With state funding sinking, New Jersey Transit needs a new dedicated revenue stream to support operations, a public policy group urges.

The Fund for New Jersey released a new report noting that NJ Transit has been forced to use a combination of fare increases, federal funds and New Jersey Turnpike revenue to offset a severe drop in state support. As recently as the early 2000s New Jersey’s general fund contributed roughly $350 million toward NJ Transit’s operating deficit, which dropped by 90% to $33 million for the 2016 fiscal year, according to the group’s analysis. NJ Transit gets only 1.3% of support from dedicated taxes compared to nearly 50% or higher that public transportation systems in Philadelphia, Chicago, Los Angeles and can depend on, the report notes.

With an annual budget gap now at $1.1 billion, the Fund for New Jersey recommends NJ Transit receive tax revenues from motor vehicle licenses and registrations along with real estate transactions or business payrolls. This setup would be similar to how New York’s Metropolitan Transportation Authority is funded, according to the report.

NJ Transit received $295 million annually from New Jersey Turnpike Authority tolls in a recent three year-period to cover part of the operating deficit and $204 million for the 2018 fiscal year. The report said that Turnpike revenues should be earmarked for NJ Transit capital improvements rather than its operating budget.

"Drivers might be surprised to find out that the tolls they pay on the New Jersey Turnpike have become a major component of the transit agency’s annual operating budget," the report said. “Allocating Turnpike revenues to NJ Transit regular operations both masks the budget gaps and diverts funds that could be used appropriately for NJ Transit capital improvements.”

The press offices for NJ Transit and Gov. Chris Christie did not immediately respond for comment on the Fund for New Jersey report. The Princeton-based advocacy group issues grants to help aid solutions to problems in the state.

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