Could NJ transportation agencies save millions by consolidating? Lawmakers want to find out

Sen. Vin Gopal is prime sponsor of legislation that would set up task force to study cost savings
Credit: NJ Transit (Sandman Design via Flickr); GSP sign (Jimmy Emerson, DMV from Flickr); NJ Turnpike sign (Dr. Pa Del from Flickr)
File photo

Nearly two decades after a merger of two New Jersey highway authorities saved millions of dollars, lawmakers want to see if the state can save more by consolidating transportation agencies.

Legislation that cleared a key Senate committee earlier this week calls for a new task force to study cost-saving opportunities from consolidating services at agencies like the Department of Transportation, New Jersey Turnpike Authority and NJ Transit, among others.

The task force would also be asked to analyze best practices in other states and to come up with “merger strategies” for New Jersey transportation agencies, according to the bill.

“We’ve talked a lot in New Jersey about how much government we have,” said Sen. Vin Gopal (D-Monmouth), the primary sponsor of the bill.

“I think it is well worth, at least at a minimum, looking at our transportation costs and how we’re spending (money),” Gopal said.

The consolidation measure harkens back to former Gov. Jim McGreevey’s 2003 merger of the turnpike authority with the state highway authority, an agency that at the time operated the Garden State Parkway separately.

McGreevey’s policy change left the turnpike authority in charge of both highways, and it was projected at the time that it would save more than $100 million over a decade. Those savings were intended to help the McGreevey administration manage a difficult period for the state budget that unfolded after the Sept 11, 2001 terrorist attacks

Pushed by the pandemic

This time around, Gopal and other lawmakers have been contending with the fiscal challenges triggered by the ongoing coronavirus pandemic. The health crisis has led to an increase in unemployment claims and brought on significant revenue losses that have upset the state budget.

Earlier this year, lawmakers approved emergency borrowing of up to $9.9 billion without voter approval to help offset projected losses and obviate the need for drastic cuts in frontline services. And last month, Gov. Phil Murphy’s administration issued roughly $4 billion in new debt to help sustain the current fiscal-year budget.

But with more than 10% of annual spending now sustained by one-time revenue sources, including the borrowed money, it remains unclear how the Murphy administration will seek to balance the next state budget,  due to be presented early next year.

The consolidation legislation calls for a seven-member task force to begin investigating ways to cut costs by integrating services at several different transportation agencies across state government.

The agencies that are specifically identified in the bill in addition to the Department of Transportation, New Jersey Turnpike Authority and NJ Transit include the New Jersey Transportation Trust Fund Authority — which helps finance road, bridge and rail-network improvements throughout the state — and the South Jersey Transportation Authority (SJTA), which operates the Atlantic City Expressway. The SJTA, which also owns the Atlantic City International Airport, was reviewed under McGreevey’s merger initiative, but was ultimately left as a stand-alone agency.

Who would get to appoint task force?

The consolidation bill calls for the governor to appoint three members of the task force, with two of his selections required to have backgrounds in transportation policy. Those appointees would also have to be employed by New Jersey Institute of Technology and Rutgers University, respectively. The third gubernatorial appointee would be required to have a background in public finance.

Getting to appoint individual members of the task force would be the Senate president, Assembly speaker, and the respective Senate and Assembly minority leaders, according to the bill, which was passed with bipartisan support by the Senate Transportation Committee on Tuesday.

Once seated, the task force would be required to draft a report detailing its efforts within 12 months.

As well as examining overall consolidation feasibility, the task force would be charged with looking at consolidating things like purchasing, planning, engineering, legal services and human resources. The panel would also have to review opportunities for inter-agency sharing of maintenance facilities, equipment and contracting.

Restructuring debt, land acquisition, aviation and marine dredging, along with employee benefits, salary structure and labor policies are other issues the task force would be charged with reviewing, the bill says.

This isn’t the first time that lawmakers have shown a renewed interest in finding savings by consolidating transportation services since McGreevey’s merger initiative was enacted in 2003.

The issue came up several years ago when the Transportation Trust Fund was on the verge of running broke, a predicament that was putting pressure on lawmakers to consider raising New Jersey’s per-gallon gas tax to reauthorize it.

Former Sen. Jennifer Beck’s 2015 proposal

Savings from merging state transportation agencies ultimately were built into a 2015 proposal that was floated by then-Sen. Jennifer Beck (R-Monmouth) as part of a broader plan to prevent hiking the gas tax to rescue the transportation fund.

But Beck’s proposal, which also called for increased fines for motor-vehicle offenses like drunken driving and texting while driving, never gained traction with a majority of fellow lawmakers. Instead, then-Gov. Chris Christie worked with legislative leaders in 2016 to enact a nearly 23-cent gas-tax hike as part of an eight-year, $16 billion reauthorization of the Transportation Trust Fund.

A formal fiscal estimate has yet to be prepared for Gopal’s consolidation bill. Beck, in her 2015 proposal, had estimated at least $50 million in savings could be generated by merging transportation agencies like the Department of Transportation and NJ Transit.

Gopal, who unseated Beck in 2017, credited his predecessor for first raising the issue of transportation consolidation and said the legislation he’s now sponsoring reflects her earlier efforts.

“It’s not forcing consolidation,” Gopal said. “It’s simply beginning the conversation and seeing where there are areas of (potential) cost savings.”

A spokesman for Murphy declined comment, citing the general policy of the governor’s office to not weigh in on pending legislation.