New Jersey Transit's board of directors formally approved fare increases Wednesday that average about 9 percent for bus and rail riders and will go into effect in October.

NJ Transit's board of directors listens to testimony against a fare increase before voting to approve it. (David Matthau, Townsquare Media NJ)

Agency officials insist the hike is necessary to close a $60 million budget shortfall, but commuter groups are very unhappy.

"We did this as thoughtfully as possible while trying to maintain safe and reliable service, and to the extent that we have an opportunity to add value to our customers in the upcoming year, we’re going to do everything we can to try and do that," said Ronnie Hakim, NJ Transit executive director.

According to Michael Phelan, the co-founder of the New Jersey Commuters Action Network, the increased cost will present a major financial hardship for hundreds of thousands of bus and rail riders, because they're still trying to catch up from the last major increase that went into effect five years ago.

"Plus the fact we've got such poor service especially in the evening on the trains, there are multiple levels of concern," he said. "The fare hike adds another layer of stress financially, the people who - many are already at risk at their work because they're late to work so often."

Phelan said this is a sad day for all New Jerseyans.

"The more you dig, the more layers of stress and anxiety connected to the fare hike, connected to the poor service that's in place now before there are even any service cuts," Phelan said.

He added that this kind of fare hike sends the wrong message and reminds everyone we're 20 years behind on planning and supporting New Jersey businesses and citizens.

"Mass transit is the life blood to hundreds of thousands of people's jobs," he said. "This is the big leagues, we are a major workforce that supports New York City and the busiest region in the country, and to not invest, not go in the opposite direction when it comes to funding is just really mind-boggling at a time when the infrastructure is crumbling, and the trains are decades old."

A woman rushes to catch the NJ Transit train from New York Penn Station to Trenton, NJ on May 13, 2015 in New York City. (Photo by Andrew Burton/Getty Images)

He also said millennials are looking for jobs and lifestyles that don't involve driving and they want to move to areas with solid transportation and walkable downtown areas. While many regions around the country have been preparing for this, here in New Jersey that hasn't happened.

"Nobody is happy about the fare hikes, people are extremely upset, the riders take it as a personal insult," Phelan said. "For the third time in a row the riders bear all of the weight of the budget gap that the agency has, the riders have had enough, they're fed up."

NJ Transit insists only 3,500 to 4,000 customers will stop riding buses and trains because of the fare hike, which is less than 1 percent of ridership.

One-way fares between Trenton and New York, the two endpoints of the Northeast Corridor Line, would rise by $1.25 to $16.75, an 8 percent increase. A monthly ticket would increase 9 percent, from $440 to $480.

A one-way ride from Lakewood to New York would go up $1.50 to $19, for example, and a monthly pass would increase by $37, to $448, a 9 percent hike.

The fare hikes are scheduled to take effect in the beginning of October. The last time fares were increased was in 2010.

The Associated Press contributed to this report.