New Jersey Transit wants more aid to offset coronavirus revenue losses
New Jersey Transit is seeking additional federal aid to patch up financial hits from plummeting ridership and rising COVID-19-related expenses.
NJ Transit CEO Kevin Corbett sent a letter to New Jersey’s congressional delegation last week asking for $1.2 billion of new funding on top of $1.5 billion the public transportation network already received under the federal CARES Act. The agency is projecting a $2.6 billion budget deficit through the end of the next fiscal year in June 2021.
A coalition of U.S. mass transit systems that includes NJ Transit requested $32 billion of combined aid last week from the next round of stimulus funding out of Washington.
The $3 trillion Heroes Act legislation approved by the U.S. House of Representatives last Friday would allocate $15.7 billion in operating assistance grants for transit systems, but it faces dubious prospects in the Senate.
The House bill would net NJ Transit an estimated $993 million in base funding, according to Felicia Park-Rogers, director of regional infrastructure projects for the Tri-State Transportation Campaign. Park-Rodgers noted that the legislation would also enable NJ Transit to receive more funding from $4 billion in grants distributed to entities serving populations of 3 million or more.
Corbett said NJ Transit’s train and bus ridership have fallen 98% and 93%, respectively, since the COVID-19 pandemic began in March. NJ Transit is now anticipating fare revenue losses for the fiscal year ending June 30 of around $268 million and for this number to eventually rise to $1.07 billion over the next 14 months. It also expects to lose out on $110 million of advertising and lease revenues during this period.
“These revenue losses represent a staggering blow to NJ Transit’s ability to continue to deliver essential service, as well as to support the restarting of New Jersey’s and the overall region’s economy,” Corbett wrote in his May 12 letter. “The agency must be on sound fiscal footing and ready to restore full and robust service once the current COVID-19 dissipates and New Jersey’s and the region’s travel and transportation needs return to pre-COVID-19 levels.”
In addition to revenue losses, NJ Transit is incurring $10 million in added monthly expenditures to sanitize vehicles and stations along with supplying personal protective equipment. Corbett said these costs would rise as ridership increases.
Janna Chernetz, the Tri State Transportation Campaign’s senior director of New Jersey policy, said NJ Transit’s need for further federal assistance is compounded by the state’s fiscal challenges, which have been exacerbated by COVID-19. Gov. Phil Murphy’s original budget proposal in February, before the virus hammered the region, would have boosted NJ Transit funding by $132 million to a record total of nearly $600 million.
“We don’t know what funding is going to look like for New Jersey Transit post-COVID,” Chernetz said. “Everything is up in the air.”
NJ Transit’s state operating subsidy for the current 2020 fiscal year was set at $457 million. The agency is also receiving $211 million in diversions from the New Jersey Turnpike Authority and the state's Clean Energy Fund.
New Jersey extended the 2020 fiscal year by three months to Sept. 30 to account for COVID-19-related revenue losses and liquidity challenges from a later tax-filing deadline of July 15. State Treasurer Elizabeth Muoio has forecast a $10 billion revenue shortfall through the 2021 fiscal year compared to Murphy’s initial budget proposal.