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Why New Jersey Transit Defends Latest Round of Fare Hikes as Necessary

Dwindling state subsidy, budget shortfall, sizable loan repayment add up to more expensive tickets to ride rails and buses

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Faced with a huge budget deficit, a slashed state subsidy, and pressure to repay a big state loan, New Jersey Transit is turning to a fare hike that would average 9 percent for rail and bus commuters.

The agency is also seeking service cutbacks that will impact two rail lines and five bus routes to help close what it says is a $60 million budget deficit.

New Jersey Transit officials defended the proposed changes when they were announced yesterday afternoon, saying they are necessary to keep pace with increasing costs, including employee healthcare and other benefits. But Democratic lawmakers and commuter advocates criticized New Jersey Transit and Gov. Chris Christie’s administration, accusing them of hitting the state’s working families with higher commuting costs at the same time motorists are being shielded from a gas-tax hike that could go a long way toward solving the bigger structural problems the state has when it comes to transportation spending.

“I’m appalled at this terrible approach to transportation policy and astonished by the lack of regard for the working people of New Jersey who rely on New Jersey Transit to make ends meet,” said Assembly Speaker Vince Prieto (D-Hudson).

The latest state budget proposed by Christie would trim the New Jersey Transit subsidy from $40.3 million to $33.2 million for the fiscal year that begins July 1. That subsidy totaled $73 million during each of the prior two fiscal years, and has been as high as $320 million during Christie’s tenure, which began in early 2010, according to budget records.

Spokesmen for Christie, a Republican, referred questions about the shrinking state subsidy to New Jersey Transit, where spokeswoman Nancy Snyder pointed to other funds the agency has received in recent years, including money from the state’s Clean Energy Fund and from a funding agreement with the New Jersey Turnpike Authority.

“The reduction in Transit’s General Fund subsidy has been largely attributable to further utilization of other resources, including the Clean Energy Fund and Turnpike Authority monies,” she said.

Christie’s budget proposal for the next fiscal year is also hitting New Jersey Transit in another way. With existing sources of funding for the state Transportation Trust Fund, including the 14.5-cent gas tax and toll revenue, running dry, the Christie administration is counting on a $241.5 million loan repayment from New Jersey Transit to help sustain spending on its road, bridge, and rail improvements at prior levels.

Agency officials have said it’s unfair to consider that payment in the context of the fare hike, but commuter advocates disagreed yesterday.

“The transportation-funding structure in New Jersey is broken and transit riders alone should not be responsible for fixing it,” said Veronica Vanterpool, executive director of the Tri-State Transportation Campaign, an organization that advocates for better transportation policy in the Connecticut, New Jersey, and New York region.

“This proposed 9 percent fare hike would be the eighth time fares were raised for New Jersey Transit riders since 1988, the year the state's gas tax -- the second lowest in the nation -- was last increased,” she said.

Christie and legislative leaders had been negotiating a new source of revenue for the state Transportation Trust Fund for much of the last year, including possibly an increase of the gas tax. But they have been unable to strike a deal since the governor has begun to explore running for U.S. president in 2016 and lawmakers have begun to focus on this year’s legislative elections. All 80 seats in the state Assembly are up for grabs in November.

“With the various funding options on the table, it is inexcusable to stick the bill to New Jersey Transit users,” Vanterpool said.

Jeff Tittel, director of New Jersey’s Sierra Club, vowed to fight New Jersey Transit’s proposed changes.

“We can raise transit fares but not the gas tax. This is outrageous,” Tittel said.

Lawmakers, meanwhile, took aim at the impact the fare hikes and cutbacks would have the state’s working people and noted the changes come even as the state subsidy has been cut, but overall spending has increased.

“This is both unsustainable and irresponsible,” said Assemblyman John Wisniewski (D-Middlesex), the chair of the Assembly’s Transportation Committee.

New Jersey Transit’s last fare hike was in 2010 when rail and some bus fares were increased by as much as 25 percent.

Agency officials said the new proposed fare hikes and service changes are still necessary even after the agency, which spends roughly $2 billion on operations annually, found $40 million in savings by looking at overtime, fuel, energy, and vehicle-parts expenditures. Rising costs tied to employee benefits, liability insurance, and workers’ compensation make the changes necessary.

“The agency still faces an approximate $60 million budget gap for the 2016 fiscal year,” New Jersey Transit said in a press release.

“To close the gap, fare and service adjustments are being proposed,” the agency said.

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According to examples provided by New Jersey Transit, the fare increases would cost a monthly commuter traveling between Metropark and Penn Station in New York an extra $26 each month. The same daily trip would cost an additional $1.50 roundtrip.

For bus commuters, a one-way trip between Lakewood and the Port Authority Bus Terminal in New York will cost an additional $1.50. A monthly commuter using that bus route will pay an extra $37.

A one-way ride on the Camden-to-Trenton River Line light rail will go from $1.50 to $1.60, and monthly passes will increase by $4.

Proposed service changes would impact the Pascack Valley and Montclair-Boonton rail lines, and five different bus routes, the agency said.

New Jersey Transit will hold a public-information session on the proposed fare hikes and service changes on May 16 at the New Brunswick Public Library from 1 p.m. to 4 p.m. Commuters will also have nine opportunities to weigh in during public hearings scheduled to be held next month.

The public hearings will be held on May 18 from 5:30 p.m. to 8:30 p.m. at the Atlantic City Rail Terminal and at the Monmouth County Agricultural Building in Freehold; on May 19 from 5:30 p.m. to 8:30 p.m. at the Frank R. Lautenberg Station at Secaucus Junction and at Camden City Hall; on May 20 from 5:30 p.m. to 8:30 p.m. at New Jersey Transit Headquarters in Newark and at the Learning Center in Hackensack; and on May 21 from 5:30 p.m. to 8:30 p.m. at the Trenton Transit Center, Morristown Town Hall and at the Paterson Museum.

New Jersey Transit’s Board of Directors right now is planning to vote on the proposed fare increases during its July 8 meeting. If approved, the changes would take effect beginning in September and October.

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