(The Center Square) – New Jersey Transit ridership has seen a 40% drop in ridership since pre-pandemic levels while its spending has increased.
That has led to the agency to project a $119.4 million deficit in fiscal year 2025 and then a $917.8 million deficit in FY 2026.
The deficits are projected at a time the transit agency will be running out of federal emergency relief funding. New Jersey Transit’s reliance on federal funding for the system’s operating budget has increased from $404 million in 2019 before the pandemic to $1.5 billion in 2022.
With federal funding expiring, many advocates for transit are asking for a new revenue stream.
New data released by the Federal Transit Administration showing New Jersey Transit operating costs have jumped from $2.4 billion in 2019 to $2.7 billion in 2022.
Like other transit agencies, New Jersey’s bus transit system was hit during the pandemic. In 2019, the bus ridership was 267.3 million, which plummeted to 109.8 million in 2021 and increased to 160.3 million in 2022.
The New Jersey transit is expecting to continue to use federal COVID-19 relief funds from the American Rescue Plan Act to help reductions to revenue in efforts to offset the need to cover expenses through fiscal years 2023, throughout fiscal year 2025 according to documents.
The transit system collected $979.9 million in fare revenues in 2019 and $540.8 million in 2022.
During the pandemic, several transit agencies heavily relied upon federal funding. In New Jersey, that meant federal funding for operating expenses increased from $2.4 billion in 2019 and 2021 to $2.7 billion in 2022.
Now, some advocates for transit are asking for a new stream of revenue to replace the disappearing federal money that will be ending soon.
Felicia Park-Rogers, director of infrastructure projects for Tri-State Transportation Campaign, is also speaking out and urging the Governor to implement a dedicated funding source. “The state alone can protect transit riders and essential workers from excessive fare hikes and a death spiral of service.” according to her testimony.
Gov. Phil Murphey has said “everything is on the table” regarding finding ways to solve the current transit crisis.
One of the plans to help the crisis is to tax businesses that receive over $1 million in profit with a 2.5% surcharge for five years.
The transit is expected to see a $120 million budget deficit this July, increasing to $918 million for Fiscal Year 2026.
“It’s a work in progress. It’s not hanging over our head tomorrow … this is really two years from now, but we’re going to be laying the tracks, no pun intended, working with NJ Transit to figure that out,” Murphy said at a New Jersey Business and Industry Association event according to northjersey.com.
The New Jersey Department of Transportation didn’t return an email seeking comment.
