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The List: The 10 U.S. Transit Agencies That Rely Most on Fare Revenues

NJ Transit isn’t the worst, but it has high ratio of funding derived from ticket sales rather than other sources, such as state budget or advertising sales

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As NJ Transit prepares to increase rail and bus fares by an average of 9 percent this year to cover rising costs, some opponents say the hike is particularly troubling given that the agency already depends more heavily on riders to pay its bills than many other transit organizations around the country.

Unlike similar agencies in Texas, California, Colorado and other states, NJ Transit and other New York-area transit operators receive relatively smaller portions of their operating budgets from local and state governments and other sources, such as selling advertising space.

As a result, when they run into budget shortages, they must go to their customers for more money, unless their governments change their funding policies substantially. That’s the situation NJ Transit is in now.

Transit advocates argue that since businesses and the state overall benefit from a robust publc transportation system that moves workers, takes cars off the road and reduces pollution, more state tax revenues should be funneled to NJ Transit while fares remain unchanged. Others argue transit systems should work toward becoming self-sufficient.

New Jersey’s newly passed budget actually boosts the state’s total contribution to NJ Transit to $390 million, largely by increasing diversions from the Clean Energy Fund by $22 million.

But the agency says that due to rising labor costs and other growing expenses it still faces a $60 million budget gap that make the fare hikes necessary.

The financial contribution provided by bus and train passengers can be measured by dividing the amount of fare revenue by operating expenses. The resulting figure is a percentage called the farebox recovery ratio.

Ratios vary widely around the country and the world, depending on how much it costs to run a transportation system, how much government contributes, and whether the agency has other sources of funds like parking garages and advertising.

Hong Kong’s rail system famously has the world’s highest ratio of around 185 percent, meaning its fare revenues are much higher than its regular operating costs, allowing it to spend the surplus on capital improvements and other expenses.

Meanwhile, some systems are heavily subsidized and rely much less on fares, like Dallas Area Rapid Transit in Texas, which has a recovery ratio of just 11 percent, according to U.S. Department of Transportation data. Some smaller agencies, like senior citizen bus services, charge nothing at all.

Calculations of recovery ratios vary according to the analyst’s definition of relevant fare revenues and operating expenses. NJ Transit claimed a 50 percent recovery ratio for fiscal 2014, though it included a substantial amount of of non-fare revenues.

Another report gives a figure of 58 percent, apparently by only considering rail and excluding bus service.

For comparison purposes, this article uses 2013 figures for the 50 top agencies in the National Transit Database, a program of US DOT’s Federal Transit Administration.

The NTD says NJ Transit’s fare revenues make up 40 percent of operating funds expended, ranking it ninth-highest among the 50 agencies. That puts it it roughly on par with the Port Authority’s PATH train and with the Metropolitan Transportation Authority, which operates New York City’s subways, buses and regional rail. The figures for other MTA divisions, including Metro-North and LIRR, are calculated separately.

Farebox recovery ratios are also available from NJ Transit for individual bus and rail lines, which vary widely. According to the agency’s methodology, its popular Northeast Corridor from Trenton to New York has an 88 percent ratio, while the Atlantic City Line is below 20 percent and the River Line light rail is at just 10 percent.

Top 10 farebox recovery ratios nationwide:

1.San Francisco Bay Area Rapid Transit, California: 65%

2. Metro-North Commuter Railroad, New York: 55%

3. MTA Long Island Rail Road, New York: 48%

4. Washington Metropolitan Area Transit Authority, D.C.: 46%

5. Northeast Illinois Regional Commuter Railroad (Metra), Illinois: 45%

6. San Diego Metropolitan Transit System, California: 43%

7. Chicago Transit Authority, Illinois: 42%

8. MTA New York City Transit, New York: 41%

9. NJ Transit, New Jersey: 40%

10. PATH, New Jersey/New York: 40%

(Data for Puerto Rico’s mass transit agency were incomplete and omitted from this analysis.)

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