New Jersey Needs a Rail Renaissance

RPA New Jersey Director Mark Lohbauer presented this testimony to the Joint Committee hearing on NJ Transit policy on Thursday, February 23, 2017. 

A good transportation system is the most basic of tasks that a state must provide its citizens. New Jersey’s economy depends on an effective operation that will get workers to their jobs, and consumers to their markets quickly, efficiently, safely and reliably. That system must also be affordable, practical, and convenient, or else we will not be able to equitably convey all New Jerseyans of all income levels where they need to go everyday. If we fail in that basic task, it is our State economy that suffers. NJ becomes less competitive, and risks losing employers, employees, and consumers to other states.

By all objective measures, we are failing in this task. It is also clear that the failure is not the fault of the people at NJ Transit. We have charged them to do a complex job that increases in responsibility every year, yet we also require them to do that job with resources that decline every year. These two factors: increasing ridership, and declining funding, have held true for the past 15 years.

  • Data shows that funding of transit has been declining steadily. The State’s subsidy to NJ Transit has dropped 90% over the past 8 years, and this loss was partially made up by fare increases, service reductions, or other cuts.
  • Lack of funding results in deferred capital improvements, and dropped maintenance. Less maintenance leads to more frequent delays, which cost an incalculable value in loss of productivity.
  • NJ Transit operates the 3rd busiest transit system in the country, yet it is the least well-maintained in our region. Breakdowns are rising: after improving a miserable record of one failure every 27,000 miles in 2002 to a level of one failure every 120,000 miles in 2012, the record has declined again. NJ Transit now experiences one breakdown of the rail system every 85,000 miles. Contrast that with the records of Metro North at 403,000 miles per failure, and the Long Island RR at 701,000 miles per failure.  The New York Times reported that New Jersey Transit also experienced more major mechanical failures: 213 in 2014, compared with 89 for the Long Island Rail Road and 169 for Metro-North. Major train delays are now about one every two days.

Could things be any worse?

Yes, in fact—they could.

There is a well-documented and continuing trend of younger New Jerseyans to migrate back to our cities.  The State of NJ has done a linear regression to project future population, and it has forecast an increase above the 2010 Census of nearly 1 million more residents by 2025, and another 625,000 more by 2034. That represents a population increase of nearly 20% over the next 17 years. With sufficient housing and infrastructure capacity for that growing population, the region could gain even more - an estimated 1.9 million more jobs by 2040, more than twice what is likely under existing trends, adding $760 billion to the region’s economy.

But this growth in jobs and population is only possible with good transit service. Without an investment that not only catches us up to current demand, but also anticipates the coming ridership increases over the next 15 years, our problems will only grow. If we do nothing to change this formula, we must expect more delays, more service interruptions, and quite possibly more tragic accidents.

What is needed is nothing less than a renaissance of rail in New Jersey, complemented by enhanced inter-city bus service, and a better way to cover the final mile.  Here is what RPA proposes that we should do:

  1. GET BACK UP TO SPEED: Increase funding to NJ Transit that will make up for 15 years of declining investment: If we consider the year 2002 as a baseline year in which we had a competitive level of investment in relation to ridership, then we have a more than 20% funding gap currently to make up.
  2. DON’T ROB PETER TO PAY PAUL: We need to create a truly dedicated budget for operating expenses that would be not only separate from the capital budget, but untouchable for non-operating purposes. Of course, for this to be effective, the capital budget must be sufficient to sustain ongoing capital needs, so that the operating budget is not plundered for capital purposes.  
  3. ENHANCE BUS SERVICE: Make the shift away from diesel-fueled behemoths to a completely electric and/or propane-fueled fleet; adopt a “proximity pass” fare collection system, provide more “real-time” bus information screens at major terminals, hubs and stops; and implement “true” bus rapid transit lanes (Really GO Buses) to allow NJ Transit buses to act more like light rail lines for faster connections in corridors that can support it.
  4. COVER THE LAST MILE MORE EFFECTIVELY: As we get better at making public transit more convenient to use, more people will use. Developments like Transportation Network Companies (TNC’s—think Uber and Lyft), more safe bike lanes and bicycle rental programs; more drop-off/pick-up locations at transit stations; and more local shuttle bus service connections all work to make public transit more effective.
  5. GET TO THE HEART: There should be more direct trains from major population centers in New Jersey that carry to Manhattan, the heart of the region. For example, the Gateway Tunnel project is vital. We also believe that the City of Paterson should have a direct line to Newark/NYC, which would support more jobs growth and residential growth in Paterson.
  6. PLAN FOR THE FUTURE: In addition to raising the budget to where it should be to better accommodate today’s riders, expand the capital budget still further in order to enable work to be done now to accommodate the growing ridership of the future. We would do well to emulate the practice of the Metropolitan Transit Authority of NY, which follows a 5-year capital planning cycle in order to do a better job of meeting future demand, and adjusting their data regularly to be sure they remain on target.
  7. KNOW THAT RAIL INVESTMENT MAKES HOME VALUES RISE: In a report that RPA prepared in 2010, we showed that NJ Transit’s investment in 3 rail projects yielded substantial returns in property values, increased local tax revenues, and the attraction of new residents. Price modeling of 45,000 home sales within two miles of train stations shows that three improvements to the NJ TRANSIT rail system – Midtown Direct Service on the Morris & Essex Line, the Montclair Connection for the Montclair-Boonton Line and Secaucus Junction for the Pascack Valley and Main/ Bergen/Port Jervis Lines – increased the value of nearby homes by an average of nearly $23,000 per home (in 2009 dollars). Homes within walking distance of train stations gained the most value – up to $34,000. Cumulatively, the value of all homes within two miles of all train stations that benefited from the projects is estimated to be $11.1 billion. At 2009 property tax levels, that represents an additional $250 million a year in property tax revenue for all municipalities affected

So, let’s bring on a rail renaissance, and fuel our economy at the same time!

Thank you very much for inviting RPA to share our thoughts with you today.