Commuters and transit advocates say they believe that riders will soon be hit with fare increases to pay for the deal that averted the state’s first rail strike in 30 years. In announcing the agreement between NJ Transit and 11 unions on Friday, Gov. Chris Christie said that fares won’t be raised in fiscal year 2017, which runs through June of next year, to fund the settlement. But commuters, who are feeling the fiscal pain after fares were increased by 9 percent on Oct. 1, are worried they’ll be asked to pay more once again after fiscal year 2017 ends. The contract runs through 2019. And that’s on a system that advocates say already has the highest fares in the nation. Riders and advocates also say they doubt the line can be held on fares because of the declining amount of state funding for the agency’s operating costs. While Christie said there wouldn’t be an immediate fare increase, he added that fares should periodically increase to cover inflation. Others said they expect NJ Transit will follow the lead of the MTA in New York, which has enacted several small fare increases over the past couple of years. The last MTA fare hike, in March 2015, was prompted by a contract settlement. NJ Transit’s agreement would provide a total wage increase of 21 percent, averaging 2.5 percent annually. Even without the $209 million estimated cost of a tentative labor settlement, other factors are at play.
NJ Transit must pay Amtrak $100 million this year — a $20 million increase — to lease space on the Northeast Corridor line. Advocates also said there has been a steady decline of direct state subsidy of NJ Transit operating costs. Fueling fare hike worries is NJ Transit’s lack of dedicated funding to pay for operating expenses, which includes the price tag of the proposed union settlement. Operating funds come from fares and the level of state subsidy, which changes according to the decisions of the governor and the legislature. Estimated that $6.5 billion in capital funding has been diverted to cover operating costs since 1990, which could have funded projects such as finishing an extension of light rail to Bergen County, or replaced aging buses and trains. That report also said that direct state funding for NJ Transit operations has declined by 90 percent between 2005 and 2016, and recommended a dedicated funding source for operations.
As part of its commitment to partnering with local leaders to create outstanding live/work/play environments that are magnets for the employers, investments and young professionals New Jersey needs to prosper and grow, NAIOP New Jersey hosted a Mayors Panel at its Annual Public Policy Symposium at The Heldrich in New Brunswick. “All politics is local, and so is development,” said NAIOP NJ President Clark Machemer of The Rockefeller Group. “Shifting demographics, rapidly changing technology and the economic challenges we all face make it more important than ever for the private sector to partner with government at all levels to bring jobs and investments to NJ towns.” Lead-off speaker Chuck Richman, Commissioner of the Department of Community Affairs, focused on programs and improvements that will support local development, including the DCA’s pending rule adoption to rein in permit and inspection fees for “big box” industrial facilities (the rules are expected to be adopted in May), and affordable housing, where the goal is to develop “site consistency, and municipal consistency – sensible, development-based standards.” He admitted that government has “had trouble keeping up with technological innovation – we need to advance change. We’re trying to bring the state into the modern era.” Richman noted that online permitting “has saved $10 million a year for developers who have utilized it.” Another initiative is “changing the paradigm of how we do the broader range of regulations,” Richman said, urging that the state and municipalities look at “a national code process.”
Melissa Orsen, CEO of the New Jersey EDA, explained that her agency is in “partnership with other agencies to provide affordable financing alternatives for towns and developers.” To date, New Jersey “has made great strides in attracting businesses,” she said, pointing to $13.4 billion of new public and private investment. programs such as Grow NJ and the Economic Opportunity Act of 2013. These programs have led to successes such as the ongoing redevelopment of the former Hoffman-LaRoche campus in Nutley, the new headquarters and training facility of the Philadelphia 76ers and other projects in Camden, redevelopment of the former Hahne’s department store in Newark, and redevelopment of a former and long-dormant steel manufacturing facility in Trenton, among others.
Since many towns rely on state monies from the nearly depleted Transportation Trust Fund (TTF) for infrastructure repair, Trenton’s response is to “do a lot of infrastructure work in-house,” said Jackson. “We never touch the infrastructure part of our budget” in terms of possible cutbacks, said Barberio. “Still, we have to find a way to fund the TTF.” Vergano noted that Wayne itself spends $2 million a year on the local road infrastructure.” In other words, as TTF funds diminish, New Jersey’s municipalities are increasingly responding with local funds.
