NJ Transit Set for Record Budget Raid That Murphy Criticized

(Bloomberg) -- New Jersey Transit is set to approve the biggest raid on its capital budget in history to fund day-to-day operations even after Governor Phil Murphy said the practice causes long-term damage.

The $2.3 billion operating budget shifts $511 million, or $50 million more than last year, from an account intended to pay for buses, rail cars and major improvements. That’s the highest transfer since such moves began in 1990.

If the budget is approved by NJ Transit’s board of directors on Aug. 8, it will push the total transferred to more than $8 billion by Republican and Democratic governors eager to avoid politically unpopular fare increases. Murphy has promised that fares will remain level through at least June.

The nation’s second-biggest commuter railroad, once a national model, has the most accidents and federal safety fines among its peers after eight years of budget cuts by Republican Governor Chris Christie. Murphy, a Democrat and retired Goldman Sachs Group Inc. senior director who took office in January, has said capital funds should be used to make improvements, not to plug day-to-day budget shortfalls.

Fund Diversions

Murphy spokesman Dan Bryan said the governor has made a “critical investment” in the agency.

“Although the legislature sent the governor a budget with an increased capital-fund diversion, we were still able to preserve a significant increase in the operating budget, giving the agency a sorely-needed infusion,” Bryan said in an email.

Last week, the agency’s commuter train lines were plagued by delays and crowding brought on by crew shortages and safety work. This morning, NJ Transit canceled 20 trains serving New York City-bound commuters, citing mechanical issues and a lack of engineers. This evening, at least four New Jersey suburbs-bound trains were scratched from Hoboken and New York Pennsylvania Station.

NJ Transit’s fiscal 2019 budget increased state assistance to $332 million from $167 million the prior year. The spending, though, continues a tradition of one-time increases, with $236 million from New Jersey Turnpike tolls and a fund fueled by a utility-bill surcharge intended to encourage clean-energy use.

NJ Transit’s press office didn’t respond to emails for comment.

The agency on July 17 was to approve $2.3 billion operating and $1.5 billion capital spending plans for fiscal 2019, but postponed the vote because portions may not have been “consistent with the governor’s mandate,” Diane Gutierrez-Scaccetti, the state transportation commissioner, told reporters at the time. She declined to say which areas were being re-examined.

©2018 Bloomberg L.P.