NJ Transit’s board of directors approved a $3.15 billion operating budget July 17, the agency’s largest ever, and a 5% increase from the current spending plan. The budget includes for the first time an automatic annual 3% fare hike taking effect this year and the first revenues from Gov. Phil Murphy’s Corporate Transit Fee.
NJ Transit, the nation’s second-largest public transportation system, said fiscal year 2026 capital funding appropriation totals $1.684 billion and represents an expected funding source that will provide, along with other past and future annual appropriations, the funds needed to advance critical capital projects.
Officials at NJ Transit said the budget continues investments in infrastructure and equipment to maintain the system in a state of good repair and enhance the overall customer experience.
“NJ Transit has the funding it needs to maintain its critical transportation services,” said DOT Commissioner and NJ Transit Board Chair Fran O’Connor. “These services drive the economy and promote sustainable transportation throughout the region.”
“Together, the operating and capital budgets allow us to deliver safe, reliable service today while investing in the infrastructure that will shape a better customer experience tomorrow,” said NJ Transit President & CEO Kris Kolluri. “Every element of this funding supports our mission to make public transit more reliable, accessible, and responsive to the needs of our riders.”
Thirty-one percent, or $980 million, of the revenue in the operating budget comes from customer fares. The agency is counting on customer fare revenue even as more and more commuters are eschewing NJ Transit trains and buses and working remotely. Fare revenue has struggled to reach pre-pandemic levels.
The remaining amount comes from dedicated funding from the New Jersey Turnpike Authority, which is $470 million in fiscal year 2026, $789 million from the corporate transit fee and a combination of commercial revenue and state and federal resources.
About 60% of the operating budget is dedicated to costs associated with labor that supports a workforce of approximately 12,000 employees. Expenses including materials, fuel and power, utilities, and outside services represent 22% of the total operating expenses. Contracted transportation services, such as Access Link, private carrier buses and Hudson-Bergen Light Rail and River LINE operation and maintenance represent 10.6% of total operating expenses.
NJ Transit said fiscal year 2026 Capital Funding Appropriation’s total of $1.684 billion represents an expected funding source that will provide, along with other past and future annual appropriations, the funds needed to advance capital projects.
The Capital Funding Appropriation is derived from: $768 million from the Federal Transit Administration, $767 million from the New Jersey Transportation Trust Fund, $75 million in flexed funds from the Federal Highway Administration provided through the New Jersey Department of Transportation, and $74 million of casino revenue, local match, and Turnpike Authority funds.
