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Murphy's Latest EO Seeks to Get NJ Transit Back on Track (and on Time)

Governor wants nothing less than full-scale financial and operational audit on way to organizational overhaul

murphy signing NJT EO
Murphy signing order inside NJ Transit station in Summit surrounded by bipartisan group of state and local elected officials.

Continuing with a flurry of executive orders issued since he took office last week, Gov. Phil Murphy's latest EO targets New Jersey Transit. The troubled agency will undergo a comprehensive financial and operational audit over the next few months as the first step in an organizational overhaul envisioned by the new governor.

The full-scale audit of NJ Transit follows through on a promise Murphy made on the campaign trail last year, as commuters were struggling through what was known as the "Summer of Hell" thanks to ongoing repair work at New York's Penn Station that caused daily train diversions and frequent delays.

Just before signing the executive order yesterday at the NJ Transit station in Summit — one of the places where commuters dealt with those the time-consuming diversions — Murphy said the audit will provide a "roadmap for where reform is most desperately needed."

"Our goal must be a new New Jersey Transit that will begin with a new culture in its management, and a new commitment in Trenton to getting this system right," Murphy said.

While lawmakers from both parties praised Murphy yesterday for launching the audit — his Republican opponent in last year's gubernatorial contest, Kim Guadagno, had called for a similar review — it remains to be seen just how much Murphy's administration will be able to accomplish through the executive order.

Sidestepping a fare hike

Former Gov. Chris Christie was faulted by transportation advocates for hiking fares on NJ Transit customers even as the agency also hired and gave raises to many Christie allies, but it's unclear whether the auditors will find enough inefficiencies within the agency to prevent another possible fare hike. Murphy signaled yesterday that he would do everything possible to avoid doing so.

Also uncertain is whether Murphy will be able to gather enough resources in his first state budget, which is due next month, to significantly prop up one of the nation's busiest rail operations. A notice issued yesterday by Wall Street credit-rating agency Moody's Investors Service foreshadowed an increasingly tight budget outlook for the state's upcoming 2019 fiscal year.

And even with more robust state support, it will also take strong cooperation — and more funding — from the federal government to upgrade aging infrastructure shared by both NJ Transit and Amtrak that is often the cause of the long delays faced by daily commuters.

"We cannot turn around everything overnight, but today we begin the hard work of restoring NJ Transit," Murphy said yesterday, suggesting his ambitious reform effort could take time.

The NJ Transit tangle

Once viewed as one of the nation's best mass-transit agencies, NJ Transit struggled under Christie's eight-year leadership as state budget funding was either cut back or replaced with monies raided from other sources, like the New Jersey Turnpike Authority and the state's Clean Energy Fund. Christie also continued a practice of using some funds earmarked for capital improvements to help sustain day-to-day operations. Fares paid by NJ Transit commuters were also raised twice during Christie's tenure; a 25 percent increase that went into effect in 2010, and another 9 percent increase enacted in 2015.

Christie, in 2010, also canceled the construction of a long-planned trans-Hudson rail tunnel that was due to receive federal matching funds, citing the potential for expensive cost overruns. While that tunnel, known as ARC for Access to the Region's Core, had been scheduled to open later this year, eight years after the cancellation, the state is now trying to convince President Donald Trump's administration to help pay for the successor Gateway tunnel project and other planned infrastructure upgrades amid frequent breakdowns and delays.

State lawmakers have also been holding a series of bipartisan hearings on NJ Transit in the wake of a fatal train accident that occurred in 2016 at Hoboken Terminal. The official cause of that accident is still under investigation by federal transportation officials.

A top campaign issue

Murphy made reforming NJ Transit a top issue in the gubernatorial campaign, and last month he announced that former Turnpike Authority executive director Diane Gutierrez-Scaccetti was his pick to lead the state Department of Transportation. She has not yet been confirmed by the Senate, and Murphy has yet to identify his choice to lead NJ Transit itself, though that announcement could come soon.

For the audit that was unveiled yesterday, Murphy said his goals include evaluating the agency's current funding, leadership structure, and customer-service practices. He also said the review would look at ongoing relations with Amtrak and the implementation of positive train control, a key safety initiative that NJ Transit is in the process of bringing online. The audit may require the state to hire numerous consultants, and it is expected to take three to four months to complete.

"The public cannot be left waiting for answers, and neither will I," Murphy said as he greeted commuters passing by a podium set up inside the station for the signing.

"The public deserves a true accounting for how this once model agency has fallen so far, so fast," he went on to say.

Senate Majority Leader Loretta Weinberg (D-Bergen) praised Murphy yesterday for launching the audit less than a week into his tenure, saying it's an important step for a state with an economy that relies heavily on reliable mass transit.

"I want to thank you again for being here, and for putting a further spotlight onto something that is so important to the economy of New Jersey," she said.

Assemblywoman Nancy Munoz (R-Union) also pointed to the economic impact that mass transit has on the region, including housing prices. She suggested the housing market in north Jersey is sustained in part by the direct link NJ Transit provides to New York City, benefitting commuters and noncommuters alike.

"For many in the middle class, the working class, this is one of their number one assets, their homes," said Munoz, a longtime resident of Summit.

Afterward, Murphy was asked by reporters if the results of the audit come back uglier than expected, can NJ Transit commuters be confident that they won't see another fare hike. He did not definitively rule one out, but said he'd be "hard pressed" to discover that a fare hike would be needed.

"I just can't believe, given how inefficiently this organization has been run … I'd be hard pressed to think that that's the conclusion," he said. "I think we have to believe that there are extraordinary inefficiencies in this organization that we can be much smarter about taking advantage of."

Murphy was also asked about the fate of any political appointees that remain at the agency, and he said, "If they don't have competencies, if they don't have professional qualifications that are consistent with the ethos of this organization, they will not stay."

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