"Grossly unable to handle current or future capacity" would be a more apt description. Both services are taking steps to combat this, but at this point it's too little, too late. Yes, the new cars both systems are introducing are very nice, very pretty, and may help offset the capacity issue for the next few months or so, but it's a kid-sized band-aid on a six-inch knife wound.
Raising fares doesn't help anyone - both services did that recently too, presumably to take advantage of the increase in daily passenger traffic (they know you need to take their train, so they'll stiff you as much as possible). NJT is the worst offender here - they've had two fare increases in the past four years, while PATH has only recently upped its rates after a nearly eight-year freeze.
Capacity isn't just a problem on the trains themselves - it's a problem in New York, where almost seven hundred thousand people pour through New York Penn Station from the four major services - NJT, Amtrak, LIRR, and the NYC Subway - and almost three hundred thousand are pouring in on PATH by itself - forget bus travel, because that's a whole other can of worms.
Think about it this way - when you ride any of the major lines in the area, can you find a seat or are you standing shoulder-to-shoulder with strangers? Unfortunately, the answer is too often the latter. Now, don't get me wrong - there's standing room set aside for a reason, but what I mean is that any train coming through Newark, Secaucus, Hoboken or New York at this point is crowded to the point where people are standing in the aisles and the standing room only areas. On PATH it's even worse - good luck getting onto the train at Harrison Station, a stone's throw from Newark Penn Station, or getting on the Journal Square-33rd Street line after it leaves Journal Square.
The major carriers in the area have their strengths and their weaknesses, but they are all operating independent of one another. I'm not proposing lumping everything together - the MTA's flagrant misuse of funds over the past quarter century is proof enough that they shouldn't have any place in NJ's transit systems. I'm proposing combining the resources of the Port Authority and NJ Transit under one roof. Right now, NJ Transit is a quasi-governmental body operating under the auspices of the Department of Transportation of the State of New Jersey, while the Port Authority of New York and New Jersey is a bi-state agency operating, in many ways, on the federal level, but answering to the governors of the states of New York and New Jersey (who are chairs of the PA's Board of Directors). With regard to mass transit, the Port Authority has a very minimal footprint (comparitively speaking - PATH stations operate above or below five NYC Subway stations, and the AirTrain system, operated by the PA, operates strictly between Jamaica Station and JFK Airport) in New York, while it has a far more extensive system in New Jersey (the majority of PATH's stations are standalone and in New Jersey, specifically in Newark, Harrison, Jersey City and Hoboken, and AirTrain operates between NJT's Newark Airport stop and the terminals of Newark Airport). New Jersey Transit's operations are almost exclusively based in New Jersey with the exception of its terminus at New York Penn Station for all but three of its lines (exceptions are Raritan Valley Line, Pascack Valley Line and Atlantic City Line) and its other terminus at Philadelphia's 30th Street Station for the Atlantic City Line.
For New Jersey, having the PA absorb NJT, or at least their rail operations, makes a lot of sense, and here's why:
One entity responsible for mass transit throughout the state and with the authority and clearance to take on projects that wouldn't normally make sense for either system on its own (a perfect example is the long-spoken-of PATH extension from Newark to Plainfield - or even just the airport). The systems could pool their resources with far less red tape and with the combined income from these systems could make parts of either PATH or NJT's systems free at certain times or remove fares entirely. Ways could be found to combine certain aspects of the systems (adapting Newark Light Rail vehicles for use on PATH's system, or vice-versa) or to establish a uniform train carriage that would work across all covered systems (cars that would work just as well on NJT, NJT LR, PATH systems). Frankly, I think this would be a good idea - what do you think?