Transportation, GOVERNMENT THAT WORKS
A Billion Rea$ons to “Restructure” NJ Transit
Garden State residents were greeted with headlines last week that the state’s public transportation agency, NJ Transit, is looking at a $1 billion operating deficit in 2026, with no clear path to fill the hole. For reference, the agency currently has a $2.75 billion annual operating budget, with significant subsidies from the state and Turnpike Authority.
They can’t say they weren’t warned.
In late March of 2020, just a few weeks into the COVID pandemic, GSI’s president Regina Egea warned that dramatic change was needed at NJ Transit, as the state was cashing a $1.25 billion check from Uncle Sam to maintain operations. She stated that the massive drop-off in ridership necessitated a change of course for the troubled agency, but also “an incredible opportunity however for NJT’s management to plan now for a more effective, customer driven NJT post COVID-19” by reforming work rules and adjusting outdated service patterns.
Those warnings fell on deaf ears. Just this week, NJ DOT Commissioner Diane Gutierrez-Scaccetti, who chairs NJ Transit’s board, announced that, two and a half years later, a restructuring analysis will get underway “very quickly.”
While the transit agency seems to have little appetite to renegotiate work rules, they may want to find some inspiration for reform from GSI’s 2021 report The Road to Equitable Transportation Policy in New Jersey: An Assessment of Cost Burdens, Gaps in Mobility and Recommendations for Reform, which explored transportation policy in our state and offered specific recommendations to enhance NJ Transit’s customer experience while putting the agency on a more stable financial footing. Among the key findings regarding current transit policies and structure:
- Reliance on the gas tax and toll revenue to fund the Transportation Trust Fund have created regional and socioeconomic disparities in who funds and who receives benefits.
- NJ Transit, the only statewide transit agency in the U.S., is not equitably meeting the needs of NJ’s diverse counties with its bias towards heavy commuter rail in North Jersey.
- The failure to modernize NJ Transit’s pre-1970 bus routes has resulted in “transit deserts” among regions that have seen significant population growth, particularly among senior citizens.
- The ongoing diversion of gas tax and toll revenue to NJ Transit and the Gateway project will present challenges for maintaining road infrastructure.
In addition to highlighting ongoing issues with how transit services are funded and delivered, the report offered some recommendations on key policy changes:
1) Provide mass transit with a dedicated revenue stream. Whether NJ Transit stays as one unit or two, mass transit in the state needs a reliable and dedicated revenue stream – most effectively from current taxes. NJT’s budget has been subject to swings in allocation according to the whims of Trenton politicians thus making long-term planning and operational improvements challenging.
2) Align New Jersey Transit (NJT) into two Agencies: North New Jersey Transit and South New Jersey Transit. No other state in the nation organizes mass transit operations on a statewide basis, and for good reason. The state’s two regions face very different realities. No matter what mass transit improvements there may be for South Jersey in the decades ahead, that region of the state will always be dependent on cars for basic travel. Since South Jersey is often an afterthought in state mass transit planning and financing, the region deserves independent standing with its own dedicated state mass transit agency. With steps taken to avoid two redundant bureaucracies, such an arrangement will bring the agency closer to the customers they serve and ensure equitable delivery of services.
3) Explore innovative alternative revenue mechanisms. There are a number of innovative options that one can consider in terms of funding sources for transportation systems. Possibilities include privatizing street parking spaces, to taxing box deliveries from online shopping retailers. Using multiple sources of revenue to support New Jersey’s transportation system provides a mix of revenue sources that would be most equitable and efficient given New Jersey’s diverse transportation systems and regional variation in services.
Among the many lessons we’ve learned since March 2020 is that transit agencies across the country that ignore fundamental transformations in our commuting and travel patterns are placing their very existence in peril. A failure to make fundamental reforms before COVID aid expires will be a complete abdication of leadership.