TRENTON – New Jersey, New York and Connecticut reached an agreement Monday night on how to divvy up around $14 billion in federal COVID recovery funds for public transit agencies, barely meeting a deadline to be eligible for a portion of another multi-billion-dollar pot of money.

The funding through the Coronavirus Response and Relief Supplemental Appropriations Act, CRRSAA, and American Rescue Plan Act, ARPA, is the latest batch of federal funds intended to offset pandemic-related revenue losses. This one, though, sparked a battle over how to divide the money.

New York contended the language in the latest law differed from the traditional way revenues have been split to one based instead on the transit agencies’ operating budgets. At stake was around $700 million, mostly going from New Jersey to New York.

After negotiations, the states agreed that approximately $10.85 billion of the funding will be for New York, $2.66 billion for New Jersey and $474 million for Connecticut.

The funding to NJ Transit is about equal to the agency’s fiscal 2021 operating budget. It hasn’t yet adopted a budget for fiscal 2022, unable to do so until the funding fight with New York got settled.

“Nothing is more critical to our region’s economic recovery than our mass transportation system. With this agreement, we ensure a reliable and safe commute as workers return to their offices,” Gov. Phil Murphy said in a statement.

NJ Transit had said it was seeking around $3.5 billion through the CRRSAA and ARPA laws, which led to questions about whether New Jersey got steamrolled in the negotiations.

"It ended with New York getting what it wanted, or what it proposed, so I have a healthy skepticism that I look forward to getting answered by the administration," said Sen. Declan O’Scanlon, R-Monmouth.

The Murphy administration said in addition to the $2.66 billion in transit funds from the urbanized area, or UZA, that New Jersey shares with New York, it is also getting $363 million through the Philadelphia region UZA.

In addition, NJ Transit has applied for $400 million in additional supplemental grant proceeds, and the state says New York has agreed to provide an additional $75 million from its additional supplement grant proceeds.

“To be clear: New Jersey has not given up one dollar of what it is entitled to, and we are in the process of receiving all of the funding we deserve,” said Dan Bryan, Murphy’s senior advisor for strategic communications.

“We are utilizing every pathway granted to us by Congress to achieve that goal: CRRSAA, ARPA, and the current supplemental grant program administered by FTA,” Bryan said. “Cumulatively, this $3.5 billion will support operating revenues impacted by the pandemic and ensure New Jerseyans get the reliable, safe commuting experience they deserve.”

The states had until Monday to submit their agreement on how to share the funds to the Federal Transit Administration in order to remain eligible to apply for a share of an additional $2.2 billion for transit agencies being provided through ARPA.

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O'Scanlon questioned whether it's realistic to expect that New Jersey will receive $400 million from a $2.2 billion pool of money for the whole country, plus get some of what New York hopes to get.

"I guess we have to ask why. Why this Rube Goldberg formula? Why not just do this straight up?" O'Scanlon said. "... Would we be getting these other funds anyway? And does this set a precedent? What happens next year if we have abandoned this formula we have followed for a long time?"

Michael Symons is State House bureau chief for New Jersey 101.5. Contact him at michael.symons@townsquaremedia.com.

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