Despite Last-Minute Appeals and Arguments, NJ Transit Approves Fare Hikes

Meir Rinde | July 16, 2015 | Transportation
No surprises in agency’s formal approval of 9 percent increase, but that doesn’t take the sting out of the decision for commuters

nj transit
Transit advocates and elected officials knew for months that NJ Transit was unlikely to diverge from its plan to hike fares by 9 percent, but yesterday’s formal approval of the increase still drew howls of protest and predictions that the higher fares would drive commuters away from trains and buses and onto the state’s underfunded roads and highways.

After hearing from dozens of speakers opposed to the increases and accompanying service cuts, the transit agency’s board adopted a $2.1 billion budget, with just over $1 billion coming from fares.

Gov. Chris Christie and some rail experts say the hikes were to be expected considering NJ Transit’s rising costs, but the increases mean it will remain more dependent on rider fees — as opposed to state subsidies — than most transit agencies across the nation.

Advocates criticized Christie for endorsing a strategy of increased transportation costs for working people via toll hikes and higher bus and rail fares while rejecting outright tax increases that could hurt his anti-tax credentials as he runs for president.

“Mass transit may not be a popular issue in New Hampshire or Iowa, but it is a critical issue in New Jersey,” said Senate Majority Leader Loretta Weinberg (D-Bergen). “We need a governor who is willing to do the work necessary to address the state’s needs, rather than make decisions based on a national political agenda.”

The fare increases, which top out at 9.4 percent for some routes, will go into effect October 1. A round-trip train fare between Metro Park and New York will increase $1.50 or 7.5 percent to $21.50, while the monthly fare will rise $26 or 9.2 percent to $310, according to the agency. The monthly commute from Trenton to New York will cost $480, up $40 or 9 percent, the New Jersey Sierra Club said.

Bus travel between Gloucester City and Philadelphia will cost 9 percent more, with a one-way ticket going up 35 cents to $4.25 and a monthly pass increasing $11 to $134.

Shared blame

Much of the criticism of yesterday’s vote came from a broad group of environmental, labor, transportation advocacy, and public policy organizations called New Jersey for Transit, including Environment New Jersey, New Jersey Policy Perspective, Tri-State Transportation Campaign, and many others.

“The transportation funding structure in New Jersey is broken in terms of capital and operating needs. NJ Transit fares already outpace inflation by 25 percent and New Jersey riders pay the highest fares in the nation,” said Janna Chernetz, a policy analyst for the Tri-State Transportation Campaign.

“Since New Jersey Transit receives one of lowest amounts of government funding compared to its counterparts, more of the budget falls on the backs of New Jersey commuters,” NJ Sierra Club president Jeff Tittel said. “NJT commuters are already overburdened with transportation costs, and this will force more cars on the road. These changes are really a hidden tax on businesses and commuters in New Jersey.”

Senate President Stephen Sweeney (D-Gloucester) was among many Democrats who piled on, criticizing the administration both for the fare hikes and for not endorsing an increase in the gas tax to better fund the state Transportation Trust Fund. The TTF, which pays for roadwork and NJ Transit capital expenses, will run out of money for new projects next year if additional funding is not identified.

“I am severely disappointed that the administration is raising fares on the state’s commuters,” Sweeney said. “This is the result of the administration’s failure to engage in long-term planning or to make the transportation investments that would meet the state’s needs, serve its residents, and support economic growth. The refusal to renew the Transportation Trust Fund is one of the more glaring failures.”

However, New Jersey for Transit said the Democratic-controlled legislature shared the blame for the hikes because it “rubber-stamped” Christie’s budget for fiscal 2016 despite insufficient transportation funding.

“Once-promising legislative efforts broke down immediately after the governor presented his budget and there is little sign of political will to reengage the conversation,” Chernetz said.

An inevitable increase

Christie, who was busy picking up a presidential campaign endorsement from Maryland Gov. Larry Hogan yesterday, said the hike was not very significant because NJ Transit has not boosted fares since 2010, when they soared 25 percent. He said the average increase over time has been less than 2 percent a year.

“We’ve managed it very, very fiscally responsibly,” Christie reportedly said. “No one ever likes to see fares go up, but you know, in this world, increased service, increased wages all cost money and the state’s putting a lot of money into New Jersey Transit and we’ll continue to do so, but riders have to bear some of that responsibility as well.”

Some transit experts agree that a fare hike is not unreasonable given the agency’s financial needs, even though many criticize Christie’s transportation policies more broadly.

Martin Robins, a former NJ Transit executive and the dean of the state’s transportation experts, has said higher fares were bound to happen eventually, and arguably should have come sooner. He said they’re more dependable than the funding “gimmicks” the state has been using such as diversions of Clean Energy funds, which are added to utility bills and are meant to support energy-efficiency projects.

Richard Barone, director of transportation programs for the Regional Plan Association, told the Associated Press that NJ Transit has higher costs now than in past years, when fares were kept lower to attract more riders.

“They’re adjusting because it’s popular and there’s a need to maintain the system and figure out how to pay for it,” he said. “They’re right-sizing it.”

NJ Transit executive director Veronique Hakim said the agency started its budget process with a projected $120 million deficit, which it attributed to the rising costs of workers’ compensation, insurance, healthcare, benefits, and pensions, as well as contracted services including Hudson-Bergen Light Rail, Access Link for disabled people, and private carriers. About 59 percent of the new budget goes toward labor and benefits.

The agency will also pay back a $242 million loan from the Transportation Trust Fund, prompting charges that the fare hike is a backdoor tax increase on transit riders to pay for road and bridge repairs.

Feeling the impact

The deficit was whittled down in part through identifying $40 million in reductions in overtime, fuel savings, and vehicle parts spending, the agency said. The gap to be closed through higher fares and service cuts was ultimately reduced to $56 million. Based on the new fare schedule and ridership trends, NJ Transit is projecting that passenger revenue will increase by $77 million in fiscal 2016.

The state is actually spending $22 million more on NJ Transit this year, albeit from some controversial sources. Of the $390 million Christie budgeted for the agency, $62 million will come from the Clean Energy Fund, up from $33 million last year. Meanwhile, the state’s main subsidy for NJ Transit is dropping from $40 million to $33 million, far less than the $348 million allotted in 2009.

[related]The service reductions will go into effect September 1 on two train and six bus lines. The Pascack Valley and Montclair-Boonton rail lines will each lose one late-night departure, and three bus lines in central Jersey that are subsidized by businesses will be discontinued: the 307 and 319 to Great Adventure in Jackson, and the 655 from Princeton to the University Medical Center in Plainsboro.

Service will be eliminated between Riverside and Burlington City on the 419 bus and between Parsippany and Livingston Mall on the 872, and the last evening trip in each direction will be eliminated on the 463 between Woodbury and Avandale Park & Ride in Sicklerville.

NJ Transit’s efforts to manage its labor costs could also pose a more immediate threat to riders. All 20 of NJ Transit’s unions are working under expired contracts, and an impasse in negotiations led a train engineers union to authorize a strike last week. Yesterday President Obama named an emergency board to mediate the dispute, triggering a four-month cooling-off period that bars a strike or worker lockout.