The state Senate approved a state takeover of Atlantic City on Monday, leaving the resort’s future of in the hands of Assembly Speaker Vincent Prieto. The Senate passed a bill that would give the state sweeping power over the city’s finances for five years, allowing the Local Finance Board director to sell city assets, eliminate city departments and terminate collective bargaining agreements, among other powers. The city has about $400 million in total debt and is just weeks away from running out of cash. But Prieto, D-Bergen, Hudson, is still against the takeover bill in its current form. He told a ballroom full of police officers last week that the bill won’t be voted on in the Assembly until it’s amended to protect labor contracts made with the city’s public-safety workers. Before the Senate passed the takeover, Atlantic City was already looking ahead to the Assembly. Atlantic City Mayor Don Guardian, Council President Marty Small and Councilman Kaleem Shabazz, along with local union leaders and activists, were in Trenton lobbying Assembly members to vote against the takeover bill.
Meanwhile, Guardian, Small and Shabazz said City Council will consider putting Bader Field up for auction at its Wednesday meeting. A minimum bid would be set at $150 million, and all money from the sale would be dedicated toward paying down the city’s debt, Guardian said. Council will also vote on dissolving the Municipal Utilities Authority, which provides Atlantic City’s drinking water, at that meeting. The takeover bill would allow the state to sell both assets. For the fourth time, the Senate approved a financial rescue package for the city. The bill ends expensive casino tax appeals that wrecked the city’s finances over the years by allowing casinos to make payments in lieu of property taxes. The bill also redirects casino tax funds to the help the city pay down debt and other expenses. Those funds would be held by the state until it approved a financial plan submitted by the city. Christie twice rejected a similar bill, which left a $33.5 million hole in the city’s 2015 budget and put the at risk of running out of cash by next month. Moody’s Investor Services said last week if the takeover and PILOT bills are not implemented, Atlantic City could default or file for bankruptcy.
NJ Transit’s 4,200 rail workers appear to have won nearly everything they demanded in a new contract, including retroactive pay, steady salary increases and a firm cap on employees’ health insurance costs, workers with knowledge of the terms said Monday. The only point NJ Transit won is an agreement to extend the new contract through the end of 2019, a year and a half longer than the unions had requested, those interviewed said Monday. That was viewed as a concession to NJ Transit, since it forestalls another pay raise for at least an extra year, said Frank Wilner, a rail labor expert. The 11 unions will vote this week on whether to ratify the agreement, a number of union leaders said. Workers achieved annual salary increases of 2.5 percent per year, beginning in 2011, when the current contract came up for negotiation. That represents a cumulative pay raise of more than 21 percent through 2019. Workers also won a cap on health insurance benefits equal to about 2.5 percent of their base pay, or about $40 a week, said a half-dozen workers who had been briefed by union leaders on the details. In a letter to federal labor negotiators, NJ Transit said those terms would cost the agency an additional $183 million by 2018.
The terms closely mirror those recommended by two different presidential emergency boards, which were appointed by President Obama to try to bring the two sides to agreement. Those endorsements strengthened the unions’ hand under the federal Railway Labor Act of 1926, which sets the rules for the dispute. If NJ Transit hadn’t given workers what they wanted, the unions could have gone on strike any time after midnight on Saturday. After that it would have fallen to Congress, which has the power to order the strikers back to work and impose a new contract. The only win for NJ Transit was the length of the contract. It remains unclear how NJ Transit will afford salary increases its leaders recently called unaffordable. When Governor Christie announced the deal Friday night, he said it would not require NJ Transit to raise fares at least through July 31, 2017. After that, he said, another fare increase is possible. Riders and transit advocates were angered by the most recent fare increase, last summer, when NJ Transit raised them 9 percent to cover a $56 million budget gap. However, Christie did not rule out a fare hike to cover rising expenses next year, his last in office. The contract is retroactive, which means the 2.5 percent raises will apply to paychecks from 2011 to the present, the union members said. Workers will receive their retroactive pay divided into two lump sums, one paid this year and once next year, the workers said.“It’s a victory for the unions, no doubt,” said an electrician for NJ Transit who spoke on condition of anonymity. “We didn’t want anything extravagant. We just wanted to keep pace with the cost of living.” The deal remains tentative until at least 51 percent of the members of each of NJ Transit’s 11 rail unions approve it. If one of the unions votes no, that creates the possibility of an immediate strike, Wilner said, since all of the unions previously voted to strike as early as 12:01 a.m. Sunday if they did not receive a contract they liked.
Assemblyman Dave Rible, R-Monmouth and Ocean, issued the following statement regarding today’s legislative agenda in the General Assembly: “Today’s agenda represents the misguided priorities of the majority party, which is seeking to spend nearly $240 million through today’s legislation alone. The residents of New Jersey are watching their property taxes increase while their roads and bridges crumble. Funding our Transportation Trust Fund is just one of many critical issues that remains unaddressed while the majority party pushes through legislation that contains hundreds of millions of dollars in new spending. I am hopeful that we can finally stop this type of irresponsible spending that has put our state in a dire financial situation and left us unable to meet our current needs.”