Debate over how to fund New Jersey transit reignites

Credit: (AP Photo/Mary Altafer)

The New Jersey Transit Authority plans to close a more than $100 million budget gap with its first fare increase in nearly a decade, highlighting how the state is helping one of the nation’s largest bus and rail agencies. Concerns are rising once again.

New Jersey Department of Transportation officials say a 15% fare increase scheduled to go into effect in July will cost billions of dollars in revenue as ridership drops due to the COVID-19 pandemic. It says it is necessary to offset the significant financial damage caused by the losses.

New Jersey Department of Transportation officials say they will need to raise fares by 3% annually for the time being, on top of the 15% fare increase proposed this year.

And these increases will not only partially offset the financial blow from the pandemic, but also contribute to the broader fiscal cliff, as the large amounts of federal aid that has propped up government agencies through the worst years of the pandemic will soon dry up. is approaching.

Impact on rider

In response to New Jersey Transit’s announcement, transit advocates are calling on Gov. Phil Murphy and the state Legislature to intervene to soften the blow for riders, including those in low-income areas who rely heavily on public transit. I’m looking for.

Advocates also highlight how the New Jersey Department of Transportation receives less funding each year from the state budget compared to pre-pandemic levels. It also renews its call to state policymakers to create new ways for dedicated revenue to flow directly into the New Jersey Department of Transportation. That way, agency employees won’t have to rely on financial aid from Trenton, which often fluctuates from year to year.

“The real solution is to continue to provide dedicated funding to the New Jersey Department of Transportation,” said New Jersey Department of the Environment Director, one of the many organizations that make up the coalition called the New Jersey Transportation Fund. Doug O’Malley said.

“At a time of crisis for NJ Transit, we are calling for the Legislature and Governor Murphy to increase funding for NJ Transit and give it to riders instead of funneling it to them,” O’Malley said. said.

common problems

To be sure, NJ Transit is not the only major mass transit agency facing significant financial challenges due to the pandemic and raising fares in response.

Last summer, the New York Metropolitan Transportation Authority raised fares on buses, commuter trains and subways by 4%. Fares on Washington, D.C.’s subway system also increased last year for the first time in five years, but low-income riders were offered some discounts to cushion the blow.

In neighboring Pennsylvania, officials who run the SEPTA system have begun warning of their own budget deficit and the possibility of both fare increases and service cuts.

New Jersey Transit officials say their plan to use fare increases to support a proposed $3 billion annual budget for the fiscal year that begins July 1 means no service cuts will be made. He emphasized that he meant it. Officials said the proposed 15% rate increase would help eliminate a projected nearly $107 million operating deficit for the fiscal year.

Additionally, in recent months, New Jersey Transit has been forced to cut service and add bus routes that have been eliminated by private carriers facing post-pandemic financial difficulties, officials said. This is not surprising since rising costs are also putting a huge strain on budgets. The New Jersey Department of Transportation generally estimates that inflation has increased by 30% since 2015, when the agency last increased passenger fares.

And looking only at the next few months, the New Jersey Department of Transportation’s budget projections show an estimated $760 million by the middle of next year, even with planned fare increases, as federal aid due to the pandemic ends. This indicates that the company must face a sales gap. Please dry completely by then.

More from Trenton?

The wild card for New Jersey transit officials as they prepare to hold a series of public hearings on proposed fare increases is the new state budget that Murphy is expected to present to lawmakers in late February.

What’s unclear at this point is whether Murphy, a term-limited Democrat, will seek to increase the roughly $140 million in general fund grants allocated to the New Jersey Transit Authority in the state’s current budget. .

But state legislatures, where Democratic leaders have championed carefully crafted “affordability” policies in recent years, could also help. To do so, they could consider increasing the annual budget for the New Jersey Department of Transportation themselves when drafting the next state spending bill. Lawmakers could also establish a type of dedicated revenue that would help sustain many peer agencies operating in other states.

In fact, a financial audit of New Jersey Transit Authority ordered by Murphy in 2018 found that funding for mass transit in other states, including dedicated revenue generated from sources ranging from sales taxes to ride-hailing fees to carbon credits, was It became clear that this was done in a variety of ways.

In contrast, the New Jersey Department of Transportation is forced to raise money from several different sources each year to supplement the revenue it receives from fares.

Other funding sources include an annual grant from the state budget and a long-term transfer of funds from the State Clean Energy Fund, which is supported by a surcharge on New Jersey’s utility bills.

Boost from toll roads

The agreement with the state also allows for the annual transfer of significant funds from the New Jersey Turnpike Authority, the agency that manages both the Garden State Parkway and the New Jersey Turnpike. Tolls on both roads will increase by 3% starting March 1, his office announced Tuesday, under a calendar-year operating budget that Murphy initially balked at and now plans to approve.

And when it comes to annual grants in the state budget, transportation advocates say it’s only been a few years since Murphy and lawmakers were able to provide the New Jersey Department of Transportation with $457.5 million from the budget’s general fund, about three times the current amount. He points out that it happened before. Subsidies for mass transit projects.

New Jersey Transit’s proposed fare increases may be more palatable to many mass transit commuters, including those who have enjoyed wage increases in recent years after the pandemic tightened the labor market.

“It is completely unacceptable that NJ TRANSIT, the state’s largest public transit agency and the third largest transit system in the nation, continues to be the only public transit agency of its kind without a dedicated, regular funding source. — Plainfield Mayor Adrian Mapp.

A study released last year by the influential Regional Planning Association estimated that New York City commuters living in North Jersey will have an average annual income of $138,000 in 2023. This is a significant increase in average wages for New York City commuters living in North Jersey compared to 2019. According to RPA research, $101,786.

But Plainfield Mayor Adrian Mapp, president of the New Jersey Association of Cities Mayors, another member of the New Jersey Transit Fund Coalition, said he believes low-income bus riders are especially likely to be bus riders in Elizabeth, Newark and New Jersey. expressed concern on behalf of residents of the city. Riders. Mr Mapp said they would be “disproportionately harmed” by the proposed 15% fare increase.

“Here’s the truth: NJ TRANSIT, the state’s largest public transit agency and the nation’s third largest transit system, remains the only public transit agency of its kind without a dedicated, recurring funding source. That is completely unacceptable,” Mapp said.