Looks like health insurance premiums and fuel prices are hitting a lot of transit agencies hard:

Newark Star Ledger
Thursday, November 11, 2004

NJ Transit may roll out fare increase

Agency blames escalating costs, says 15% boost could hit by July

BY JOE MALINCONICO
Star-Ledger Staff

NJ Transit warned yesterday that it may impose a 15 percent fare
increase on its 375,000 bus, train and light rail passengers next year to
close an impending budget gap of up to $65 million.

Transportation officials blamed the potential fare hike on skyrocketing
expenses for things like fuel, security and employee health benefits, as
well as on the loss of financial maneuvers they previously used to balance
past budgets.

The agency this year expects to collect about $560 million in fares, which
covers about 43 percent of its $1.3 billion operating budget. State
taxpayers pick up most of the rest of the tab.

The proposed increase comes during a changing of the guard in Trenton
and ultimately would require the approval of Senate President Richard
Codey, who becomes acting governor next week.

"He's looking at this as a last-resort option," said Kelley Heck, Codey's
spokesperson.

Dissatisfied commuters -- who were hit with an average 10 percent
increase in 2002 -- say another fare increase would be an insult.

"With the service they currently provide, I think I am paying too much
now," said Matt Wagner of North Plainfield, who commutes on the Raritan
Valley Line. "An additional 15 percent might force me back to driving."

"Hiking the fare would just be throwing good money after bad unless NJ
Transit guarantees up front that the extra money would go to improve
service and run the trains on time," said Greg Storey of Roselle Park,
another Raritan Valley Line rider. "I've been riding NJ Transit for over 18
years and its service and the customer-be-damned attitude of its
management are as bad as I've ever seen."

NJ Transit Executive Director George Warrington and state Transportation
Commissioner Jack Lettiere promised yesterday to do everything possible
to try to minimize the size of the increase or to avoid it altogether. They
said they were not considering cutting services -- even though operating
at large deficits -- to close the budget gap.

"We're still early in the process," Warrington said.

"We have our work cut out for us," Lettiere said.

The exact size of the increase may vary for NJ Transit's buses, trains and
light rail systems as well as for different lines within those modes of
transportation.

By January, officials said they would put together a plan with specific
details on the increase. In February, they expect to hold public hearings
on the hike, which most likely would take effect in July, officials said. A 15
percent increase would produce about $55 million in extra revenue,
officials said.

"Fifteen percent sounds a little high to me. I would hope that we can do
better than that," said John McGoldrick, an NJ Transit board member who
commutes to Manhattan on the Northeast Corridor Line.

Warrington said his agency faces a $15 million increase in fuel costs next
year, an extra $13 million for security measures and rising health
insurance costs that already have jumped by $37 million annually since
2001.

In the past, NJ Transit has been able to rely on two financing maneuvers
to close budget gaps. First, it has used about $350 million per year that
was borrowed for big projects to cover operating expenses. But officials
said they do not want to take a bigger cut out of the capital budget money.

Officials also have used about $48 million over the past four years from
so-called leveraged lease agreements -- which are basically deals that
allow private investors to pay a fee to NJ Transit to buy the tax benefits of
the depreciation on transit equipment. But the federal government last
year placed a moratorium on leveraged lease deals nationwide because
of the loss of tax to the U.S. Treasury.

As part of its 2002 hike, NJ Transit had the option of imposing 3 percent
fare increases for inflation in each of the past three years, but the agency
decided not to do so. Officials acknowledged that if they followed through
with that plan, they would not need a steep hike now.

"At the time, Governor McGreevey was very concerned about a fare
increase in uncertain economic times," Lettiere said.

Jeffrey Warsh, Warrington's predecessor as NJ Transit's executive
director, said yesterday that the McGreevey administration reduced its
subsidy for mass transit in 2002, effectively shifting the proceeds from that
year's fare hike into the state's general treasury.

"The public needs to be assured that the proceeds for any future fare
increase will be applied exclusively to the NJ Transit system," Warsh said.

Indeed, riders yesterday said they would be more tolerant of a fare hike if
they believed their commutes would improve.

Anthony Baldo, a Middletown resident who rides the North Jersey Coast
Line, said the agency needs to fix equipment that frequently breaks down
and should come up with better contingency plans for whenever there are
service disruptions.

Tom Schopper of Bloomingdale said NJ Transit ought to improve security
at its bus park-and-ride on Route 23 in Wayne, where he said cars are
often broken into.

Anthony Buccino of Nutley said the agency should provide better
information about bus connections at its new -- and uncomfortable --
Newark city subway station at Branch Brook Park.

"NJ Transit is increasing fares while service delays have increased,
customer service has gotten worse, maintenance of rail cars has been
minimal," said Michael Weinstock, a rail rider from Scotch Plains. "Many
cars have electrical tape holding things together, cars haven't been
washed on the outside in ages, conductor interaction with passengers is
more confrontational given the encounters I have witnessed over the past
year, and communication with commuters when there are delays is
minimal and usually sporadic."

"Passengers are being asked to pay more for less," Weinstock said.

Joe Malinconico covers transportation. He can be reached at
jmalinconico@starledger.com or at (973) 392-4230.