and in our spotlight on business report the trains are back rolling but New Jersey Transit is still on rocky financial footing the agency says it's been dealing with rising costs and not enough revenue to cover them and that was before the strike hit which tacked on an extra $4 million a day to cover those supplemental buses it's unclear how this new contract deal could affect that our budget and finance writer John Wright joins me for a look at New Jersey Transit's finances john it's good to see you um the details of this deal notwithstanding I I want to take uh the curtain back here and peek behind at the finances of this massive agency why is it that despite the fair hikes um despite some of the more dedicated sources of funding in recent years as you report they're still really not on the best financial footing yeah and it's it's great to be with you also so we have to remember NJ Transit this is an agency that has a more than $3 billion annual operating budget and it seems as if every year whether there's a new contract being enacted or not it's always a question of whether NJ Transit is going to have enough funding where it's going to come from keep in mind that the fair box for NJ Transit so the amount of money that's contributed by people who actually ride the trains and buses that amount really only uh amounts to less than a billion dollars now now it's it's going up but it still hasn't recovered from before the CO 19 pandemic so we have a more than $3 billion operating budget the current projections for the fiscal year that begins July 1 you don't quite have a billion dollars coming from fairs so that means a lot of money has to be made up from other sources what are those other sources John yeah so a big one in the last few years has been funding from the federal government new Jerseys a portion of the share of fund of federal funding for pandemic relief has gone to NJ Transit the current fiscal year budget that's about 750 million so that's a big source of funding another big source of funding is is money that is transferred from the New Jersey Turnpike Authority so if you think about it people who pay the highway tolls the turnpike authority oversees both the New Jersey Turnpike and the Garden State Parkway so this number can fluctuate but it's around 450 to 470 million depending on what fiscal year we're talking about so that's another big chunk of money that NJ Transit gets from outside of NJ Transit there's money that typically comes from the state budget and it's important that we look ahead now to what's coming in fiscal year 2026 there's new revenue coming to NJ Transit from a tax that Governor Murphy and lawmakers established last year right that's going to be providing NJ Transit hundreds of millions of dollars in revenue in the fiscal year that be begins July 1 and this is a tax that's levied effectively as a search charge on New Jerseys highest earning corporations so they pay their corporate taxes and then this small group of the top earning companies they pay what's effectively another sir charge on their profits as a as an additional tax charge and that money by law is going to NJ Transit starting July 1 but that really only offsets what NJ Transit has been using from the federal government it's not providing like a big windfall for NJ Trans replacing you could say yeah if it's effectively replacing that's the right word to use if three billion Sorry John so if if you're saying it's about $3 billion for their operating budgets and if I add all of those sources up we're looking at just kind of barely scraping by really paper thin margins um why is it that there's such a wide gap a gap at all between the operating expenses and and the revenue what has been going up that they can't make up for with you know rising uh fair hikes and and uh new fees taxes yeah that's a really good question and big picture is if it was profitable to run big bus and train agencies Pennsylvania Railroad would still be in business this is something that governments absorbed as as a service it's it's really in most instances not a profitable endeavor although it's great overall for the state economy which by the way they also took on private bus carriers that had closed down after the pandemic but but go on yeah make your point to answer your specific question that's one cost pressure that we've seen in recent years nj Transits had to pick up the slack for private bus carriers that are no longer providing some services that people in New Jersey rely on to get to work they've also faced really high uh employee health insurance uh costs dramatically increasing as they are for many uh government entities and just inflation in general you know NJ Transit up until last summer was an agency that hadn't hiked fairs in about a decade and if you just think about the amount of inflation that we've seen and especially after the pandemic that's that's putting a lot of cost pressure now NJ Transit had budgeted for salary and benefit hikes in the fiscal year uh 2026 proposed budget so the year that starts July 1 we just don't know yet whether what they've agreed to at the negotiating table will work within what they're budgeting or whether it's sort of blown up that portion of their budget and that's the information we're still waiting to hear and that all comes back to fairs because we were already expecting a 3% fair hike to go into effect come July 1 and now the big question is whether the new contract that's been agreed to which is still subject to ratification by union members assuming it is ratified if this has any impact at all on rider fairs all right John Wrighter always good to talk to you um really good understanding um of the budget there you can see John's report on this um and others on the budget and New Jersey Transit's finances on our website NJSpotlightnews.org john thanks so much you're welcome support for the business report is provided by Riverview Jazz presenting the 12th annual Jersey City Jazz Festival May 27th to the 31st event details including performance schedules and location are online at jerseycityjazzfestestival.com [Music]