NJ Transit is facing a fiscal cliff

Bombardier NJ Transit train

NJ Transit is facing a fiscal cliff in the coming years, with projected budget shortfalls of up to $119 million in FY25, $917 million in FY26, and $957 million in FY27.

These projections were discussed at the April 19th meeting of the NJ Transit board, where a full analysis of the FY24 budget and the next three upcoming budget years were presented, as required by the 2018 NJ Transit Reform bill.

The 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.

“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 usage,” said Doug O’Malley, director of Environment New Jersey, who attended the meeting.

In the past, the NJ Transit board approved a 9% fare hike and cut more than three bus routes in an attempt to make up a budget hole of more than $100 million in 2015.

These historic transit hikes of 2010 and service cuts have had real costs to straphangers, and any similar actions now will have an even greater impact. Decamp bus riders are the canary in the coal mine, and without NJ Transit, there will be increased traffic on the roads.

O’Malley urged Governor Phil Murphy and legislative leaders to work together to hammer out a long-term dedicated funding source for NJ Transit.

This funding source is the only solution to the 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 source. The pandemic changed everything two weeks later, but NJ Transit should not be a death wish for transit. Increased state funding for NJT and a plan to end the ongoing raids to NJT capital funds and the NJ Clean Energy Fund are necessary.

“We need to fund NJ Transit like the public good that is – no one questions that we fund ongoing roads across the state,” said O’Malley. “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.”

O’Malley said the mass transit system needs increased state funding, dedicated funding and “a plan that will end the ongoing raids to (NJ Transit) capital funds and the NJ Clean Energy Fund.”

The Legislature and Murphy administration diverted well over $1.7 billion away from the Clean Energy Fund to pay for other government operations, angering advocates who noted that the raids continued even as the state expects record high tax collections and is flush with billions in unspent federal aid.

Drew Tompkins, coordinator of the Jersey Renews coalition, a group of more than 60 organizations supporting the state’s shift to cleaner energy, expressed extreme disappointment with the diversions last year, when there was a record $6 billion state surplus, and lawmakers adopted the $50.6 billion 2023 fiscal year budget.

“While using an opaque budget process that allowed for no public input, legislators and the Governor chose to continue unnecessary raid that will limit our state’s ability to transition to a green economy and support low- and moderate-income communities throughout the state, even though there was a historic budget surplus,’’ Tompkins said.

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