A report in today's Newark (N.J.) Star-Ledger indicates that NJ Transit may consider a fare increase for the first time since 2002, just as Gov. Jim McGreevey is about to resign from office (and not soon enough, some say).
NJ Transit warned yesterday that it may impose a 15 percent fare increase on its 375,000 bus, train and light rail passengers next year to close an impending budget gap of up to $65 million.
Transportation officials blamed the potential fare hike on skyrocketing expenses for things like fuel, security and employee health benefits, as well as on the loss of financial maneuvers they previously used to balance past budgets.
The agency this year expects to collect about $560 million in fares, which covers about 43 percent of its $1.3 billion operating budget. State taxpayers pick up most of the rest of the tab.
The proposed increase comes during a changing of the guard in Trenton and ultimately would require the approval of Senate President Richard Codey, who becomes acting governor next week.
"He's looking at this as a last-resort option," said Kelley Heck, Codey's spokesperson.
Dissatisfied commuters -- who were hit with an average 10 percent increase in 2002 -- say another fare increase would be an insult.
"With the service they currently provide, I think I am paying too much now," said Matt Wagner of North Plainfield, who commutes on the Raritan Valley Line. "An additional 15 percent might force me back to driving."
"Hiking the fare would just be throwing good money after bad unless NJ Transit guarantees up front that the extra money would go to improve service and run the trains on time," said Greg Storey of Roselle Park, another Raritan Valley Line rider. "I've been riding NJ Transit for over 18 years and its service and the customer-be-damned attitude of its management are as bad as I've ever seen."
NJ Transit Executive Director George Warrington and state Transportation Commissioner Jack Lettiere promised yesterday to do everything possible to try to minimize the size of the increase or to avoid it altogether. They said they were not considering cutting services -- even though operating at large deficits -- to close the budget gap.
"We're still early in the process," Warrington said.
"We have our work cut out for us," Lettiere said.
The exact size of the increase may vary for NJ Transit's buses, trains and light rail systems as well as for different lines within those modes of transportation.
By January, officials said they would put together a plan with specific details on the increase. In February, they expect to hold public hearings on the hike, which most likely would take effect in July, officials said. A 15 percent increase would produce about $55 million in extra revenue, officials said.
If anyone recalls the hearing held at Walter Rand Transportation Center, then you can expect these hearings not to go too well. While NJT had reduced some of its proposed fare hikes and modified some of its fare policies to make it more user-friendly in some modes, the hearing itself was held inside the lobby of the transportation center, making it difficult to hear many of the comments. That said, I'd expect more details to become available in the near future...
Warrington said his agency faces a $15 million increase in fuel costs next year, an extra $13 million for security measures and rising health insurance costs that already have jumped by $37 million annually since 2001.
In the past, NJ Transit has been able to rely on two financing maneuvers to close budget gaps.
First, it has used about $350 million per year that was borrowed for big projects to cover operating expenses. But officials said they do not want to take a bigger cut out of the capital budget money.
Officials also have used about $48 million over the past four years from so-called leveraged lease agreements -- which are basically deals that allow private investors to pay a fee to NJ Transit to buy the tax benefits of the depreciation on transit equipment. But the federal government last year placed a moratorium on leveraged lease deals nationwide because of the loss of tax to the U.S. Treasury.
As part of its 2002 hike, NJ Transit had the option of imposing 3 percent fare increases for inflation in each of the past three years, but the agency decided not to do so. Officials acknowledged that if they followed through with that plan, they would not need a steep hike now.
"At the time, Governor McGreevey was very concerned about a fare increase in uncertain economic times," Lettiere said.
Jeffrey Warsh, Warrington's predecessor as NJ Transit's executive director, said yesterday that the McGreevey administration reduced its subsidy for mass transit in 2002, effectively shifting the proceeds from that year's fare hike into the state's general treasury.
"The public needs to be assured that the proceeds for any future fare increase will be applied exclusively to the NJ Transit system," Warsh said.
Yes, another wonderful legacy of the McGreevey administration. Robbing NJT to pay for some of his pet projects on top of tax hikes.
Indeed, riders yesterday said they would be more tolerant of a fare hike if they believed their commutes would improve.
Anthony Baldo, a Middletown resident who rides the North Jersey Coast Line, said the agency needs to fix equipment that frequently breaks down and should come up with better contingency plans for whenever there are service disruptions.
Tom Schopper of Bloomingdale said NJ Transit ought to improve security at its bus park-and-ride on Route 23 in Wayne, where he said cars are often broken into.
Anthony Buccino of Nutley said the agency should provide better information about bus connections at its new -- and uncomfortable -- Newark city subway station at Branch Brook Park.
"NJ Transit is increasing fares while service delays have increased, customer service has gotten worse, maintenance of rail cars has been minimal," said Michael Weinstock, a rail rider from Scotch Plains. "Many cars have electrical tape holding things together, cars haven't been washed on the outside in ages, conductor interaction with passengers is more confrontational given the encounters I have witnessed over the past year, and communication with commuters when there are delays is minimal and usually sporadic."
"Passengers are being asked to pay more for less," Weinstock said.
That's not even including how bad bus service is in some parts of South Jersey, particularly the Washington Twp routes where the Flxs operate (400, 403, 406) and some runs out of Newton Av garage (404, 405, 407, 413, 419), where the 1988-era Flxibles continue to chug on - barely, in some cases - while North Jersey seems to get preferential treatment when it comes to newer buses. Supposedly, new buses are on order to replace the 1988 Flxibles, but when they're going to get to South Jersey remains to be seen.