priorities and which projects will not be funded. Many others have noted that NJ Transit is not on track to electrify its bus fleet in line with the carbon emission goals set by the Governor and the Legislature. NJ Transit is not the first transit agency to look to electrify, and I hope that we will be able to use the lessons learned elsewhere to accelerate our own program.

“There is also potential federal legislation on the horizon; President Biden laid out a proposal for new infrastructure programs. I am concerned at the pace of planning and design at NJ Transit. It would be a safe guess that ‘shovel ready’ projects will be prioritized by federal administrators. I hope NJ Transit is taking the steps needed to take full advantage of these federal dollars, and if they need support, I encourage them to ask the Legislature.

“The Gateway Project is an obvious need, but other new-capacity projects, like the Hudson Bergen Light Rail northern extension, should be priorities. President Biden’s proposal laid out funding for bus electrification, rail electrification, and projects which would increase transit capacity. This is an opportunity we should not allow ourselves to miss; I do not think any of us want to see NJ Transit sent to the back of the line as other transit agencies advance their ready-to-go projects.

“Many of my constituents rely on NJ Transit, not just to get to work but to get to stores, the doctor, or other daily needs. I am a true believer in transit, both as a convenient and cost-effective transportation option, and as the centerpiece of an environmentally sustainable future. I am committed to improving NJ Transit service and look forward to passing a budget which guarantees those improvements.”

###

Senator Weinberg’s specific questions:

Governance/Budget Drafting: 1. Was this budget request developed with the Board’s Administration Committee? 2. Did the Board review and approve this request? How much time elapsed between the presentation of the request to members and their vote? 3. Does the line item for Salaries and Wages (page D-386 of the Governor’s Budget Proposal) include a salary for a Customer Advocate? Has there been a Customer Advocate since the departure of Stewart Mader?

Pandemic Response: 1. Has NJ Transit had success in getting its public-facing workers vaccinated? 2. Is DOT or NJ Transit actively involved in the statewide vaccination campaign? Transit agencies elsewhere have been connecting vaccine-eligible residents with free transportation; some states are putting their “megasites” along transit routes. Is NJ Transit or DOT involved in anything like this? 3. How much of the federal funding in this budget request is meant specifically for pandemic-related costs, as opposed to plugging revenue losses? 4. Has the pandemic altered any of the assumptions made in the capital plan and strategic plan released pre-pandemic? Are there capital projects you intend to alter or redesign based on the experience of the past year?

Operational Budget: 1. It is understandable that Transit would use federal relief funds to cover revenue losses. However, Transit’s budget request reduces the state subsidy while maintaining capital to operating transfers and the ongoing raid of the Clean Energy Fund. Are capital to operating transfers a permanent fixture of Transit budgeting? Is there a plan to eliminate these transfers? 2. The Turnpike Authority is in the process of entering into an agreement with the State to divert up to $525 million per year to NJ Transit. What is the intended use for these funds? 3. My office reached out to DOT and DEP about the Transportation and Climate Initiative in 2019, and at the time it was indicated that the State was not going to participate in TCI’s carbon permitting program. NJPP recently put out a report that noted that if NJ had joined, the expected revenue for NJ would be $232 million in 2023 alone. Is this something DOT is revisiting? 4. We are all seeking a stable funding source for NJ Transit. Do you have any thoughts on what an appropriate source would be, or perhaps what an appropriate revenue target would be?

Capital Budget: 1. Which projects outlined in your capital plan are funded, and which are not? How does NJ Transit propose to bridge the gap between their capital plan’s aspirations and the funding made available in their funding request? 2. As many have noted, Transit’s bus electrification plan falls short of the goals set by the Legislature and the Governor. What are the barriers to bus electrification? Why is Transit failing to keep up with peer agencies, such as the MTA? 3. Is NJ Transit prepared to meet the opportunity presented by President Biden’s infrastructure proposal? How many capital projects are “shovel ready?” Specifically, does Transit have the capacity in planning and design to respond to new federal programs, which might have new or different eligibility guidelines than current programs? 4. On the same topic, it is widely expected that the Gateway Project and its constituent pieces would be addressed in a federal infrastructure bill. Are there any other new capacity projects that are “shovel ready” or close to it? I am particularly interested in our state’s light rail projects, especially the northern extension of the Hudson Bergen Light Rail. 5. President Biden’s infrastructure plan outlined support for rail electrification. Some parts of the NJ Transit rail network are already electrified, but Transit still uses and purchases dual-mode locomotives, as no line is fully electric. Does NJ Transit have any plans to electrify more of its rail network? If federal funding provided for an expedited transition, would a change to full-electric locomotives be desirable?