Upcoming Fiscal Cliff for NJ Transit Exposes Need for Stable Dedicated Funding; Gov. Murphy and Legislative Leaders Shouldn’t Wait for the Cliff & Work To End the Raids

Newark – At the April 19th board meeting of the NJ Transit board, chaired by the NDOT Commissioner, heard as part of its agenda, a full analysis of the FY24 budget and the next three upcoming budget years are required to be transmitted to Governor Murphy and the NJ Legislature. This requirement comes through the 2018 NJ Transit Reform bill, which provides a sobering analysis of what’s to come. With a projected budget shortfall in FY25 of up to $119 million, $917 million in FY26 and $957 million for FY27, the fiscal cliff is coming for NJ Transit. Note that these projected funding shortfalls include the ongoing NJ Transit funding raid of $330 million from capital to operating budget and the $70 million Clean Energy Fund budget raids in Gov. Murphy’s FY24 proposed budget.

Doug O’Malley, director of Environment New Jersey, spoke at the NJ Transit board hearing and delivered this following statement:

“The transit death spiral didn’t occur after the depths of the pandemic because of the extraordinary rescue efforts by the federal government. All transit agencies are facing similar fiscal cliffs and the ending of federal funding, but NJ Transit is uniquely vulnerable because of the lack of dedicated funding for NJ Transit. we have always been overly vulnerable to the whims of the fare box and annual budget negotiations – that’s a big reason why NJ Transit had adopted the backwards fiscal practice of raiding its own capital budget – this year coming in at roughly $330 million and the ongoing raids of the clean energy fund.

Governor Murphy committed to not raising fares for straphangers in this year’s fiscal budget which as he cites is important because of the body blow of the Christie era fare hikes that raised fares for some more than 45%. Obviously it’s unknown what the next year will bring, but projections show an budget gap of more than $100 million and then opens to a yawning gap of more than $900 million in FY26.

NJ Transit will not be to use fare hikes and service cuts to escape the fiscal cliff, and any attempts to fix NJ Transit’s budget solely on the backs of straphangers will create a neutron bomb on transit useage.

In 2015, in an attempt to make up a more than $100 million budget hole, this NJ Transit board approved a 9% fare hike and cut more three bus routes. This followed the historic transit hikes of 2010 and service cuts. those are not fun meetings for board members to attend. Which bus routes and train routes will be on the chopping block? Which straphangers will we say no to? And those riders often don’t come back.

Decamp bus riders are the canary in the coal mine – Decamp riders now have a plan b. but transit riders either don’t have another option or as we saw during the Juneteeenth NJT wildcat strike for rail, without NJ Transit, we will see increased traffic on our roads. We need to fund NJ Transit like the public good that is – no one questions that we fund ongoing roads across the state.

There were real costs to straphangers from those service cuts and fare hikes eight years ago, but they seem quaint now compared with the current fiscal cliff.

Obviously, we support efforts to work to get more federal funding, but the fiscal cliff is only getting closer. it’s time for both Governor Murphy and legislative leaders to work to come together to hammer out a long-term dedicated funding source for NJ Transit. It’s spring – it’s baseball season and cherry blossom season in Branch Brook Park and it’s time for budget hearings in Trenton. There can be no wish fulfillment with NJ Transit funding – we urge the Governor and legislative leaders to work on long-term dedicated funding now, not when the fiscal cliff is upon us.

A long-term dedicated funding source is the only solution to our incoming fiscal cliff. in the days before the pandemic hit in February 2023, then Senate President Sweeney and former Majority Leader Weinberg proposed a potential dedicated funding. The pandemic changed everything two weeks later, but we shouldn’t let the societal changes in work patterns be a death wish for transit. We need increased state funding for NJT (only 5% in the budget), we need dedicated funding for NJT and a plan that will end the ongoing raids to NJT capital funds and the NJ Clean Energy Fund.”

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