When we first heard word of a looming New Jersey Transit fare hike — the first since 2010 but fifth since 2002 — initial reports indicated the raise could be as much as 25 percent. Now that the budget numbers are coming into view, that steep hike seems to be off the table, and fares may go up by only nine percent in the coming months. But the reprieve may be only temporary as a variety of factors are at work that could push NJ Transit fares even higher in coming years.
The Wall Street Journal broke news of the hike last night. The nine percent figure is designed to help close a budget gap of $80 million. Andrew Tangel reports:
NJ Transit is expected to propose a 9% fare increase as the operator of commuter trains, buses and light rail faces a budget shortfall, a person familiar with the matter said on Tuesday. The agency is expected to announce the proposed fare increase—its first in five years—along with potential service adjustments as soon as this week, this person said. Any fare increase would be subject to public hearings and an eventual vote by the agency’s board.
It wasn’t immediately clear how much individual fares for NJ Transit’s various systems might rise under the proposal. But the proposed increase is well below the last one, in 2010, when the agency raised fares by 22% on average. NJ Transit faced a $300 million budget gap then. This time there is an $80 million deficit to close…
NJ Transit officials have said they realize the previous increase was difficult for riders to stomach. This time, they have said, the aim is to keep any increase in the single digits as they try to close the gap in the agency’s fiscal 2016 budget, which takes effect July 1. In recent weeks, NJ Transit officials have been looking to trim expenses across the agency, and said they had found about $40 million in savings. But the agency has faced rising expenses, such as labor and benefits costs, and it remains in negotiations with unions representing its employees.
But that’s all short term. There are a pair of long-term issues that could affect New Jersey transit fares in the coming years. First, an annual subsidy of nearly $300 million from the New Jersey Turnpike Authority may end after next June, and second, due to a federal mandate that Amtrak run the Northeast Corridor like it a business, rent owed by New Jersey Transit to Amtrak may increase by around $20 million annually. If this worst-case scenario comes due, NJ Transit may have to hike fares by 30 percent to continue to maintain current service levels.
As I noted last month, this constant talk of NJ Transit fare hikes is in stark contrast to the fact that New Jersey’s gas tax hasn’t increased in a generation. For a state that, whether it admits it or not, relies so heavily on its rail network and can’t take more traffic on its clogged roads, this situation will quickly grow untenable. Where, I wonder, is the breaking point?