Tale of two transit systems: New York, on track, watches as New Jersey heads toward a cliff

In a stark display of political will on one side of the Hudson River and can-kicking on the other, New York solved budget problems facing its mass transit system on Wednesday while New Jersey ignored ones that threaten its own bus and train commuters.

Transit systems in both states were facing a crisis.

In Gov. Kathy Hochul’s New York, the Metropolitan Transportation Authority has a balanced budget through 2027 following the Wednesday approval of modest fare increases. Paired with tax and casino revenue from a budget deal this spring, the move ends a pandemic-era saga at the nation’s largest transit agency.

In Gov. Phil Murphy’s state, NJ Transit has less than year to plug a $119 million budget hole that could force fare increases, service cuts or layoffs, with an even larger $917 million shortfall coming in 2025.

Even as New York officials took a victory lap for their work and planned for congestion pricing tolls that will send even more money to MTA's coffers, they flicked at New Jersey.

“For New Jersey residents, I think it would be super good if New Jersey Transit stepped up their game and actually started delivering a real serious transit product for the working people of New Jersey,” said John Samuelsen, who, as international president of the Transport Workers Union, represents some 40,000 MTA employees.

MTA chair and CEO Janno Lieber said NJ Transit is among the many mass transit agencies only just beginning to talk about their budget problems.

“They are looking at a 30 percent budget deficit,” Lieber told his board Wednesday. “If that was applied to the MTA, that would have been $6 billion a year.”

Hours later, by happenstance, NJ Transit’s board members met in Newark. They voted to approve their budget unanimously and held fares flat.

Not a single board member spoke about the looming deficit.

What this means is uncertainty for countless commuters who wake up in New Jersey, head into Manhattan on NJ Transit buses and trains and then transfer to MTA’s buses and subways. Before the pandemic, that was over 200,000 people each weekday, according to MTA. Even now, it’s estimated to be more than 100,000 people a day.

Those thousands of commuters will now be spending the middle of their commute on a relatively reliable transit system, the MTA. But they will be starting and ending their day on a transit system with a future full of question marks.

The question marks are so big in New Jersey that one NJ Transit board member once floated the idea of asking MTA for money.

In April, Bob Gordon suggested NJ Transit should get part of the new “congestion pricing” tolls that New York’s transit systems want to impose on people driving into parts of Manhattan.

“I think a good portion of that should get allocated to New Jersey Transit,” Gordon told his fellow board members.

To be clear: That isn't going to happen.

By yet another happenstance, the New York board tasked with finalizing that tolling plan met for the first time on Wednesday. And, in Samuelsen's estimation, New Jersey does need money — but it isn’t going to get it from New York.

Samuelsen, who is also a member of that tolling board and the MTA, said there may be decades of disinvestment by the state in its transit system but “the issue of New Jersey is going to have to be addressed by New Jersey.”

To be sure, there are some differences to consider. MTA’s budget deficit — caused by ridership declines during the pandemic and then exhaustion of federal relief — would have started this year. NJ Transit’s won’t begin until next year. And the MTA having a balanced budget doesn’t mean all its subways are running on time or that its buses come often enough.

But as the MTA was facing a $600 million deficit that was expected to grow to $3 billion, Hochul and lawmakers reached a deal this spring to save it. They raised payroll taxes on large businesses served by the public transit system and agreed to direct new casino revenue to the MTA. In exchange, MTA, which hadn’t raised fares since 2019, would impose modest fare increases to support its $18 billion a year operating budget.

In New Jersey, Murphy has prided himself on keeping fares flat.

During former Gov. Chris Christie’s administration, there were repeated fare hikes that angered riders, so Murphy has avoided that trap. But he may have put himself in a tough spot, and he has acknowledged as much by suggesting fares may go up before he leaves office in 2026.

Lieber too faced pressure not to raise fares.

“When I went to the state Legislature for my hearing, one of the members said to me, ‘Why do you have to raise the fare — for the first 40 years of the subway system, they kept the fare a nickel,’” Lieber recalled. “I said to her, it's a great point — at the end of that the system went bankrupt and had to be taken over by the government.”

For over a decade MTA has tried to have regular but incremental fare increases, instead of holding out and then being forced to make steep hikes.

Lieber praised Hochul and the Legislature for tacking New York’s problems, while noting that others have not done the same.

“Thankfully, we had a governor who was willing to fight for transit riders and a Legislature that does understand the value of public transportation,” he said.

In New Jersey, some options are floating around, like new taxes or fees, but each has its complications and none of the ideas has a public champion yet. With all 120 lawmakers on the ballot this year, little will likely be done until late fall, at least, meaning there could be only a matter of months to come up with a political solution by the beginning of the budget year next July.

To add hurdles, Republican lawmakers want to investigate NJ Transit's decision to move out of its 12-story headquarters in Newark to leased office space in a building owned by donors to Murphy's campaigns.

Murphy’s office, which did not respond to a request for comment, would likely argue that it has helped shore up NJ Transit, improving service and infusing more cash by sending toll money from the New Jersey Turnpike to the transit system.

But increasingly, Murphy and NJ Transit are being asked by transit advocates to look at Albany as an example of how things should be done.

“Transit is an asset and an essential state utility and it’s time for New Jersey to catch up to the rest of the region in realizing that,” said Zoe Baldwin, the New Jersey director for the tri-state Regional Plan Association. "This neglect is hobbling one of our greatest engines for equity and economic growth at a time when we desperately need more of both.”

CORRECTION: An earlier version of this report incorrectly stated NJ Transit's budget shortfall next year.
CORRECTION: An earlier version of this report incorrectly stated NJ Transit's budget shortfall next year.