Many companies have had to make dramatic shifts or shut down because of COVID-19 and the state-owned New Jersey Transit Corporation is facing its own financial difficulties. To cope with the shortfalls, the massive transportation system is making many budget cuts and price increases.
Instead of shutting down due to bankruptcy from COVID-19, NJ Transit has used a federal relief fund to support its loss of revenue for the past five years. However, that fund is expected to be exhausted by 2025. A system wide fare increase of 15% was initiated on July 1, 2024. Additionally, an indefinite 3% fare increase every year will kick off on July 1, 2025.
NJ Transit has been the heart of New Jersey’s public transportation system for over 40 years, dating back to its opening in 1979. It is the nation’s third-largest provider of bus, rail, and light rail transportation covering 5,325 square miles and running through parts of New Jersey, New York, and Pennsylvania. In 2019 alone, NJ Transit ran 3,545 vehicles daily, transporting a total of 267.3 million people through the three states.
In 2019, the year prior to the COVID-19 pandemic, the average amount of revenue per passenger was up to $970.20; However, in 2020, that revenue decreased by 24.1%. It only got worse for NJ Transit in 2021, when the company experienced a 59.4% decrease in revenue. That is an 83.5% decrease spanning the first two years of COVID-19, a financial blow that no company ever wants to face.
As of right now, 2024 is shaping to be the fifth consecutive year where ridership was below pre-COVID-19 levels, leading to a loss of about $2 billion dollars for the state owned corporation.
Only about 80% of NJ Transit’s ridership has returned since the end of the pandemic. While little progress is still being made, it is not enough to support the necessary maintenance, improvements, and high safety and security standards needed for the comfort of its millions of daily riders. While these price increases are not convenient for anyone, NJ Transit says they are vital for the service to thrive and will result in a fully funded fiscal year for 2025.
However, many people are upset by this change, especially students in the city and people who commute for work. One Stevens student who depends on public transportation in order to get home is upset by this change. “The price increase is outrageous, and the quality of the system is not worth the amount that I have to pay now.” For students traveling from Hoboken to Port Authority in New York City, the bus ticket fare is now $4.00, $0.50 higher than the previous cost.
Despite all of the backlash on the 15% price increase, the quicker NJ Transit revenue returns back to pre-COVID-19 levels, the sooner they will (hopefully) stop the 3% annual increase. Through all of these challenges, NJ Transit has a difficult road ahead as it balances affordability and public support with financial solvency.
