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NJ Transit Issues Plan Without Funding

Monday, June 29, 2020

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Earlier this month, the New Jersey Transit Corporation announced its development of a $5.8 billion, five-year capital plan and 10-year strategic plan, identifying a comprehensive vision for the state’s transit service.

According to NJ Transit, the system helps to feed a $1.4 trillion tri-state regional economy and aims to provide a safe, reliable, convenient and cost-effective transit service for the quality of life and continued economic prosperity for New Jersey residents and surrounding metropolitan areas.

However, the spending plans offer no clear source of funding.

NJ Transit Plans

As one of the nation’s largest statewide mass-transportation providers, providing roughly 260 million passenger trips annually on its bus and rail lines, the NJ Transit has outlined various bus garages, station upgrades, bridge replacements, coach and rail-car purchases and state-of-good-repair projects requiring action.

Its biggest projects highlight the need to elevate parts of the century-old Hoboken rail terminal and its Dec. 31 deadline to install and implement a federally required emergency braking system required of all U.S. railroads.

In NJT2030, the 10-year plan aims to support growing transit ridership and the changing environment through strategic choices and critical investments including electric-powered buses and a battery pilot project for trains, among others.

The five-year capital plan, however, identifies budget considerations and an aggressive schedule for projects requiring attention to improve the system’s speed, reliability, safety, reach and quality services.

“Together, these documents outline our plans for the future, and we are committed to making this vision a reality in order to better connect our customers with their lives, one trip at a time,” wrote NJ Transit in its announcement of the plans.

While the proposal’s total expense is more than four times the $1.4 billion the agency annually receives, New Jersey Gov. Phil Murphy told reporters that he would be pushing for borrowing and was hopeful about receiving additional pandemic recovery federal cash.

However, Bloomberg reports that at a news conference held earlier this month, Murphy referenced the Assembly’s authorization for $5 billion in long- and short-term borrowing to fill an estimated $10.1 billion revenue gap through June 2021.

Should the funding be approved, it chances being challenged by minority Republicans on a state constitutional borrowing limit.

Recent USDOT COVID-19 Funding

In wake of the COVID-19 pandemic, the United States Department of Transportation has announced multiple opportunities for relief funding for the nation’s transportation and infrastructure sectors.

At the beginning of April, the USDOT announced $25 billion in federal funding allocations for the nation’s transportation systems and $1 billion in funding for the National Railroad Passenger Corporation (Amtrak) in response to the COVID-19 pandemic.

The news arrived after the American Association of State Highway and Transportation Officials (AASHTO) inked a letter to Congressional leaders in March, seeking support for the creation of a fiscal “backstop” for the transportation sector as a result of the economic impact experienced from the pandemic.

In the letter, AASHTO urged Congress to grant an immediate and temporary waiver for federal truck weight restrictions, giving states maximum flexibility and discretion to manage interstate transportation of emergency supplies in combatting against the virus.

Additionally, officials requested $16.7 billion in supplemental federal transportation funding to backstop expected state revenue shortfalls and asked that transportation investments “double down” so that highway and transit investment backlog can be reduced, and long-term economic recovery could be enabled.

Both allocations were made available through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed by President Donald J. Trump on March 27.

“This historic $25 billion in grant funding will ensure our nation’s public transportation systems can continue to provide services to the millions of Americans who depend on them,” said U.S. Transportation Secretary Elaine L. Chao at the time.

According to the USDOT’s press release, the Federal Transit Administration (FTA) plans to use the $25 billion in allocated funding by giving $22.7 billion will to projects in large and small urban areas, while $2.2 billion is slated to be used for rural infrastructure.

On April 10, USDOT announced in a sperate press release that its Federal Railroad Administration (FRA) would receive $1 billion in funding to support Amtrak’s activities to prevent, prepare for, and respond to the spread of COVID-19, in addition to its impacts on operations and business.

According to the release, Amtrak has experienced an unprecedented decline of over 90% in ridership, in addition to a decline in future ticket purchases for the coming months and has even discontinued service on certain routes.

In receiving the funds, FRA is slated to make or amend existing grants to Amtrak in order to provide approximately $1.02 billion; $492,000,000 for the Northeast Corridor and $526,000,000 for National Network Grants, as authorized by sections 11101(a) and 11101(b) of the Fixing America’s Surface Transportation Act.

By the end of April, Acting Inspector General Mitchell L. Behm wrote in a memorandum to the Secretary regarding supporting efforts made by the USDOT that aim to meet provisions outlined in the CARES Act.

According to the memorandum, the Office of Inspector General (OIG) intends to provide an initial product in the coming months which will crosscut oversight risks and suggestions for mitigation regarding the Department’s efforts. The product plans to leverage key insight for bolstering the Department’s oversight of CARES Act grantees and contractors.

Additionally, Behm points out that because of the volume and speed required to make CARES Act funds available to the public, transactions are at higher risk for fraud, waste, and abuse. To mediate these possible threats, the USDOT and OIG plan to work together and look for any early indicators that might suggest potential misuse.

While seasonal services will still be treated differently based on destination, USDOT also highlights staffing issues for several locations.

All exemptions follow the USDOT’s final order establishing parameters for implementing the authority granted to the Secretary of Transportation by Sections 4005 and 4114(b) of the CARES Act, which was made on April 7.

The order requires that air carriers receiving financial assistance under the CARES Act maintain minimum air services on a nationwide basis, with some exceptions.

At the beginning of June, the United States Senate returned from recess with the intent to begin discussions on the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act.

First unveiled back in January, House Democrats voiced their intent of pushing a massive infrastructure package in a follow-up installment to the CARES Act. According to the Associated Press, the plan centers on a $760 billion, five-year framework that includes money to rebuild roads, mass transit, rail systems, wireless communications networks and water projects.

More specifically, the package offers another round of $1,200 direct cash aid to individuals—increased to up to $6,000 per household—and launches a $175 billion housing assistance fund to help pay rents and mortgages. There is $75 billion more for virus testing and $200 billion in “hazard pay” for essential workers on the front lines of the crisis. The Payroll Protection Program would also see an additional $10 billion.

In the infrastructure sectors, the bill outlines that:

  • $945 million would be used for Capital Improvement Project grants for hospitals and other critical infrastructure;
  • $140 million would be used to expand broadband infrastructure and information technology for telehealth and electronic health record system purposes;
  • $1 billion would cover expenses for grants for core public health infrastructure state, local, territorial, or tribal health departments as described in section 30550 of division C of the Act; and
  • $15 billion would be used for “Highway Infrastructure Programs.”

Additionally, the House Transportation and Infrastructure Committee revealed a $494 billion surface transportation bill, which aims to aid states and cities struggling from the effects of COVID-19 before addressing climate change issues.

The legislation plans to provide $8.35 billion to help states achieve climate-conscience goals, in addition to:

  • $6.25 billion for resilient infrastructure;
  • $60 billion for rail investments;
  • $83.1 billion for state and local transportation services and $22 billion for associated salary and operating expenses;
  • $319 billion for highways;
  • $105 billion to transit;
  • $4.6 billion for highway safety; and
  • $5.3 billion for motor carrier safety.

The legislation also requires that states spend 20% of their NHPP and Surface Transportation Program dollars on bridge repair and rehabilitation projects—roughly $28 billion over the course of five years.

View all PaintSquare Daily News' COVID-19 coverage, here.

   

Tagged categories: COVID-19; Department of Transportation (DOT); Funding; Government; Infrastructure; Infrastructure; Mass transit; NA; North America; Program/Project Management; Public Transit; Rehabilitation/Repair; Transportation

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