N.J. Transit faces challenge with looming federal deadline

New Jersey Transit risks further fiscal troubles ahead if it fails to meet a December deadline for new federal safety standards.

The commuter railroad, which has struggled in recent years with budget shortfalls, must meet a Dec. 31, 2018 deadline to install positive train control technology or risk fines from the Federal Railroad Administration. NJ Transit executive director Kevin Corbett told reporters Monday after an assembly budget committee hearing that the agency may request that the FRA push its Dec. 31, 2018 deadline to install the PTC technology off until 2020.

Joe Tabacca/BLOOMBERG NEWS

“It’s called the alternative plan and we are making that evaluation, but if we are going to go that way, we’ll have to move fairly quickly on that,” said Corbett of the possibility for a deadline extension for the technology, which utilizes communication based technology designed to prevent train-to-train collisions and derailments. “We are committed to making sure the FRA is comfortable and that we are in a position with the FRA to operate full service.”

The FRA press office did not immediately respond to a request for commentTransit seeking a deadline extension. The FRA announced in late March it was taking a “proactive approach" under the direction of U.S. Transportation Secretary Elaine Chao to ensure that railroads meet the PTC deadline by holding meetings with the 41 railroads subject to the mandate.

The FRA website says legislation passed by Congress in late 2015 includes the possibility of extending the Dec. 31, 2018 deadline to no later than New Year’s Eve of 2020 if a railroad “completes certain statutory requirements” needed to obtain extra time. The federal agency notes that it has provided roughly $925 million in grants to support implementing PTC systems and issued a nearly $1 billion loan to the Metropolitan Transportation Authority to install the technology on the Long Island Rail Road and Metro-North Railroad.

NJ Transit refinanced outstanding revenue bonds in early 2017 through the New Jersey Economic Development Authority to combat a $12 million budget hole. The agency said at the time of the deal that savings from refinancing would help enable the implementation of PTC by the December 2018 deadline.

NJ Transit’s safety infrastructure was put in spotlight following a fatal train crash in Hoboken on Sept. 29, 2016 that killed one woman. The New Jersey State Senate held hearings three weeks after the accident to examine the agency’s safety technology and with lawmakers stressing the need for implementing PTC to prevent future tragedies.

New Jersey Gov. Phil Murphy has proposed adding $242 million to NJ Transit to help stabilize the agency’s finances as part of his $37.4 billion budget plan. His NJ Transit fiscal plan outlined in late March includes $142 million to combat budget shortfalls experienced under his predecessor, Chris Christie, as well as $21 million to upgrade train and bus facilities. He said $28 million of the budget increase would rectify structural passenger revenue shortfalls caused by “unrealistic” assumptions.

Murphy, who mandated an audit of NJ Transit in January, has criticized a sharp drop in state support for the mass transit system from $348 million in the 2009 fiscal year under former Gov. Jon Corzine to $141 million in the current 2018 budget. The Democrat also wants to end past practices of diverting funds from New Jersey Turnpike tolls to fund NJ Transit operations. A September 2017 report by the Fund for New Jersey said NJ Transit received $204 million from turnpike tolls for the 2018 fiscal year to address part of its operating deficit.