State Funding of NJ Transit: Scudder Says ‘Appropriate,’ Lawmakers Say ‘Inadequate’

John Reitmeyer | April 6, 2017 | Transportation
Concerns about funding of NJ Transit were aired in both Trenton and Washington, D.C. yesterday as commuters dealt with the latest misery at New York Penn Station

Credit: WNYC News
Commuters, NY Penn Station
As thousands of commuters spent another hellish day dealing with long delays and crowded trains traveling between New Jersey and Manhattan yesterday, lawmakers in Trenton peppered a key member of Gov. Chris Christie’s administration with questions about whether the state is doing a good enough job funding mass transit.

The answers lawmakers heard from state Treasurer Ford Scudder — who defended the administration’s current level of funding for New Jersey Transit, calling it “appropriate” — left many shaking their heads.

“Funding of public transportation is inadequate,” said Assembly Budget Committee Chairman Gary Schaer following Scudder’s testimony before his panel in the State House yesterday.

“There are problems, there are safety issues, there are any number of issues,” said Schaer (D-Passaic).

State treasurer Ford Scudder defended Christie administration's NJ Transit funding at Assembly Budget Committee hearing.
Scudder’s appearance before the committee came in the wake of the derailment of an NJ Transit train in Amtrak-owned New York Penn Station on Monday morning. The derailment caused enough damage to put eight of Penn Station’s 21 tracks out of service, limiting the number of trains that can now get in and out of the station while repairs are underway. Though the tracks are Amtrak’s responsibility, the situation has angered regular NJ Transit commuters who have seen their fares increased twice by the Christie administration within the last few years.

Worried that Trump won’t fund tunnel

State lawmakers had already been raising concerns about mass-transit funding after last year’s fatal NJ Transit crash at Hoboken Terminal, holding a series of hearings in recent months to review the agency’s finances and safety record. But yesterday’s hearing came as part of the routine review process for the latest state budget proposal put forward by the governor, a $35.5 billion spending plan for the fiscal year that begins in July. Scudder is also scheduled to appear before the Senate Budget and Appropriations Committee this afternoon.

Christie, a second-term Republican, has been dogged by questions about his commitment to mass transit ever since his first year in office when he canceled a major trans-Hudson tunnel project after construction had already begun. Now, there are concerns that President Donald Trump — who Christie endorsed during last year’s presidential election —
won’t put up the federal funding needed for a successor trans-Hudson tunnel project, dubbed Gateway, which is currently in the final planning stages.

And as state lawmakers questioned Scudder in Trenton yesterday, U.S. Sen. Cory Booker (D-Newark) used a hearing in Washington, D.C. as part of the review of a key Trump transportation department nominee to make a strong pitch for the federal government to commit to funding mass-transit projects, including the Gateway project, which also involves upgrading other regional infrastructure, Penn Station included.

Bookers says commuters angry, frustrated

“Nightmare is not even a word, what’s going on in the Tri-State area right now in one of our most economically productive regions on the planet Earth,” Booker said during the hearing. “My office phone is blowing up, there is anger, there is frustration.”

By the end of the day, Christie also put out a statement, saying he was ordering NJ Transit officials to personally appear at rail stations today to help commuters work through problems that are expected to last until the end of the week. NJ Transit officials also held a news conference, saying all of the cars involved in Monday’s incident were up-to-date on inspections. The official cause of the derailment remains under investigation.

“Amtrak engineering forces are making good progress as they work as safely and quickly as possible to repair damage to one of the most complex interlockings on the Northeast Corridor, a location where two tunnel tracks diverge towards the 21 station tracks,” Amtrak said in a statement. “Our crews hope to restore regular service to New York Penn Station by Friday.”

Still, state lawmakers participating in yesterday’s legislative hearing raised concerns about how well New Jersey has been funding mass transit in recent years, both the operations at NJ Transit and capital improvements. In all, Christie’s FY2018 budget would hold total state aid for NJ Transit flat, at $427 million.

