Gov. Murphy says fare holiday is a ‘thank you’ to loyal customers

A little over a month after enacting a 15% fare hike to help plug budget holes, New Jersey’s statewide bus and rail agency is getting ready to offer customers a temporary, late-summer fare holiday.

The New Jersey Transit fare holiday will run from Aug. 26 through Sept. 2, according to Gov. Phil Murphy.

Murphy said the temporary free rides will serve as a “thank you” to the agency’s loyal customers amid a grueling summer of service disruptions.

The free service will be offered to users of all modes of transportation during the fare holiday, and NJ Transit will automatically provide 25% discounts on September monthly passes to customers who had already purchased their monthly passes for August, Murphy said.

The fare holiday comes on the heels of a fare hike that went into effect July 1 as part of efforts to address significant budget woes at an agency that is still trying to recover from the COVID-19 pandemic.

The fare holiday will cost an estimated $19 million in lost revenue, and a search for “offsets” is currently underway, NJ Transit officials said Thursday.

Meanwhile, the fare hike is projected to raise $106.6 million in new revenue to help support a $3 billion operating budget for the 2025 fiscal year, according to agency budget documents.

Who’s not happy?

The decision to offer a fare holiday drew immediate reactions from leading business groups, who noted Murphy and fellow Democrats who control the Legislature just raised taxes on top-earning businesses earlier this year as part of a longer-term plan to prop up NJ Transit’s shaky finances.

“We understand the benevolent spirit in which Gov. Murphy announced the NJ Transit fare holiday,” said Tom Bracken, president and chief executive officer of the New Jersey Chamber of Commerce. (Bracken is on the board of trustees at NJ PBS.)

“However, coming less than two months after a debate concluded regarding the agency’s dire fiscal health, and the need for the business community to come to its rescue, this begs the question as to which is better — a fare holiday or keeping the money to address the financial woes?” Bracken said.

In recent weeks, state lawmakers from both parties have raised concerns about NJ Transit’s faltering service, with some calling for hearings and for an audit of the agency’s finances.

“Providing this fare holiday on the heels of a massive corporate tax increase to support the budget woes for NJ Transit is a frustrating message and wholly disregards the latest hit our business community just took on competitiveness,” said Michele Siekerka, the president and chief executive officer of the New Jersey Business & Industry Association.

The announcement from Murphy, a second-term Democrat who previously pledged to fix NJ Transit “if it kills me,” comes amid a tumultuous period for one of the nation’s largest mass-transit agencies.

NJ Transit’s summer of troubles

Even before the 15% fare hike went into effect, rail service began to falter across much of the Northeast Corridor, which is used by NJ Transit to link Trenton with New York City. The infrastructure itself is owned by Amtrak and has suffered from decades of disinvestment.

In July, a prolonged heat wave prompted NJ Transit to warn rail customers about the potential for delays and cancellations as the rising temperatures triggered its own equipment issues, which were impacting air-conditioning units and other electronic components, the agency said at the time.

The River Line light-rail service in South Jersey has also been a source of frequent complaints in recent weeks, and earlier this month NJ Transit officials announced the agency was temporarily changing the service’s weekday schedule and offering supplemental bus service in response.

And NJ Transit is also getting ready to launch a replacement bus service plan in Bergen, Passaic and Hudson counties to salvage routes recently abandoned by the private carrier Coach USA.

‘This gesture of appreciation is welcomed, but Amtrak and NJ Transit must still address the root causes of the delays and cancellations that riders continue to endure.’ — Sen Troy Singleton (D-Burlington)

In a statement issued Thursday, Murphy said he hoped the fare holiday would offer commuters “some relief” at a time when the level of service has been falling short of expectations.

“We also encourage New Jerseyans to take advantage of this opportunity, and we continue to be thankful to the many New Jerseyans who depend on public transit,” Murphy said.

In late June, Murphy and Democratic legislative leaders agreed to include in the state budget an increase in the direct state subsidy for NJ Transit operations. The agency is also receiving a boost in funding provided annually by the New Jersey Turnpike Authority during the 2025 fiscal year, which ends June 30.

Funding transfers from the state Clean Energy Fund and from the agency’s own capital resources are also being relied upon to help sustain NJ Transit’s annual operations, according to agency budget documents, along with revenue from the agency’s first fare hike in nearly a decade.

Long-term financial challenges

Looking ahead, NJ Transit is planning to use $766.8 million in dedicated revenue from a tax hike on businesses with more than $10 million in net annual profits to help balance the fiscal year 2026 operating budget, according to the agency documents. Murphy and Democratic legislative leaders agreed to that increase earlier this year despite widespread criticism from business groups.

And NJ Transit is also planning to enact 3% fare hikes annually starting next year as part of its long-term plan to manage financial pressures caused by inflation, a loss of ridership following the COVID-19 pandemic and the lapsing of temporary federal pandemic aid.

In recent weeks, state lawmakers from both parties have raised concerns about NJ Transit’s faltering service, with some calling for legislative hearings and an audit of the agency’s finances.

In response to Murphy’s fare holiday announcement, Sen. Troy Singleton (D-Burlington) said commuters are “absolutely deserving of getting a free ride after the subpar service they have experienced in recent months.”

“This gesture of appreciation is welcomed, but Amtrak and NJ Transit must still address the root causes of the delays and cancellations that riders continue to endure,” he said.

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