Fifth Annual Governor’s Transportation Conference - Trenton, NJ


02-29-08

REMARKS FOR
JAMES S. SIMPSON
ADMINISTRATOR
FEDERAL TRANSIT ADMINISTRATION

FIFTH ANNUAL GOVERNORS TRANSPORTATION CONFERENCE
TRENTON, NJ
FEBRUARY 29, 2008

On behalf of President Bush and Secretary Mary Peters, I’m delighted to be here in Trenton, where the old motto is very fitting: Trenton Makes, the World Takes.

For centuries, Trenton has been a center of commerce, trade – and a hub for transportation. In fact, the stage coach between Philadelphia and New York used to run right through Trenton.

So there’s no better place for a conference on transportation’s future.
 
I also have business ties to this area – in East Orange, Cranbury, and Jersey City. And family ties too: My grandparents had a bungalow in Mystic Islands, and at one point we lived in Hazlet, off Route 3, and as an adult I lived in Jersey City.
 
So this is a homecoming, of sorts.

Transportation is the circulatory system of any region’s economy – including New Jersey’s.

But congestion has taken an enormous toll here. . . costing the state roughly $8 billion a year in lost economic opportunity. . .

Nationally, congestion costs the U.S. economy $78 billion annually in the form of 4.2 billion lost hours and $2.9 billion in wasted fuel.    
Building new roads may be part of the solution   --  but it definitely is not the whole solution. In the last 25 years, highway funding has increased 100 percent, yet congestion over the same period has increased 300 percent.  

A robust transit network must be maintained as part of the mix if we’re going to keep our economy moving forward.
New Jersey gets this:  The state is second only to New York in its level of transit usage  --  twice the national average  --  with 4 consecutive years of ridership growth. . .

But the real challenge is figuring out how to maintain and upgrade the state’s transportation infrastructure over the long-term.

Where will the money come from to expand the state’s transit systems and keep roads, tunnels, and bridges in a state of good repair?

The old answers don’t fit anymore.

Our federal cash cow   --  the Highway Trust Fund   --  is drying up. The fund’s balance is shrinking. By the end of 2009, the fund’s deficit will be more than 3 billion dollars. The mass transit portion of the fund is expected to have a negative balance by 2012.

And New Jersey’s Transportation Trust Fund is generally considered to be on financial life support.

Now I recognize that Governor Corzine’s plan to introduce new toll road charges, and create a public company to issue the necessary bonds, is considered controversial.

But we can’t expect 20th century solutions to solve 21st century problems. . . We can’t continue to borrow from our future to pay for the present. . . And we can’t ignore the trillions of dollars the U.S. needs to invest in its physical infrastructure to remain competitive in a global economy.

In fact, we’ve reached a tipping point. . . and relying on business-as-usual just isn’t going to cut it anymore. So new solutions to old problems are in order.

I am hopeful that New Jerseyans can come together and solve this in a fiscally responsible manner.

We at FTA and DOT are committed to helping New Jersey to grow its transportation infrastructure.

In particular, we support an extensive planning effort for one of the largest public works projects in New Jersey’s history  -- the Trans-Hudson Express Access to the Region’s Core, or THE ARC, for short.

As you may know, THE ARC is a more than $7 billion project -- an 8.3-mile commuter rail line linking Secaucus and Penn Station in Manhattan. A key feature of the project is a new tunnel crossing – the first in a century. Once built, THE ARC is expected to double rail capacity between New Jersey and New York.

Obviously, this project is strategically vital to the region.  And it is one of the largest in FTA’s competitive New Starts portfolio.

It is important to understand that to qualify for New Starts funds, projects like THE ARC must undergo a rigorous and extensive environmental, engineering, and cost-effectiveness analysis, and meet our strict funding criteria.

FTA is being asked to provide up to $3 billion of THE ARC’s total project cost. That’s a serious potential commitment on our part. . .

Thanks in part to New Jersey Transit’s diligent efforts to improve the project’s efficiency, THE ARC has made progress by moving from a Medium rating last year to Medium-High in FTA’s FY09 New Starts Report. 

The project is making good progress. . .

New Jersey Transit has responded to local environmental concerns by changing the project’s alignment. . . updating travel forecasts to better reflect the project’s benefits. . . and obtaining firm commitments from local funding partners, including the Port Authority of New York and New Jersey.    

More good news: The project’s tunnel team has completed the preliminary engineering work on time and under budget. . . and this past Tuesday, FTA completed its review of a supplemental environmental impact statement, which will be published in the Federal Register shortly.

But as a complex mega-project, ARC continues to face challenges. . . 

One key challenge is financing. To receive New Starts funding, NJT must demonstration that it can maintain and operate this project and existing rail systems over the next 20 years. Additional funds are needed for this purpose.

Given the current state of New Jersey’s State Transportation Trust Fund, additional resources will be needed – and FTA will be carefully reviewing financial assumptions for the project.

The bottom line is that ARC holds great promise, and significant progress has been made to move this complex project forward.
We at FTA look forward to supporting New Jersey Transit as this important venture moves ahead.

In closing, I believe we have a collective responsibility – at the local, state, and federal level – to pledge to current and future generations that we’re going to find ways to make transit and transportation better. . . make it sustainable. . . and make it possible for our citizens and businesses to have the mobility and economic opportunity they need to be productive and competitive.

We’ve all got to learn to take a long-term perspective in dealing with our transportation infrastructure needs. . .  Experience shows that we can’t expect quick fixes that bring temporary relief to buy us the resources we’ll need years from now.

That’s why Secretary Peters and I are serious about encouraging more public-private partnerships to rebuild costly infrastructure. . . and encouraging states to add tolling to the revenue mix.

Obviously, tolling is key to the debate you’re having right now in New Jersey.

We’re committed to supporting New Jersey’s efforts to do the right thing. . . to take a long, hard look at its transportation infrastructure. . . and to invest creatively in the state’s future.

Thank you.