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Double-digit fare hikes coming to NJ Transit riders as agency faces massive deficit

By RY RIVARD, Politico

01/24/2024 03:04 PM EST

NEW YORK — New Jersey Gov. Phil Murphy’s administration is proposing 15 percent fare hikes for New Jersey Transit riders, an increase that will hit some of the state’s most vulnerable residents and tens of thousands of people who commute to New York City for work.

The double-digit fare increases come weeks after Murphy rejected calls to use a corporate business tax to help fund NJ Transit and, they are the first fare hikes since Murphy took office in 2018.

Combined with the pandemic and longstanding funding issues, Murphy’s politically popular flat fares — which the governor announced each year to fanfare — contributed to a massive budget deficit at NJ Transit in coming years. In addition to the 15 percent increase that would take effect this summer, the administration also plans to have annual 3 percent fare increases starting next summer.

The fare hikes come as Murphy faces criticism for blocking funding to New York’s mass transit agency through his opposition to toll increases that would fund the Metropolitan Transportation Authority.

The administration portrayed the NJ Transit increases as a necessary option of last resort to avoid a death spiral and said by increasing fares now they could maintain service in the coming years at the nation’s third-largest transit agency. There has not been a fare hike for nine years. The annual increases will create a more predictable increase, following this year’s large one — something like what the MTA has been doing for subway fares.

Under NJ Transit’s plan, the least expensive one-way bus trip would increase from $1.60 to $1.80. Interstate trips from Jersey City to Manhattan would increase to $4 from $3.50.

In past years. Murphy has held press conferences or released videos to tout flat fares. This year, he had no events on his public schedule and left it to officials in his administration to explain the increases. After years of championing no increases, he warned last year that fare hikes were likely to come.

Jersey City Mayor Steven Fulop, who is running for governor in 2025, said the increases are “unacceptable.”

“Despite the rhetoric of a fairer NJ this is clearly the opposite and only undermines trust,” the mayor said on social media.

Ridership remains below pre-pandemic levels on average. NJ Transit’s budget has largely been propped up since the pandemic by federal relief money, which is running out.

Zoe Baldwin, the New Jersey director of the Regional Plan Association, said the state has been playing a kind of shell game with its own money for the agency. Its state operating subsidy has fallen from over $450 million before the pandemic to less than $150 million in the current budget year.

“It’s outrageous to stick riders with double-digit fare increases when the state is so far below its own benchmark,” she said.

When Murphy came to office, he quickly got to work fixing NJ Transit by hiring train engineers, meeting a pressing deadline to improve train safety and diverting hundreds of millions of dollars of toll revenue to NJ Transit. But the increases threaten to erode Murphy’s reputation in the state as he enters the back half of his second term.

The timing of the fare increases also appeared likely to distract from a Murphy political win. Earlier on Wednesday, the state’s Board of Public Utilities approved a pair of new wind farms that will help the governor meet some of his ambitious clean energy goals. But because mass transit is also considered a way to reduce greenhouse gas emissions — since busloads and trainloads of people keep polluting cars off the road — environmentalists would likely pan extra costs that make it harder to ride buses and trains.

The move was sure to disappoint Murphy’s allies, since the fare increases came without a real plan to deal with a larger budget deficit that is now about $800 million, down from nearly $1 billion before the fare increases.

The fare increases are also likely to put more pressure on Murphy to find a new way to fund NJ Transit, pitting him against some lawmakers and progressives who want to increase corporate business taxes. The governor aligned himself with the business industry and let those taxes go down at the end of 2023, even though some of his usual allies were urging him to keep it in place to fund transit.

The current state Senate president, Democrat Nick Scutari, had floated the idea of higher corporate business taxes to help NJ Transit, something Murphy rejected. The previous Senate president, Steve Sweeney, had a similar plan in early 2020 that went nowhere amid the exigencies of the pandemic.

Last year, Diane Gutierrez-Scaccetti, who then chaired the NJ Transit board and is now the governor’s chief of staff, had pushed the idea that the transit agency should find ways to save money before asking lawmakers for more money.

NJ Transit said it has found about $44 million in such efficiencies after an intensive internal assessment.

The fare hike proposal will now be put out for public comment through March 8.

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