New Jersey Transit's (NJ Transit) "projected operating deficit in FY11 is approaching $300 million,” Executive Director James Weinstein announced Wednesday.

Weinstein said that the transit agency is aggressively confronting current and future budget shortfalls that have arisen due to the severe national recession and the state’s $2.2 billion current-year and $11 billion FY11 budget gaps.

He called for riders and the public to provide input to NJ Transit as the agency develops the proper mix of solutions to balance the budgets while maintaining safe, reliable bus and train service.

Last week Gov. Chris Christie announced an 11-percent subsidy reduction, about $33 million, to NJ Transit’s FY10 state operating subsidy as part of a number of steps the Governor is taking to close the state’s current budget shortfall.

“This reduction is painful but we understand the challenge the state is facing,” Weinstein said. “We know the Governor appreciates the importance of the transit system to New Jersey’s mobility, but we recognize that difficult measures are required to keep the state budget balanced.”

The budget outlook is even grimmer for FY11, which starts July 1 for both the state and NJ Transit. Weinstein said the state faces an $11 billion deficit next year and is not likely to be able to continue to provide its historic level of operating assistance to the transit agency. NJ Transit also is unable to depend on another round of federal stimulus and other one-time federal transportation funding, which was utilized to help bolster the operating budget by $150 million.

In addition, the agency is facing inflationary cost increases for things such as fuel and equipment parts, even as ridership declined systemwide by about four percent year to date, reducing fare revenue.

“In the transition report that I helped prepare as head of the transportation committee, we indicated that NJ Transit would face a budget deficit next year (FY11) of about $200 million,” said Weinstein. “After reviewing more recent data, the projected operating deficit in FY11 is approaching $300 million.”

Everything is under review, including reducing payroll and fringe expenses, locking in fuel costs and reducing parts inventories, Weinstein said at a board meeting.

Weinstein said NJ Transit will be as inclusive as possible as it studies options to meet the financial shortfalls and will seek input from customers and stakeholders on any fare and service proposals. The agency will be reaching out to customers and the public over the coming days to solicit comments and suggestions on the fare and service change proposals.

To read The Star Ledger story on proposed fare hikes for the agency, click here.