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New Jersey Governor’s Middle-Class Legacy at Stake with Impending Fare Hikes and Tax Increases

Credits: Politico

Two weeks ago, New Jersey Governor Phil Murphy celebrated the enactment of 20 tax cuts during his tenure, focusing on benefiting middle-class families and seniors.

However, faced with a nearly $1 billion budget gap, the state is now contemplating tax increases, fee adjustments, and transit fare hikes, drawing criticism from Republicans and fellow Democrats alike.

The latest development is the announcement of a 15 percent fare increase for hundreds of thousands of New Jersey Transit riders, marking the first such increase since Murphy assumed office in 2018.

New Jersey Governor’s Middle-Class Legacy at Stake with Impending Fare Hikes and Tax Increases

N.J., Gov. Murphy (Credits: NJ.com)

The fare hike, intended to close the budget gap at the third-largest transit agency in the U.S., has triggered swift backlash from both Democrats and Republicans, raising concerns about the impact on vulnerable residents and daily commuters to New York City.

Some Democrats, including the president of the state Senate, a key environmental committee chair, and a leading candidate to succeed Murphy, have expressed dissatisfaction with the fare increase.

Critics argue that the policy could discourage people from using mass transit at a time when environmental goals call for increased transit ridership.

Governor Murphy, known for raising taxes on the wealthy while cutting them for others, is now considering additional measures such as raising the gas tax and increasing the sales tax to support NJ Transit. While decisions on these proposals are pending, they signify a shift in the administration’s approach to taxation.

The potential increase in the sales tax, initially reduced during the administration of Republican Governor Chris Christie in exchange for a higher gas tax, highlights the evolving fiscal landscape.

Murphy’s administration contends that the fare hike is fair, emphasizing that fares have remained unchanged despite increased service.

Despite NJ Transit projecting a 4.2 percent increase in ridership in the next budget year, critics argue that the fare increases are insufficient to address the budget deficit, projected to be around $800 million by summer 2025.

The administration’s decision to focus on public transit cost increases while freezing tolls for drivers and resisting tolls sought by New York has raised questions about the governor’s commitment to climate change mitigation and transit support.

Jersey City Mayor Steven Fulop, a potential gubernatorial candidate in 2025, has criticized Murphy for not doing enough to protect transit riders, especially those commuting from Jersey City to New York.

The rate shock of a double-digit fare increase is seen as a significant political challenge for Murphy, potentially impacting his legacy.

While the Business and Industry Association offers measured support for Murphy’s decision to let a business tax surcharge expire, lawmakers remain divided on funding options for NJ Transit.

Senate President Nick Scutari has suggested using the corporate business tax, a proposal rejected by Murphy, emphasizing the need for a comprehensive solution that doesn’t burden everyday commuters.

It remains uncertain whether lawmakers will push for tax increases in the current year or postpone decisions until 2025, as suggested by the governor.

Republicans highlight the fare increases as an added burden on the cost of living in New Jersey, questioning Murphy’s commitment to affordable public transit.

The administration may argue that certain funding ideas require constitutional amendments for permanency, making the situation complex.

As discussions unfold, transit funding challenges continue to be a focal point in New Jersey’s fiscal landscape, with potential implications for Murphy’s political standing.

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