Like commuters left waiting for a train that never shows, New Jersey legislators were left cooling their heels last week by NJ Transit officials who failed to show for a hearing on the system’s Super Bowl fiasco. The agency’s new executive director, Ronnie Hakim, said she needed time to conduct her own study of why NJ Transit left thousands of fans stranded for hours at MetLife Stadium.
But the new team that Gov. Chris Christie has put in place at the embattled agency will need to do much more than figure out what went wrong on Super Bowl Sunday. Over the last four years, NJ Transit has sparked criticism for everything from poor preparations for Superstorm Sandy to raising fares sharply while failing to rein in employee benefits and perks.
Somehow, NJ Transit has to figure out how to improve service to riders even while it grapples with long-term costs squeezing its budget. It’s not a pretty picture for the state’s commuters or taxpayers.
Revenues from operations amount to less than half of NJ Transit’s expenses; government sources largely cover the rest of its spending. Christie took office criticizing the agency for its rich public subsidizes and richer employee contracts, and cut the state’s $297 million appropriation to it his first year by $33 million. NJ Transit responded by hiking fares a whopping 25 percent.
Some of that fare hike was justified, since taxpayers were footing too much of the bill for riders. But the agency has continued to provide benefits and perks for employees out of line with its budget. For every dollar it spends on salaries, NJ Transit spends more than 80 cents on fringe benefits; its average cost of employing a worker is about $100,000 a year.
The agency’s pension bill alone amounts to about 22 percent of payroll for employees in the plan, or $80 million a year. It’s also spending nearly $40 million a year on a benefit long gone in most of the private sector — health insurance payments for retirees. (And even that outlay amounts to just 45 percent of the actual bill for this benefit: NJ Transit is pushing the rest of the cost for retiree health care off to the future.)
NJ Transit for years has also paid workers in cash for unused sick and vacation time — another benefit rare in the private sector. (Christie ended that perk for nonunion workers and new hires, but some 9,000 employees still enjoy it.) Oh, and union members still ride the agency’s lines on their own time for free — a perk that Jersey papers have heavily criticized at a time of rising taxes and diminishing services for the state’s residents.
All of this might seem less painful if it were accompanied by stellar performance. Hah! In February, the agency experienced its worst month of on-time performance since January 1996.
NJ Transit blamed much of the problem on bad weather. But the agency’s on-time performance has been spotty for years.
A 2010 New York Times analysis showed that a quarter of NJ Transit trains were disembarking late during rush hour — the worst record of the region’s three commuter lines. The agency claimed a higher on-time performance, but only by counting off-peak hours, a period that matters far less to commuters.
Similarly, NJ Transit’s execution during Superstorm Sandy proved disastrous. It parked hundreds of rail cars below sea level and sustained more than $100 million in damages. No other mass-transit agency in the area made so grave a miscalculation.
NJ Transit can’t expect much relief from the state anytime soon. True, the state’s economy is improving, with private-sector job growth averaging 1.5 percent in each of the last two years, better than at any time in the previous decade.
But, as Christie has observed, state government’s own legacy costs, especially rising pension and debt payments, are eating up nearly all of the growth of tax revenues, providing little extra to spend elsewhere.
That leaves NJ Transit’s new boss with the task of somehow improving service as costs are rising, union members are grousing about working without a contract and commuters are grumbling about trains that don’t show up.
Only one thing seems certain: The gravy train isn’t pulling back into the station any time soon.
Steven Malanga is senior editor of City Journal.