A potential $300 million a month budget crunch, engineered by President Donald Trump’s recent executive orders to slash federal funding, is threatening to wreck New Jersey Transit’s precarious finances, its new CEO says.

“There is no plan B. There’s no plan to take the $300 million a month we get from the federal government and try somehow to come up with it,” said Kris Kolluri, president and CEO, at a recent NJ Transit Board meeting. “There are going to be some things that are out of our control — especially if this funding threat becomes real.”

An NJ Transit spokesman stated its federal funding so far remains unaffected, noting, “At this time, these projects are not impacted and continue to proceed. We are working closely with the Attorney General’s Office and continue to monitor the guidance as circumstances change. We continue to work to ensure projects and programs continue to advance.” Last summer NJ Transit customers confronted system delays and cancellations, many related to Amtrak equipment failures that also depend on federal funding to pay for ongoing repairs.

NJ Transit is no stranger to budget holes, for years spending its capital projects funds just to keep the wheels turning. With federal pandemic grants expiring, it raised fares 15% in July to avoid plunging off a fiscal cliff. Gov. Phil Murphy did toss the agency a lifeline: the so-called corporate transit fee, a short-term tax on top-earning businesses. That new tax was expected to raise $1 billion in this first year but was not dedicated to NJ Transit.

“There is very little wiggle room in New Jersey Transit’s operating budget, so it’s hard to imagine a world in which the corporate transit fee doesn’t need to go to transit,” said New Jersey Policy Perspective analyst Alex Ambrose, who lobbied hard for the new tax. “No transit agency in the world is able to exist on its own revenue, and New Jersey Transit is no exception. We need state investment in a state service.”

But problems remain because the tax is not constitutionally dedicated to NJ Transit. So where did that $1 billion end up?

“We know last year it did not make its way to New Jersey Transit. Instead, it was put in surplus,” said Michele Siekerka, president and CEO of the New Jersey Business & Industry Association. “So as we go into this budget cycle right now, that billion dollars is sitting in surplus and, yes, it’s up for grabs for anything the government cares to do with it.”

Siekerka said she wants that money to only fund NJ Transit, adding, “Let’s not do an, ‘I told you so.’ And let’s be fair to those job creators that said, ‘We need your assistance in funding NJ Transit.’ Let’s get that money where it’s intended to be.”

But as they address a new state spending plan, New Jersey lawmakers will confront a budget crippled by a structural deficit reportedly topping $3 billion. Last fall, Murphy asked department heads to cut spending by 5% and he’s expected to deliver a deeply austere budget message later this month.

Former Senate President Steve Sweeney, who is running for the Democratic nomination for governor, warned of the temptation to pilfer transit funding. While in the Senate, Sweeney had proposed a plan for constitutionally dedicating transit funding.

“If you don’t constitutionally dedicate that funding that we’re taking, it is going to get eaten up into the black hole which is the budget,” Sweeney said.

But other lawmakers argued, dedicated funding can also reduce crucial options.

“Look, the state does need some flexibility in case you run into a major fiscal meltdown like 2008-2009. If all funds were constitutionally dedicated, you might have had to close schools when that happened. We had some ways to be flexible because not everything was constitutionally dedicated,” said Sen. Declan O’Scanlon (R-Monmouth). “On the flip side, he’s right. Too frequently, even in times when it is in crisis, administrations — particularly the Murphy administration — is happy to take money, move it around and use it for things it’s not intended for.”

— Editor’s note: This story has been updated with a statement from New Jersey Transit.