4Modernize transit systems outside New York City

The three railroads and dozens of public and private bus companies that make up the public transportation system outside of New York City all have certain challenges in common, while other issues are particularly acute for specific entities.

• Inadequate funding: All the transit systems need more resources, and NJ Transit’s funding structure is the most precarious. It is one of the largest systems in the country without a designated funding stream, with state funding to the agency subject to the uncertainty of annual budget negotiations. This has resulted in a 90 percent reduction in state aid for operations since 2005, forcing fare hikes and raids of the agency’s capital fund to cover operating costs. Similar funding reductions for county bus systems has also led to a downward spiral of declining service and ridership. Nassau County’s NICE bus system has seen a 20 percent reduction in funding, and a 71 percent reduction in the county’s support for the system since 2006.
• Political interference: State reductions in funding and political interference (especially at NJ Transit, which is heavily dependent on annual appropriations) have consumed agency officials and thwarted their attempts at addressing the needs of the riding public.
• Lack of investment: Failing systems and inadequate infrastructure have led to increased delays, deadly derailments, and safety hazards. Penn Station, the western hemisphere’s busiest transit hub, is unpleasant and overcrowded, despite recent efforts by the railroads to make improvements. In Connecticut, parts of the the New Haven Line—especially many of its old bridges—are in a state of disrepair. For bus riders throughout the region, funding cuts mean old buses, long waits, and deteriorating service.
• Few resources to address inequities in the transit system: Lack of funding has made it increasingly difficult for transit providers to accommodate the needs of low-income residents, who are particularly dependent on transit. Fares have increased and services cut because agencies have been unable to further subsidize rides or provide a system that bases fares on customers’ ability to pay.
• Poor attention to customer service and accessibility: Rail and bus systems have been slow to adopt technology that would allow better service and coordinate trips between agencies. Navigating the many services is difficult. Many stations, particularly on the NJ Transit network, still are not ADA accessible.

Service cuts and fewer bus riders accelerate a vicious cycle. Nassau County ridership declined by 17 percent between 2006 and 2015, and Suffolk Transit reports ridership declined by 20 percent between 2006 and 2016. NJ Transit rail and bus passengers are also responding to the poor service and fleeing the struggling transit system. On the New Haven Line and Long Island Rail Road, ridership remains high, but poorly maintained tracks and old train cars limit the ability of the lines to serve a growing population. The new CT Fastrak bus rapid transit system between Hartford and New Britain in Connecticut has drawn new riders, but bus ridership in a number of urban centers, including New Haven and Stamford, has started to drop after a period of growth. New Haven saw an 8 percent drop and Stamford a 7 percent drop between 2012 and 2016.

More resources are needed to help NJ Transit, LIRR, Metro North, and bus transit operators improve service by doing the following:

• Adopt sound budgeting practices and rely less on debt. Capital funds should no longer be diverted to cover operating deficits. The operating budget should be funded by fare revenues and dedicated subsidies, taxes, and other user fees. New Jersey should replicate this structure, which is common for large public transportation systems across the country, including the MTA.
• Ensure revenues allocated to transportation purposes are not reallocated to cover shortfalls in other areas of state budgets. Dedicated revenues to state transportation funds must be protected from reallocation to other, non-transportation-related purposes. In Connecticut, a very small proportion of the State’s general sales tax is allocated to fund transportation, but there is strong political pressure to reallocate these funds to other programs. New Jersey voters recently passed a referendum that constitutionally dedicated gas tax revenue to transportation projects. A similar constitutional lockbox in Connecticut would protect state transportation funds from being diverted for other purposes.
• Provide more clarity and transparency about sources of funding for capital investments. All agencies need greater clarity about how money is spent, whether it is from a legislative appropriation, a new fee/surcharge/tax, or a grant from the federal government.
• Evaluate new revenue sources such as revenue generated from development around stations along with other forms of value capture, or a greater allocation to public transportation from gas taxes or future vehicle miles traveled fees.
• Improve both capital and operating efficiencies. In addition to adopting strategies for reducing the cost of capital projects, transit agencies and service providers should look for greater operational efficiencies, such as negotiating for increased productivity in labor contracts in return for higher wages and job stability.
• Provide transit equity to low-income, transit-dependent communities. The many areas in the region that are transit dependent should be given priority for enhancements to the transit system, especially through improvements to the bus network, network redesigns, and other recommendations elsewhere in the plan
• Offer discounted, needs-based fares for short trips on commuter rail lines that run through neighborhoods with many low- and medium-income households. This would improve local mobility and encourage more riders to use public transit for short trips.
• Emphasize customer satisfaction through integrated services. Public transportation agencies should do more to connect with riders, involve them more in decision-making, and make their services attractive and easy to use. This will require using technology to accelerate the transition to a flexible, unified fare collection system and coordinating services that promote more intermodal trips, including with private bus carriers. Ultimately, as the system turns into an integrated regional rail and bus system, fare structures could be organized by zones, across all operators.
• Create better intermodal connections to provide better customer service. This could include adopting bike sharing to reduce the need for parking around commuter rail stations, and promoting innovative parking-management strategies that support on-demand services to replace surface parking.
• Invest in infrastructure and improve service, especially in cities. Capital budgets should be expanded to ensure the railroads and buses are able to provide safe and convenient service that is competitive. Additionally, Health Impact Assessments for transit investments can help identify the most equitable projects and their health benefits for socially vulnerable communities. This includes both maintenance and new projects to provide more capacity. 
• Plan for climate change. As Superstorm Sandy demonstrated, much of the region’s transit infrastructure is located in low-lying areas that are prone to flooding, including tunnels, rail yards, and rail lines, especially in the Meadowlands and along the Hudson River. The three transit agencies have started incorporating climate adaptation into their strategic and capital planning, but more needs to be done to address the tremendous magnitude of the challenge.
• Explore a unified management entity and promote through-running service at Penn Station. As Penn Station is expanded to the west (Moynihan Station) and south (Gateway), and Metro-North service is provided via Penn Access, a unified management entity, including representation from all the commuter railroads and Amtrak, should be explored to better integrate service and amenities and promote through-running. Ultimately, the system should be reconfigured to allow significantly more through-running from New Jersey to Connecticut and Long Island. 

Investing in suburban transit would result in additional transportation choices, more reliable and frequent service, and better access to jobs—especially for transit-dependent households. Better transit service should succeed in getting people to choose transit over walking, which should lead to lower greenhouse gas emissions and more active lifestyles. Lastly, it would lead to less reliance on debt for future capital investments.

Higher gas taxes and roadway tolls, as well as a motorist tax based on the actual distance driven (vehicle miles traveled or VMT fee), would be key sources of revenue. New York would also use a portion of the sales tax, mortgage recording tax, and other levies to fund public transportation. Real estate development could also provide a new funding mechanism in certain attractive markets.

_{1. New Jersey For Transit, “Stuck at the Station 15 Years of Declining Investment Has Harmed New Jersey’s Ability to Deliver High-Quality Transit Service,” 2016}