OP-ED: Will USDOT Secretary Buttigieg mediate NY/NJ $14.5 billion CARES Act funding split dispute?

Aug. 18, 2021
New Jersey Gov. Murphy wants Secretary Buttigieg to mediate the dispute between New York and New Jersey with the split of $14.5 billion federal funding from the CARES Act.

New Jersey Gov. Phil Murphy sent a letter on Aug. 12 to U.S. Department of Transportation (USDOT) Secretary Pete Buttigieg requesting that he step in and mediate the ongoing New York/New Jersey/Connecticut $14.5 Billion CARES funding split disagreement.

These funds come from the Corona Response and Relief Supplemental Appropriations (CARES) Act of 2021 that was signed into law on Dec. 27, 2020. It allocated $14 billion out of $900 billion for transit. The American Rescue Plan Act of 2021 and was signed into law on March 11, 2021, to provide $30.5 billion for transit.

The New Jersey Congressional delegation on July 12 sent a similar letter to Federal Transit Administration Administrator Nuria Fernandez to do the same. The dispute for allocation of these funds involves the New York Metropolitan Transportation Authority (MTA) using a different formula which would give them $637 million more at the expense of New Jersey Transit (NJ Transit).

Both Connecticut and New Jersey want to continue using the previous formula for dividing up annual FTA Section 5307 Urban Formula Funding.

Blame is equally shared between all three governors, including outgoing New York Gov. Andrew Cuomo on behalf of MTA; Gov. Murphy for NJ Transit; and Connecticut Gov. Ned Lamont for MTA Metro-North Railroad (New Haven branch interests). Their respective representatives at the bargaining table have failed to come to an agreement for too many months. Why can't all three democrats get along and resolve this ASAP? Is the next New York Gov. Kathy Hochul (due to Cuomo's resignation) aware of the issue? Is it a priority on her transportation to do list? 

Senate Majority leader Chuck Schumer (D-NY) has previously proudly taken credit for delivery of these funds. Former MTA Chairman Pat Foye lobbied for these dollars. Both perhaps prematurely celebrated the good news concerning bringing home these billions in transit dollars. Schumer, who is never silent around a camera, has been missing in action on this delay for actual follow up in the distribution of funding.

Schumer, as New York's senior senator, has never been shy about speaking out on behalf of MTA's financial needs. Interesting how he had been mum on the necessary follow up steps to secure these funds. Perhaps he has continued staying neutral to preserve his one seat senate majority. Schumer is afraid of taking sides between MTA and NJ Transit. Schumer has never held one of his famous Sunday news conferences advocating a serious public position on the formula used for distribution of funding. He clearly does not want to alienate Senators Corey Booker (D-NJ) and Bob Menendez (D-NJ), along with Richard Blumenthal (D-CT) and Chris Murphy (D-CT). 

It is highly unlikely that either FTA Administrator Fernandez or USDOT Secretary Buttigieg will ever get involved in mediating this dispute. Both serve at the pleasure of President Joe Biden. The Biden Administration will not want to take sides alienating either governor.

One issue overlooked by many is how this disagreement adversely impacts other non MTA transit operators on the New York side of the Hudson River. Until New York and New Jersey agree on a split of funding, the New York Metropolitan Transportation Council (the FTA sanctioned Metropolitan Planning Organization) is unable to complete their own respective split for its membership.

The result is that NYCDOT Staten Island Ferry, Nassau Inter County Express Bus, City of Long Beach Bus, Suffolk County Transit Bus, Town of Huntington Area Rapid Transit Bus, Westchester Bee Line Bus, Putnam Area Rapid Transit Bus and Transport of Rockland County Bus are also unable to access their share of funding. These smaller non-MTA agencies don't have the same ability to borrow money as the MTA does. Just like both NJ Transit and MTA, since March 2020, they have all incurred a significant lost of fare box revenue as well as additional operating and capital costs. 

How do these transit agencies and the local elected officials within their service areas stand on this issue? Have New York City Mayor Bill de Blasio, NYC Comptroller Scott Stringer, NYC Public Advocate Juimanne Williams, NYC Council Spraker Corey Johnson, Staten Island Boro President James Oddo, County Executives Laura Curran (Nassau), Steven Bellone (Suffolk), George Latimore (Westchester), Ed Day (Rockland) or Mary Ellen Odell (Putnam), Town of Huntington Supervisor Chad Alpinacci, City of Long Beach Manager Tom Modica spoken out on behalf of constituents who depend upon and utilize their respective local bus or ferry systems on the financial impact of this impass?  

Both NJ Transit and MTA missed the July 20 deadline for submission of a grant. This would have afforded FTA the opportunity to approve and obligate funding before the end of September. Both agencies now have until FTA's financial system shuts down near the end of September to submit their respective grants. After that, the FTA'S Transit Award Management System (TrAMS) closes. Financial activities such as obligation of funding necessary for grant approval doesn't resume until late October.

Grants sometimes take longer to approve during FTA's first financial quarter (October 1, 2021 - December 30, 2021) for federal fiscal year 2022. Transit agencies have to renew annual requirements needed for grant approval. They must submit a series of new 2022 Annual Certifications and Assurances. FTA issues a Federal Register Notice for this critical document. Historically, it has taken the NY MTA many weeks before they complete submittal of this document. Based upon my previous experience working at FTA, NJ Transit has a better track record than MTA in submittal of Annual Certification and Assurances along with other new documents necessary for FTA to approve and obligate funding under carryover or new first quarter federal fiscal year grants. This delays the ability of FTA to complete and approve any pending grant. 

It is now too late for any of these grants to be approved in September. Formal submission can only take place after the splits between the states are agreed upon. FTA averages 36 days after a grant is formally submitted to approve and obligate funding. These new future grants submitted in TrAMS will be considered carry over grants from federal fiscal year 2021. They will be processed in federal fiscal year 2022 (October 1, 2021 - September 30, 2022). When the FTA TrAMS system comes back up in late October, the grants may not end up being approved until December 2021. As each week and month goes by, the odds increase that the $14.5 billion in funding will not be protected in obligated approved FTA grants until December 2021.

Virtually every other Urbanized Area in the nation including those that cross state boundaries has already agreed on splits between transit agencies months ago. Most transit agencies have already submitted grants for both the second and third round of CARE COVID dollars. Many already have approved grants from FTA for the second round. Week after week, more are obtaining approved grants for the third round.

It hurts both New York and New Jersey, along with Connecticut, in the continuing national competition for other FTA discretionary transit dollars when they can't even agree on the first step in accessing CARES Act funding. Coming to agreement for allocation of these funds should not continue to go unresolved. Transit riders, transportation advocacy groups and taxpayers deserve better. 


Larry Penner is a transportation advocate, historian and writer who previously worked for the Federal Transit Administration Region 2 New York Office. This included the development, review, approval and oversight for billions in capital projects and programs for the MTA, NYC Transit, Long Island Rail Road, Metro North Rail Road MTA Bus, New Jersey Transit along with 30 other transit agencies in NY & NJ.

About the Author

Larry Penner

Larry Penner is a transportation advocate, historian and writer who previously served as a former director for the Federal Transit Administration Region 2 New York Office of Operations and Program Management. This included the development, review, approval and oversight for billions in capital projects and programs for New Jersey Transit, New York Metropolitan Transportation Authority, NYC Transit bus, subway and Staten Island Railway, Long Island and Metro North railroads, MTA Bus, NYCDOT Staten Island Ferry along with 30 other transit agencies in New York and New Jersey.