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Additional administrative cost-cutting benefits commuters

April 21, 2005

NEWARK, NJ – The NJ TRANSIT Board of Directors today approved an FY 2006 fare plan that delivers lower than expected fare increases for many commuters, as a result of $12.6 million in additional internal management efficiencies and revenue enhancements.

Under the plan, which will take effect July 1, commuter rail and interstate bus fares will increase an average of 9.9 percent—down 25 percent from the original proposal. This level of increase is consistent with inflation, which already totals 9 percent since April 2002 (last fare increase), and is widely expected to exceed 10 percent by July.

“We’ve reduced the fare requirement more than 20 percent by aggressively cutting overhead costs without impacting service to our customers,” said New Jersey Transportation Commissioner and NJ TRANSIT Board Chairman Jack Lettiere. “This is a fiscally prudent plan that reflects Governor Codey’s direction to tighten our belts.”

The internal efficiencies include more than $8 million in management cost cutting actions, combined with more than $4 million in new revenues, enabling the Corporation to reduce an FY 2006 budget gap projection of $60.6 million to $48 million, before the fare increase. Building on roughly $50 million in cost savings over the past three years, NJ TRANSIT Executive Director George D. Warrington detailed further cost-cutting actions, including a freeze on senior management salaries, abolishing 25 management positions, reducing overtime by 2 percent, and continuing management controls on travel and third-party service contracts.

Warrington also said he was forecasting a 12 percent increase in commercial revenue including aggressive advertising sales, which have shot up by more than 30 percent since NJ TRANSIT contracted with Titan Outdoor in June 2004 to sell its equipment and facility outdoor space to local, regional, and national advertisers.

In addition, the Corporation is optimistic that it will be able to generate $3.2 million in revenue by executing one more cross-border leveraged lease transaction, which is permitted under a grandfather provision in the new federal ban on such financial transactions.

These internal efficiencies and revenue enhancements enabled the Corporation to roll back its original fare proposal in response to specific customer feedback.

Customer input incorporated into final plan

NJ TRANSIT held 13 hearings statewide from February 16-26, at which 154 people offered testimony. The agency also received 309 emails and 13 letters from customers regarding the fare proposal and core services.

“We listened to our customers throughout the fare hearing and comment process and we’ve made adjustments to the proposal that reflect many of their good ideas,” said Warrington.

Revisions to the original fare plan include:

  • Roundtrip off-peak tickets will be discounted at 15 percent. The original proposal cut the discount in half (to 12.5 percent) for incidental riders who travel outside the rush hour periods.
  • Simplification of the “change-in-terminal” (CIT) fee to either $2 or $3, depending on the customer’s boarding location. The CIT fee is charged onboard a train when a customer holding a Hoboken or Newark ticket or pass opts to travel to Secaucus or New York instead. The original proposal included a flat CIT fee of $3.10 from all boarding locations.

  • Elimination of “intra-Camden” bus fares, a confusing part of the fare structure aimed at differentiating between interstate and intrastate travel. As a result of this action, bus customers from Camden to Atlantic City and Shore points will see a decrease of about 10-35 percent for one-way tickets, depending on boarding location.

NJ TRANSIT customers will benefit from new interconnectivity features of rail tickets: Commuters holding monthly rail passes will be able to use them on all other modes (bus and light rail) for trips of equal or lesser value. In addition, feeder fares, which provide rail customers with continuing transportation on light rail or local buses, will become free for both monthly and weekly rail pass holders. NJ TRANSIT rail customers take approximately 1.1 million feeder trips annually.

The fare plan also provides for no fare increase for local bus and light rail commuters who purchase monthly passes. Single trip tickets will rise as proposed from $1.10 to $1.25 for local bus (one zone), City Subway and River LINE tickets; and from $1.50 to $1.75 on Hudson-Bergen Light Rail.

Initiatives underway to improve service

Mr. Warrington also announced several initiatives that address many of the specific concerns regarding equipment and customer service that commuters raised at public hearings:

  • Improved public address and signage systems – A program is underway to replace outdated public address and dynamic signage systems with modern hardware and software linked to a central network, with real-time train status and system information. To date, there are 19 facilities that either have or will receive upgrades, including transit’s flagship station at Newark.
  • Newark Operations Center (NOC) at Newark Penn Station – The NOC will be established to improve communications and customer service, modeled on the successful Terminal Operations Center (TOC) in NY Penn Station. The NOC will facilitate better coordination between multiple NJ TRANSIT operations (Rail, Bus, City Subway) and customer service groups, as well as with Amtrak and PATH.

  • Easier to read timetables – Working with customer focus groups, NJ TRANSIT has developed a new, easier-to-understand design for rail timetables, which will be printed in-house at a cost savings of $140,000 annually. Customers can expect to see the new design in June 2005.

  • Improved Access Link customer service – NJ TRANSIT today announced that the Corporation was completing implementation of an Access Link reservation and scheduling system that will enable customers to get real-time status information for their trip.

  • New bus and rail equipment – NJ TRANSIT is currently in the process of modernizing its bus and rail fleet, including the replacement of nearly 300 Metro B Buses, which entered service in 1989. In addition, the first of 100 new multi-level rail cars, which will increase capacity on existing trains, will be delivered later this summer.

Future funding policy

Mr. Warrington noted that the fare increase this year does not address the long-term, structural funding challenges facing NJ TRANSIT.

“To provide a long-term, structural fix to the economic model looking forward, transit funding policy needs to identify both adequate public capital and operating support, as well as predictable, inflation-based fare increases,” Mr. Warrington said.

NJ TRANSIT is the nation's largest statewide public transportation system providing more than 779,200 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 162 rail stations, 52 light rail stations and more than 17,000 bus stops linking major points in New Jersey, New York and Philadelphia.