Every day, hundreds of thousands of New Jersey residents rely on NJ Transit to get to work, school, medical appointments, family visits, shop, and dine. But this essential service is under threat as the agency’s operating budget faces a nearly $1 billion budget deficit for FY 2026 — a shortfall that constitutes nearly one-third of its budget. In response, lawmakers stepped up, and Governor Murphy established the Corporate Transit Fee (CTF), marking the first dedicated funding source in NJ Transit in history. To preserve this progress, the FY 2026 budget must ensure that revenue generated through the CTF is used exclusively to fund NJ Transit — its original intent.
Years of chronic underfunding have eroded NJ Transit’s reliability and affordability, culminating in record delays and a 15 percent fare increase in 2024, exacerbating rider dissatisfaction. Worst still, transit riders are more likely to be low-income and not own cars, leaving them particularly vulnerable to service disruptions and fare increases.
As lawmakers deliberate on the FY 2026 state budget, they will inevitably seek additional revenue sources. It will be tempting to raid the CTF for purposes unrelated to transit — a pattern all too familiar in New Jersey. Similar diversions include lawmakers consistently using the Clean Energy Fund and the agency’s own capital fund to plug budget gaps in NJ Transit operations. Yet, the CTF was created precisely to address NJ Transit’s $1 billion funding deficit. Allowing the practice of diversions to continue would undermine NJ Transit’s ability to serve the millions of riders who depend on it.
Historically, lawmakers have filled NJ Transit budget gaps through fare hikes and service cuts, which risks destabilizing the transit agency with a “transit death spiral” — a vicious cycle where reduced ridership leads to less revenue, prompting further cuts and fare increases. Public transit is essential for our state’s economic growth, traffic congestion relief, and meeting our climate goals. Undermining NJ Transit threatens progress on these critical priorities.
This risk can be averted; the CTF offers a solution. Its revenue is more than enough to cover the agency’s shortfall and could reverse the additional 3 percent annual fare hike scheduled for July 2025.
Importantly, the CTF only applies to corporations with net profits exceeding $10 million, representing less than 1 percent of all corporate taxpayers in New Jersey. Moreover, because the tax applies to profits made in New Jersey and not just companies located in the state, more than 4 out of 5 corporations that pay the fee are out-of-state and multinational companies.
The Corporate Transit Fee was created to fund NJ Transit operations and must be used exclusively for that purpose. Dedicated CTF revenue will ensure that NJ Transit can continue to serve as a lifeline for residents and support economic growth. By safeguarding this funding source, lawmakers can secure a more equitable and prosperous future for all New Jerseyans.
