Capital budget supports equipment modernization; operating budget assumes lowest growth rate in history

July 14, 2010

NEWARK, NJ — The NJ TRANSIT Board of Directors today approved new equipment acquisitions as part of the agency’s Fiscal Year 2011 (FY11) capital budget and approved an operating budget that reflects the agency’s commitment to operate efficiently and reliably.


“We are delivering on our commitment to operate efficiently with the lowest growth budget in NJ TRANSIT’s history, positioning ourselves to be a stronger, more financially-stable agency,” said Transportation Commissioner and NJ TRANSIT Board Chairman James Simpson.


“This budget enables us to continue delivery of safe and reliable service to our customers while modernizing our bus and rail fleets,” said NJ TRANSIT Executive Director James Weinstein. 


The Board approved a $1.79 billion operating budget and a $1.35 billion capital program for the fiscal year that started July 1. 


The Board also approved today the purchase of 100 additional multilevel rail cars and 10 dual-mode locomotives.  Both will replace aging equipment in the fleet to increase seat capacity and improve reliability.  Together with the ongoing procurement of new buses, this capital investment offsets certain expenses for parts because of new equipment warranties, providing some relief to the operating budget.


Nearly half of the revenue in the FY11 operating budget comes from fares ($823.6 million), with the balance from a combination of commercial revenues ($102 million), state operating assistance ($276.2 million) and state and federal reimbursements ($587.3 million).


The capital program funds state-of-good-repair investments in transit stations and infrastructure, supports an ongoing fleet modernization program and advances service reliability, safety and capacity-building initiatives. 


Operating Budget


The FY11 operating budget reflects a stabilized level of state operating assistance and assumes an increase in expenses of only 0.5 percent compared to last year, which marks the lowest growth rate in NJ TRANSIT history and is significantly below the rate of inflation.


For FY11, NJ TRANSIT faced a budget gap of approximately $300 million, as a result of ridership declines last year, $150 million in stimulus and other one-time federal transportation funding that is not available this year, and increased operating costs for fuel, parts and contractual obligations.


To address this gap, NJ TRANSIT implemented a combination of internal efficiencies, fare increases and service reductions.  The agency’s fare and service plan minimized impacts to the most transit-dependent riders, including low-income customers, seniors and people with disabilities.  To date, the ridership diversion rate from these actions has been lower than original estimates—approximately two percent compared to projections of five percent.


Capital Program


The FY11 capital program targets NJ TRANSIT’s most critical infrastructure and state-of-good repair needs and supports an ongoing fleet modernization program, which includes the continued procurement of more than 1,400 buses, more than 300 multilevel rail cars and more than 50 electric and dual-powered locomotives.

The capital program includes $296 million to advance capacity expansion projects such as the ARC Tunnel, the Portal Bridge project, and the Hudson-Bergen Light Rail extension to 8th Street in Bayonne. 


Rail state-of-good repair projects will be supported by $85.5 million in the capital program, including $37.3 million to replace track and ties and inspect and replace bridges.  A total of $11 million will advance electric traction and signal improvements, and $5 million will fund ongoing locomotive reliability programs.


The capital program also includes $84.9 million for bus and light rail state-of-good repair needs, including $2 million for Newark Light Rail infrastructure improvements and $72 million toward the purchase of new buses.


In addition, NJ TRANSIT will invest $11 million in rail station improvements at Newark Penn Station and Ridgewood Station, as well as inspections and repairs at stations throughout the system.




NJ TRANSIT is the nation's largest statewide public transportation system providing more than 895,000 weekday trips on 240 bus routes, three light rail lines and 12 commuter rail lines. It is the third largest transit system in the country with 165 rail stations, 60 light rail stations and more than 18,000 bus stops linking major points in New Jersey, New York and Philadelphia.