NJ: NJ Transit study targets $600M in budget cuts, expansion and reform

April 22, 2024
A $6.7 million NJ Transit feasibility study would examine making up to 20% in budget cuts, propose how to expand service and suggest some early “quick win” ideas with a goal to deliver a full report in under a year.

A $6.7 million NJ Transit feasibility study would examine making up to 20% in budget cuts, propose how to expand service and suggest some early “quick win” ideas with a goal to deliver a full report in under a year.

Those are among the many aspects of the state’s public transit system that the North Highland Company will have to study and make recommendations about under a contract signed on April 10 with the Department of Transportation.

The same company conducted the 2018 audit of NJ Transit ordered by Gov. Phil Murphy and delivered that October. NJDOT was required to solicit competition from at least three firms and requested quotes from Cohn Reznick LLP, Deloitte & Touche LLP and North Highland, acording to the governor’s office.

The agency realignment study was proposed a full year ago by then Transportation Commissioner Diane Gutierrez-Scaccetti in response to a predicted fiscal deficit forecast to hit $956 million by mid-2026.

The contract between North Highland and the Department of Transportation was released by the governor’s office Thursday evening.

In it’s response to the DOT, North Highland proposed delivering “quick wins” by the fifth month of the project that would be identified and gathered during a three-month assessment phase.

“Our plan is to wrap up the assessment and issue the Feasibility Study Report at the end of week 42 – a full ten weeks before the scheduled conclusion of the first year of the contract, giving you the opportunity to begin implementing change before the year is out,” North Highland’s proposal said.

Among the tasks requested for North Highland in the feasibility are:

An overall goal to make a 10% operating budget reduction for Fiscal Year 2025, and an additional 10% Fiscal Year 2026 cut. That comes to $600 million in cuts over two years based on the proposed $3 billion fiscal year 2025 operating budget.

The DOT requires the reductions are sustainable year-over-year and have a reasonable path to be implemented.

North Highland also must evaluate all reasonable alternatives to provide for an expanded/enhanced public transit system. Costs, benefits, and impacts of alternatives are to be evaluated.

NJ Transit’s existing services and those provided by other organizations and agencies in the state would be reviewed to determine the level of additional/enhanced transit services required.

A financial plan for operations and capital, including funding sources and a phased implementation time table also are required.

Those areas were outlined in 2023 by Gutierrez-Scaccetti, who is now Murphy’s chief of staff, to increase service “to the highest demand customers” but not leave “customers on the lower demand lines behind,” and look at ways to increase recreational travel revenue.

North Highland also will be asked for suggestions how to make the NJ Transit experience better for customers.

Areas include technology improvement to the NJ Transit app, how performance is reported to the public, “physical station, platform and car infrastructure” and the feasibility to make greater use of cross-honoring tickets when service is delayed or suspended on rail bus or light rail.

Absent from those tasks are two key rider complaints about prompt communication of service disruptions and how they are handled.

Social media was ripe with complaints about Tuesday evening’s suspension of Northeast Corridor line service after an Amtrak Acela train damaged overhead wires, bringing service to a standstill.

NJ Transit’s leadership structure would be reexamined for changes to the board of directors, which was expanded to 13 members by the 2018 reform law, in addition to executive staff and divisions. Personnel hiring and protocols with goals to attract talent would be looked at, as well.

Last year, Gutierrez-Scaccetti suggested streamlining NJ Transit’s five corporate entities that include the NJ Transit Corp., NJ Transit Bus operations, NJ Transit Rail Operations, NJ Transit Mercer and NJ Transit Morris, Inc.

NJ Transit’s current funding sources would be reviewed and an evaluation made whether they are adequate to meet both the agency’s current operating needs and capital upgrades.

NJ Transit’s financial and operating relationship with Amtrak, including NJ Transit payment for use of the Northeast Corridor Line and Penn Station New York and how issues are handled, is also part of the study.

The DOT also called for public involvement, including focus groups, surveys, public open house meeting to get suggestions, and “stakeholder interviews” with “an NJT approved list of stakeholders, suggested by the contractor.”

To accomplish all of this, North Highland proposed using five firms including itself and two others with transportation backgrounds, a public affairs company to draft the report and a diversity, equity and inclusion consultant.

North Highland boasted it has completed similar work at eight of the top 10 transit agencies in the U.S. and with others around the world.

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Larry Higgs may be reached at [email protected]. Follow him on X @CommutingLarry.

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