Assemblyman John McKeon (D-Essex) noted that under the Christie administration, direct assistance from the state budget for NJ Transit is down compared to prior governors, with funds raided from the New Jersey Turnpike Authority and the state’s Clean Energy Fund helping to make up the difference.

Scudder defends Christie’s mass-transit record

“The number is the number, but I’m curious, is that surplus funds that the Turnpike Authority has?” McKeon asked at one point during the hearing.

But Scudder defended the Christie administration’s mass-transit record, including the repurposing of revenue from other sources like the Turnpike Authority. He also pointed to a $400 million supplemental Transportation Trust Fund appropriation for the current fiscal year that Christie recently signed into law. That appropriation includes $140 million specifically for NJ Transit capital projects.

“I think the point here is that we do believe that those resources are appropriately used at Transit and so that’s where they’re being directed,” Scudder said. “Between the various forms of state assistance and Turnpike assistance going to transit as well as the increased funding of the TTF this year for an increased capital program we think that there is an appropriate level of resources going to Transit.”

Earlier in the hearing, Scudder also pointed to the Christie administration’s push in recent years to increase the state’s payments into the public-employee pension system. That effort is aimed at helping to restore to solvency a retirement system that was recently named the nation’s worst-funded by Bloomberg.

Christie’s FY2018 budget would increase the state’s pension contribution once again, from the $1.86 billion that’s in the current budget to a record high of $2.5 billion. But Scudder suggested the increase also means there’s little money left for other key priorities. “This $647 million increase in the defined-benefit pension payment . . . does place limits on our ability to address other spending requests,” Scudder said.

‘If the governor had not thrown out the ARC tunnel project…’

But Assemblywoman Elizabeth Maher Muoio (D-Mercer) raised the issue of Christie’s 2010 decision to cancel the Access to the Region’s Core trans-Hudson rail tunnel. The new tunnel would be opening next year if Christie hadn’t halted construction over concerns about cost overruns. The funds were instead used to prop up the TTF, holding off an unpopular gas-tax increase until after Christie ran for reelection in 2013.

“If the governor had not thrown out the ARC tunnel project when he first came into office we would have that tunnel — it was scheduled to be completed next year, 2018 — we would have a new rail line into the city,” Muoio said. “Instead we are facing a federal budget with no funding for the tunnel. What is the plan?”

Under a deal announced in late 2015, the federal government is expected to put up half of the Gateway project’s cost — which is estimated to be between $20 billion and $25 billion — with New Jersey, New York and the Port Authority covering the balance. But an initial budget blueprint released by Trump’s administration last month called for a freezing of federal-grant agreements that aren’t already fully funded, putting the future of Gateway in question.

Speaking in Washington, D.C. yesterday, Booker called the Trump administration’s position “unconscionable,” saying it puts at risk hundreds of millions of dollars of economic activity. “The anger that people are feeling right now, the hurting that the businesses in my community have right now, the effect that is having on our country right now should be answered with action,” Booker said.

“This is not about partisan politics,” Booker went on to say. “This is my appeal to Donald Trump, it’s my appeal to my colleagues on both sides of the aisle, let’s do the fiscally responsible thing and invest in our infrastructure.”

In Trenton, Scudder expressed confidence that the Trump administration will eventually come around and put up the federal funding that will be necessary to get the Gateway project to the finish line.

“My understanding of the federal budget is that this first proposal was a ‘mini budget’ with transportation proposals to come in the next larger budget proposal,” Scudder said. “I do believe that this will be a priority in there. Obviously like any legislative process we’ll have to see how that plays out over time.”

Pressed again by Muoio for the administration’s Plan B, Scudder again pointed to a belief that the federal funding will materialize. “I do believe that transportation will be a priority of the federal administration and that the Gateway tunnel will be funded and that there will be improved commutes into New York City,” Scudder said.

Afterward, Schaer, the committee’s chairman, said he was “extraordinarily pleased to hear that the treasurer was so sure of that.”

“I look forward to his further communications with congress members and senators in terms of making sure that’s a reality,” Schaer said. “I know that his voice and Gov. Christie’s voice would be tremendous on this issue.”