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NJ Transit Riders Face 15% Fare Increase to Close Budget Gap

(Bloomberg) -- New Jersey Transit riders face a 15% fare increase, as the agency struggles to rebound from the pandemic, budget officials said Wednesday.

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Fare hikes are needed to close a $107 million budget deficit for the fiscal year beginning July 1, while maintaining current service. The agency, which operates New Jersey’s public transportation system, is also taking over bus service abandoned by private carriers like DeCamp, Coach USA and A&C Bus at a cost of $30 million.

The proposed 15% fare hike, which would go into effect July 1, would be followed by 3% increases each July 1 in perpetuity to account for inflation. New Jersey Transit last raised fares in 2015. The agency will hold public hearings on the proposed increase.

“A decision to propose a fare adjustment is always the last resort, having held the line on any increases for nearly a decade,” said NJ Transit President and Chief Executive Officer Kevin Corbett in a statement. “We recognize how critical public transit is to all our customers who depend on it, and that’s why we are adamant that reductions in service levels are off the table.”

Rider advocates slammed the proposal, saying that a large one-time increase will further squeeze families struggling with a skyrocketing cost of living.

“There are many ways to address NJ Transit’s looming fiscal cliff without resorting to such drastic measures,” Zoe Baldwin, New Jersey Director of the Regional Plan Association, said in a statement. “We are incredibly disappointed that none of the other options were seriously explored before riders were saddled with this fare hike.”

Transportation agencies across the US are facing budget shortfalls as pandemic aid dries up and ridership struggles to come back. At the onset of the Covid-19 pandemic, ridership plummeted and left many systems without a recovery plan. Now, years after the initial lockdowns, agencies are experiencing a slow rebound as many people work hybrid schedules, returning to offices only part-time.

New Jersey Transit’s weekday rail ridership is at about 70% of pre-pandemic levels. Ridership on Tuesdays through Thursdays, when going to the office is more common, is at approximately 80%. Bus ridership has bounced back faster, with ridership at about 90% of pre-Covid 19 levels. Lost ridership has cost the agency $2 billion in farebox revenue.

As part of its next budget, New Jersey Transit also proposed ending its FLEXPASS pilot program and implementing 30-day expiration dates on all one-way tickets.

The fare increase threatens to curb ridership, officials acknowledged. New Jersey Transit could lose 1.4% of its ridership the next fiscal year.

New Jersey Transit had initially projected a $119 million budget gap for fiscal year 2025 which starts July 1, the last year the agency has federal pandemic-relief aid. Despite the proposed fare increase, New Jersey Transit is still projecting a $767 million shortfall in the fiscal year beginning July 1, 2025.

Like all transit agencies, New Jersey Transit is facing rising costs for fuel, healthcare and labor. Healthcare costs have increased 47% since 2015 and the agency has raised wages for about 10,000 of its more than 12,000 employees as part of labor contract settlements, according to a news release.

Read more: DC Transit Sees Service Cuts, Thousands of Layoffs Amid Deficit

(Adds NJ Transit statement in fourth paragraph.)

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