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NJ TRANSIT OUTLINES FARE PLAN TO COVER NEW AND EXPANDED SERVICES

Improved monthly pass features include free feeder fares and flexible cross honoring

January 19, 2005
NJT-05-012

NEWARK, NJ –
At its regularly scheduled Board of Directors meeting today, NJ TRANSIT outlined its FY06 preliminary budget, including a proposed average fare increase of nearly 15 percent to cover the cost of new and expanded services, as well as inflation, and spiraling fuel and security expenses.

The proposal will be discussed at public hearings over two weeks in February before a final fare plan is taken up by the Board in April.

About 90 percent of the FY06 expenses will go directly to service delivery, with only 10 percent for administrative support for the operations.

"We’ve cut $50 million of expenses over the last couple of years and we are working hard to identify more efficiencies," said Executive Director George D. Warrington.

Under the proposal, interstate bus and rail fares would increase an average of 13 percent (ticket prices vary depending on the distance traveled), but feeder fares would be eliminated for monthly pass riders who make bus or light rail connections. Another new pass feature would enable commuters to use their passes to travel on any mode for any trip of equal or lesser value at no additional cost.

There would be no increase in fares for commuters who buy monthly passes for local bus, subway and light rail services. One-way (one zone) local bus, Newark City Subway, and River LINE tickets would increase from $1.10 to $1.25. Hudson-Bergen Light Rail fares, which were excluded from 2002 fare increases, would go from $1.50 to $1.75.

"The proposal is designed to maximize fare revenue yield, while minimizing the impact on commuters to the greatest extent possible," said NJ TRANSIT Executive Director George D. Warrington. "We also want to encourage intermodal travel by making it possible for customers to use their rail pass, for example, to take a train to work and a NJ TRANSIT bus home if they choose."

The fare increase is necessary to close a projected budget gap of about $60 million. The $1.42 billion budget includes $40 million for new service expenses and above inflation cost increases, of which $13 million is diesel fuel. It also includes core expense growth of 2.9 percent over FY05 – largely a result of labor costs (including fringes). The budget assumes $278.7 million in State assistance, the same level of support the Corporation received in FY05.

Since 2002, new service additions have caused rail and light rail expenses to grow twice as fast as bus and all other corporate expenses combined. Those new and expanded services include Secaucus Junction, River LINE, Hudson-Bergen Light Rail extensions, and the opening of the Montclair Connection; as well as the addition of more than 100 weekend and 83 new trains on an average weekday.

NJ TRANSIT’s fare proposal includes:

Commuter benefits

  • No increase on intrastate bus, subway and light rail monthly commuter passes. As a result, more than one in three local bus, subway and light rail passengers will experience no fare increase.
  • Improved interconnectivity of NJ TRANSIT services by offering weekly and monthly ticket holders the ability to connect to any mode at no extra charge, eliminating feeder fares for 1.1 million trips annually.
  • Additional flexibility for customers by making weekly and monthly passes good on any mode, all day, every day as long as the trip is of equal or lesser fare value (and with a simple step up fare if the cost of the trip is more than the value of the ticket), enabling customers to take a train in the morning and a bus home in the evening at no additional charge.
  • Other Fare Changes

  • The discount for rail off-peak, round-trip tickets (ORT) will be cut in half (from 25 percent to 12.5 percent). Historic pricing policy (dating back to predecessor railroads) was intended to induce off-peak travel. However, since 2002, NJ TRANSIT has added about 45 off-peak trains on an average weekday to keep up with the demand for off-peak service, which has become indistinguishable from peak travel on many lines.
  • The previously held down fares to Hoboken from Ho-Ho-Kus through Suffern and from Westwood through Montvale will increase by five percent in addition to the system-wide base increase. Metro-North had been paying NJ TRANSIT $700,000 annually to keep its fares low to coincide with Metro-North fares, creating a 25 percent difference in the cost of a ticket compared to what other NJ TRANSIT customers pay for a comparable trip elsewhere on the system.
  • The change-in-terminal fee will become a standard $3.10 for customers aboard Secaucus and New York-bound trains traveling with a Hoboken or Newark ticket. Currently, the fee is variable aboard Hoboken trains based on the boarding location, but is a flat fee on Newark trains.
  • Public Comment Encouraged

    To ensure an inclusive public comment process, the Corporation announced that hearings and information sessions would exceed what is statutorily required. Beginning in mid-February, 13 hearings will be conducted around the State including a Saturday information session for commuters unable to attend evening hearings. The hearings are also spread out over two weeks to maximize opportunities for attendance. NJ TRANSIT will accept public comments on the fare proposal in writing on its website, at customer service offices at major stations, and through the mail. The schedule of hearings is:

    • Tuesday, February 15, Passaic County Administration Building, Paterson and NJ Department of Environmental Protection, Trenton.
    • Wednesday, February 16, Camden City Hall and Wiley Publishing, Hoboken.
    • Thursday, February 17, NJ TRANSIT Headquarters, Newark and Somerset County Administration Building, Somerville.
    • Tuesday, February 22, Summit City Hall and Monmouth County Library, Manalapan.
    • Wednesday, February 23, Atlantic City Convention Center, the Port Authority Bus Terminal, New York City (informational session).
    • Thursday, February 24, Bergen County Board of Freeholders Public Meeting Room, Hackensack and Toms River Park & Ride.
    • Saturday, February 26, Edward J. Bloustein School, New Brunswick (informational session).

    Financial Outlook

    In his remarks, Warrington made clear that a one-time fare increase does not address the need to adequately fund transit operations in future years. By policy, NJ TRANSIT’s operating gap has been artificially masked since 1990 with more than $2 billion of capital that has been transferred to the operating budget. The FY06 budget assumes the capital to operating transfer remains capped at $356 million.

    "The sound policy decision not to increase the capital to operating transfer means that we’re exposing the structural operating funding gap inherent to all transit systems," Warrington said. "In New Jersey, every dollar of expense is only covered by about 40 cents in passenger revenue, which leaves 60 cents that must be funded. Going forward, we’re going to need to look at some combination of reasonable, periodic fare increases and an adequate level of public assistance."

    NJ TRANSIT is the nation's largest statewide public transportation system providing more than 752,600 daily trips on 240 bus routes, three light rail lines and 11 commuter rail lines. It is the third largest transit system in the country with 163 rail stations, 52 light rail stations and more than 17,000 bus stops linking major points in New Jersey, New York and Philadelphia.