NJ Transit will propose a 15% fare increase in its fiscal year 2025 budget, the first fare hike proposed in almost 10 years.
The increase is intended to avoid an approaching $119 million budget shortfall, which the revenue and cuts reduced to $106 million, officials said during a media briefing on Wednesday.
The plan calls for a 15% fare increase that would be voted in April and take effect on July 1. That increase will be followed with subsequent 3% increases to be taken annually on July 1 of each year with no sunset date. Officials speaking on background said they made $44 million in reductions to the Fiscal Year 2025 budget, but service levels will not be cut.
The increase would raise the cost of a one zone bus fare from $1.60 to $1.80, a trip from Jersey City to the Port Authority bus terminal in New York would increase from $3.50 to $4, bus fare from Toms River to New York City would rise from $21.25 to $24.40, according to agency documents.
Rail fare would increase from $16 to $18.40 for a one way trip from Princeton Junction to New York. Light rail fare will increase from $2.25 to $2.55 on Hudson-Bergen, from $1.60 to $1.80 on Newark and Riverline light rail. Proposed fare tables are on NJ Transits website.
NJ Transit plans 10 in person public hearings from March 4 to 8, in addition to taking online written comments, however no virtual option will be offered. Officials expect NJ Transit’s board of directors will vote on the proposal at the April 10 board meeting.
Reaction from transit advocates was critical of Gov. Phil Murphy and the state legislature for ignoring the fiscal cliff last year and potential solutions, while one lawmaker called on NJ Transit to pause the plan.
“Drastic fare hikes won’t solve NJ Transit’s structural financial problems, especially when the agency has never had a dedicated funding source, said Alex Ambrose, co-author of a New Jersey Policy Perspective analysis that proposed using the Corporate Business Tax surcharge for dedicated transit funding. “Policymakers chose corporations over New Jersey’s working families when they gave ultra-wealthy businesses like Amazon and Walmart a $1 billion tax cut.”
Officials cited an impending $119 million shortfall forecast for mid-2024 as the reason for the fare increase and cuts, which is when the agency will exhaust the last of $4.4 billion in federal COVID-19 aid that the agency has carefully spent down since 2020. Those funds have been used to offset revenue losses.
NJ Transit officials also cited increased costs, including $30 million for NJ Transit takeover or expand service to cover routes abandoned by three private carriers in 2023, Coach USA-ONE Bus, DeCamp and A&C, which all discontinued commuter bus service.
The plan assumes the agency will not receive additional funds in the state budget from the $142 million it received from the state in the current budget, NJ Transit officials said.
“At a time when the most people are struggling to make ends meet and when service is so unreliable with breakdowns (and) service suspensions, the fact that NJ Transit is considering raising fares by 15% is absolutely ridiculous,” said Charlton D’souza, Passengers United president. “We urge Gov. Murphy and the state legislature to reconsider this horrible decision.”
One legislative leader called on NJ Transit to pause the plan.
Before making a final decision, I urge the agency’s board to consider the impact higher fares will have on bus and train passengers who rely on NJ Transit’s service,” said Assembly Speaker Craig Coughlin, D-Middlesex. “I commend the agency for considering non-fare box savings and revenue enhancements to help close the budget gap. The legislature will continue to explore options to help support transportation in the state.”
Officials said the fare increase will address the 2025 fiscal year short fall but not the projected $917 million gap in fiscal year 2026 or the $957 million gap in fiscal year 2027. While the $917 million will be reduced to $766 million with the added revenue, officials said the solution to the structural deficit in how NJ Transit is funded will have to be addressed by the governor and legislature.
“Today’s fare hikes directly result from New Jersey’s continued failure to address a well-known problem, and NJ Transit riders deserve better,” said Zoe Baldwin, Regional Plan Association New Jersey director. “RPA believes that small and predictable fare increases make sense to offset rising costs, but a large one-time increase like the one announced today will cause unnecessary pain for families already struggling with a skyrocketing cost of living.”
“This moment of crisis for NJ Transit demands that the Legislature and Gov. Murphy provides increased funding for NJ Transit in the FY25 budget to close the budget gap – not sock it to riders,” said Doug O’Malley, Environment New Jersey director. “We urge the NJ Transit Board, Governor Murphy and the Legislature to work together to roll back this proposed fare hike – and for straphangers to show up at public hearings to call for funding equity for NJ Transit.”
State Senate President Nick Scutari issued a statement acknowledging the funding problem, but did not offer an immediate solution.
“New Jersey Transit is obviously in need of additional financial support, but continual fare increases will not fix the problem,” he said. “We simply cannot rely on everyday commuters to carry the burden of NJ Transit’s billion dollar deficit, nor should we count on one-shot funding mechanisms to fill the hole.”
“New Jersey Transit is obviously in need of additional financial support, but continual fare increases will not fix the problem. We simply cannot rely on everyday commuters to carry the burden of NJ Transit’s billion dollar deficit, nor should we count on one-shot funding mechanisms to fill the hole.
Other advocates said a fair increase places an unfair burden on disadvantaged riders who are essential workers, the working poor and those with no other option..
“The decision to raise fares is not just a matter of economics; it’s a matter of equity, social justice, and environmental responsibility,” said Renae Reynolds, Tri-State Transportation Campaign Executive Director.
She urged the Murphy administration and NJ Transit to reconsider the proposal and “prioritize taking a more balanced approach that includes exploring alternative funding sources and cost-saving measures that do not unduly burden our state’s transit riders and the environment.”
Similar to other transit systems across the nation, commuter ridership has been slow to return to 2019 pre-COVID-19 levels, officials said. While NJ Transit has seen a better ridership recovery that other systems, such as bi-state rail lines like PATH and PATCO, revenue was only 75% of pre-pandemic earning as as of October.
NJ Transit officials also cited inflationary cost increases in labor contracts and a 47% increase in health insurance costs as other drivers since the last fare increase, saying those and other costs have risen 30% since the last fare increase in 2015.
The announcement comes about a month before Gov. Phil Murphy delivers his budget message, which will outline any changes to state subsidy or aid to NJ Transit.
The situation mirrors the circumstances that led to a fare increase and budget cuts in 2015. NJ Transit approved a 9% fare increase in July 2015 to close a $56 million budget hole. Riders went for five years without a fare increase before 2015.
The fare increase would be the first under the NJ Transit reform law signed by Murphy in December 2018, and the first one under the Democratic governor, if approved. The law expands the number of hearings NJ Transit must hold if it wants to raise fares.
The only statewide transit agency in the nation, NJ Transit has faced a balancing act throughout its history when it comes to fares, having to weigh the effect of increases on working poor and essential workers riders who take buses. Typically, the agency has tried to keep the cost down of a one zone bus ride
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