New Jersey candidates trumpet transit dreams. On revenue, they mumble

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The agonies of New Jersey Transit, cash-starved by Gov. Chris Christie as rail commutes to Manhattan turned hellish, are campaign-speech staples for candidates vying to succeed him.

But as the June 6 primaries approach, none of the 11 Republican and Democratic candidates has identified a sure revenue source to remedy crowding and delays. In a state that relies on mass transit for access to New York City jobs, basic fiscal troubles crowd out any heroic measures for the nation’s second-biggest commuter-rail system.

The next governor must balance a budget set to lose billions over eight years because Christie, a Republican who leaves in January, cut the sales tax and ended the estate tax. He also failed to make full school-aid and pension payments. New Jerseyans, bearing the highest U.S. property taxes and a recent 23-cents-per-gallon gasoline-tax increase, aren’t eager to shell out more.

“With all the issues, somehow they have to find a way to raise revenues,” said Daniel Solender, head of municipal debt at Lord Abbett & Co., which manages $19 billion of state and local bonds. “Even if you tried to cut expenses, it’s unlikely you could do enough.”

In March and April, two Amtrak derailments at New York’s Pennsylvania Station caused days of upheaval for New Jersey Transit, which pays to use its tracks, signals and platforms. A stepped-up maintenance schedule is causing delays of 30 minutes on weekdays, and will mean deep service cuts for eight weeks in July and August.

Christie, during a May 23 news conference in Trenton, blasted Amtrak officials for “duplicity, their dishonesty, and their inability to be able to keep this infrastructure in a state of good repair.” The candidates, though, say he shares the blame.

“For far too long we have seen a lack of attention to our transportation infrastructure,” said John Wisniewski, a Democratic assemblyman running for governor.

Since Christie took office in 2010, he’s canceled construction of a commuter-rail tunnel to Manhattan, raised New Jersey Transit fares twice, cut the agency’s state subsidy 90 percent and shifted $2.94 billion from capital funds to pay for operations.

In 2015, New Jersey Transit had the most mechanical breakdowns among 24 peer railroads; last year it logged the most accidents among the nation’s 10 biggest commuter lines.

Candidate Jack Ciattarelli, a Republican assemblyman, spoke to commuters at Secaucus Junction station one weekday morning as three New York-bound trains failed to show.

“It says the next one’s arriving in two minutes,” he said as he looked at a monitor. “Good luck.” The train he finally boarded wound up idled in the Hudson River tunnel for more than 20 minutes because the Amtrak train ahead had mechanical trouble.

In 2010, Christie — citing design shortcomings and potential cost overruns — canceled a tunnel that would have opened as soon as 2018 to replace the existing link, which runs at capacity and needs a complete rehabilitation. The governor now supports Gateway, Amtrak’s $24 billion project that includes a new Penn Station tunnel that would open in 2025 at the earliest.

Amtrak was counting on funding from the federal New Starts grant program. Then, that source was cut 43 percent in the budget introduced May 23 by Republican President Donald Trump.

Ciattarelli’s plan to make up any Gateway shortfall hinges on renegotiating New Jersey’s commuter income-tax agreement with New York to create a $2 billion annual revenue stream. He’d also prioritize emergency track repairs on the state’s $2 billion-a-year Transportation Trust Fund project list, a plan with an immediate downside for roadway maintenance.

“Every dollar that goes to New Jersey Transit is a dollar that doesn’t go to state highways and bridges,” said Marc Pfeiffer, assistant director of Rutgers University’s Bloustein School Local Government Research Center in New Brunswick. “This is part of New Jersey’s overall fiscal problem. New Jersey Transit has to be looked at with how you align all the other needs.”

Phil Murphy, a former Goldman Sachs Group Inc. executive and U.S. ambassador to Germany who is the Democratic front-runner, has proposed a dedicated fund for New Jersey Transit, “potentially” with a tax increase, the sale of development rights or higher fees on developers and New Jersey Turnpike franchisees.

It’s “a multi-hundred-million-dollar proposition,” Murphy said at an appearance at the Trenton train station, acknowledging that he hadn’t done more than cursory calculations.

If the federal government doesn’t come through with money for Gateway, public-private partnerships “would be done in a manner that keeps the state firmly in control, does not cede authority to private firms, nor becomes a boondoggle for Wall Street banks,” Wisniewski said in an April 26 video on his website.

He’s proposed budget increases for maintenance and safety, though he hasn’t specified where he would find the money. Another Democrat, Jim Johnson, lacks financial details when he says he’s committed to “fund New Jersey Transit so it can undertake necessary repairs and upgrades.”

On an average weekday, more than 227,000 passengers ride New Jersey Transit trains. On social media, passengers increasingly complain about trains short of their customary number of cars, forcing some to stand for an hour or more. During rain storms, some users post photos of water pooling on seats and floors.

Kim Guadagno, Christie’s lieutenant and the Republican frontrunner, says she would root out waste, add ferry service on the Hudson and replace Penn Station and the Port Authority of New York and New Jersey’s Midtown bus terminal, each functionally obsolete and over capacity. She gave no financial details.

Martin Robins, who helped create New Jersey Transit and was a deputy executive director there, said he knew of no easy financial fix. Christie cut the state subsidy to $35 million, and back-filled budgets with $1.3 billion from the tunnel project he canceled. Year to year, mass transit doesn’t know how much it will get, and the candidates, Robins said, all recognize that uncertain budgeting must end.

“There’s a lot of interest now in New Jersey Transit,” Robins said. “If the person who is very well inclined to try to reinvest in public transit gets elected, it could turn out to be fortuitous. For someone not well inclined, it could turn out to be a disaster.”

BLOOMBERG