(The following article by Larry Higgs was posted on the Asbury Park Press website on February 20.)
ASBURY PARK, N.J. — With another fare increase under consideration, outgoing NJ Transit director George Warrington once again is renewing a call for discussion of how to finance the commuter agency.
But board member and Belmar Mayor Kenneth E. Pringle has some specific ideas about looking at the agency’s expenses to determine what rightfully should be charged to riders and what should be funded by other means.
Warrington echoed comments by Damien Newton, Tri-State Transportation Campaign New Jersey Coordinator, that NJ Transit is doing right by ending a practice of siphoning off capital project money to cover operating expenses. Where Newton found fault was with state legislators for failing to come up with a stable funding formula to the agencies operating expenses.
Newton placed the blame for the fare increase and the responsibility for working on a stable funding source on the Legislature and other policy makers.
NJ Transit officials have projected a $60 million deficit without a 9.9 percent fare increase to cover such increased costs as fuel, labor contracts and expanded services. NJ Transit’s board is scheduled to vote on fares in April.
Mass transit advocates criticized the agency and the state for subjecting passengers to a third fare increase since 2000, while drivers haven’t seen an increase in tolls or the tax on gasoline in years.
Pringle’s idea is to identify sources of various pieces of NJ Transit’s operating expense pie and decide who should fund them.
We need to identify more carefully the internal elements that go to the cost of a fare increase and parse out the portion that ought to be borne by the riding public, Pringle said. As a board we need to look at it.
The agency received a $300 million state subsidy to cover operating costs last year, up $22 million from 2004. Advocates point out that the amount of the subsidy is strictly based on decisions by the governor and Legislature. It is not tied to factors such as inflation, an increase in riders or the cost of adding service or equipment.
Pringle suggested using multiple revenue sources to pay for increased expenses caused by inflation and expanding services when NJ Transit adds more buses and trains.
Expanding service and adding new lines are expected to cost $17 million in NJ Transit’s fiscal year 2008 budget. Cutting service when the number of riders is growing is not an option, Pringle said.
The agency has cut $75 million in costs over the past five years and has seen an increase in train and bus advertising revenue. But reliance on other revenue building tools, such as equipment leases and sales of excess real estate, is coming to an end, Warrington said.
Pringle said he’ll bring funding ideas to legislators, but added that the first cost analysis has to come from NJ Transit.
Over the coming months we’ll work with the (NJ Transit) staff and with the new executive director, and we’ll present our findings to the administration, he said. We have a lot of internal work to do.
Douglas Bowen, president of the New Jersey Association of Railroad Passengers said there are pluses and minuses in all the ideas.
We like that approach, Bowen said of Pringles’ proposal. There has to be a way to quantify this and to include expansion. You want something so we know the rules of the game each year.
He and Newton cited a double standard in how the state finances mass transit and highways, calling the hidden subsidy given to drivers the most successful form of socialism in the United States.
NJ Transit has not had stable funding except for its customers, Bowen said. The supposed fiscal conservatives say you’re supposed to pay your own way, and we say, ‘like you do on the road?’ Road users don’t pay their freight.
Newton also noted the disparity, especially in last year’s renewal of the Transportation Trust Fund. The state opted to rely on more borrowing instead of raising the gasoline tax to pump in revenues fund road and transit projects.
Ten months later, and here we go again, Newton said. The only people who see increases are the transit rider, and it’s not fair.
Bowen argued that mass transit should be treated like any other state service that provides an overall benefit. Even drivers benefit because increased use of mass transit helps reduce traffic congestion.
Ultimately the answer lies with state legislators, which advocates criticize for being the first to turn out at public hearings to criticize a fare hike, while being unwilling to tackle the long-term funding issue.
Someday, they will have to step up before something apocalyptic happens, such as if gas goes up to $5 a gallon, Bowen said.