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More than 50 years ago, one of the main transit links between New York City and New Jersey was struggling to stay in business. It was saved by a political compromise between the governors of the two states.

Today, that rail network, known as the PATH, is as critical as ever to the region’s transportation network. It also loses more money than it ever did, piling up huge deficits that have made it one of the country’s most financially dependent public transit systems.

With more of New York’s workers settling across the Hudson River, the PATH is struggling to avoid being overwhelmed by rising demand. For the second consecutive year, it is on pace to carry a peak ridership of more than 82 million passengers on its compact network that connects Manhattan to cities in northern New Jersey. That’s up almost 10 million riders from five years ago.

Building has boomed around the PATH’s stations in New Jersey as developers have capitalized on access to a relatively inexpensive transit link. But the PATH’s popularity has not yielded any windfall for the system’s operator, the Port Authority of New York and New Jersey.

The agency has spent billions of dollars upgrading and expanding the PATH even as the system is due to lose more than $400 million next year. In fact, the PATH loses more than $230 million annually just on the operation of the trains, before the costs of any improvements.

Virtually all public transit systems are subsidized because fares do not cover costs, and governments want to encourage commuters to avoid their cars and take a train or bus.

But most systems are operated by state or local governments that can force taxpayers to cover some of the costs. The Port Authority does not have that power, so it makes up the difference by diverting money from its more lucrative operations — airports, bridges and tunnels.

“PATH is more extreme,” said Thomas K. Wright, president of the nonprofit Regional Plan Association. It operates essentially like an extension across the Hudson of New York’s subway, he said, but is subject to different federal regulations, like more frequent inspections, that add to its costs. “I don’t think there are any quick solutions to saving money on the PATH in a serious way.”

The Citizens Budget Commission said in 2014 that the PATH had become a “major drain” and was putting a “substantial burden” on the finances of the Port Authority, which also operates the metropolitan area’s three big airports and its seaports. The nonprofit commission recommended finding another source of funding or a different operator for the PATH, but the Port Authority has never really considered trying to offload the train since it is unlikely anyone would be willing to assume such a big burden.

So the agency continues to bear the rising costs of a modest system with four lines and just 13 stations.

Those have included $4 billion to replace the station beneath the World Trade Center that was destroyed in 2001. That amount was twice the original estimate and made the train station one of the most expensive ever built.

The Port Authority is also spending $252 million on a new station in Harrison, N.J., which is used by fewer than 9,000 passengers, or about the same number of riders who use a single subway station on the No. 4 line in the Bronx.

And the agency says it needs to spend $1.4 billion to repair damage to PATH tunnels under the Hudson that filled with saltwater when Hurricane Sandy struck in 2012.

Yet despite all these costly improvements, PATH riders have vented over continued disruptions and increasingly packed trains at rush hours.

The Port Authority added to the discontent when it announced recently that repairing the storm damage would require it to eliminate weekend service to and from the World Trade Center for the next two years.

Julie Burna said the PATH was one of the main lures when she and her husband moved from Queens to Jersey City three years ago. Weary of subway delays, they thought “the PATH might be more reliable,” she said.

Instead, she said, she found herself squeezed among taller passengers like a Tetris game piece. “I just kept getting elbowed in the face,” said Ms. Burna, a freelance organizer of entertainment events.

The crush during rush hours, coupled with delays blamed on signal problems, was so stressful that she gave up working full time. Now she tries to find work in Jersey City that she can get to on a bicycle.

But for all of its flaws and detractors, the PATH system has become an integral and comparatively reliable option for commuters in a region plagued by transit troubles. And soon, its managers say, an upgraded signal system will allow them to increase capacity by running trains closer together.

Michael Marino, who is retiring soon after overseeing the PATH for the Port Authority since 2015, said the improved technology would allow trains to run just three minutes apart, down from at least six now.

The Port Authority has also ordered more rail cars with the hope of extending some trains to 10 cars from eight, though most platforms cannot accommodate longer trains. “We’re not going to 10-car trains for a while,” Mr. Marino said.

Beyond the soaring transit hub at the new World Trade Center, known as the Oculus, the best glimpse of the future of the PATH system may be in Harrison, a small town wedged between Newark and Jersey City, whose main attraction at onetime may have been its PATH station, built in 1908.

On the New York-bound side, commuters troop through turnstiles and up a dark, narrow staircase — no escalator or elevator — to a shabby platform. But, as of this fall, those headed toward the western end of the system, at Pennsylvania Station in Newark, are treated to a glossy station that resembles a modern airport terminal. The entire station is scheduled to be completed in 2021.

Besides PATH passengers, the big beneficiaries of the Port Authority’s largess are around the station. Where once there were parking lots and decaying warehouses, Harrison is bursting with luxury rental buildings, restaurants, cafes and even a hotel.

The population of Harrison has grown by nearly 30 percent since 2010, the year that Red Bull Arena, a soccer stadium, opened in the town, census data show. The town’s mayor, James Fife, said the new PATH station was the diamond in the “ring of development” that had sprung up there in the last several years.

But even as the PATH has helped fuel a renaissance in the towns that it serves, the Port Authority has never figured out how to stabilize the system’s finances. The agency acquired the PATH as part of a 1962 deal between Gov. Nelson Rockefeller of New York and his New Jersey counterpart, Richard J. Hughes. In exchange, the Port Authority was cleared to build the original World Trade Center.

Mr. Marino said he wished that the Port Authority could extract contributions from businesses that are capitalizing on the PATH service, like the Metropolitan Transportation Authority does in New York. But that would require changes in state laws because the Port Authority has no taxing powers.

For now, the only way the agency can significantly raise PATH revenue is to increase fares. The fare went up $1 in four annual increments from 2011 to 2014, but no further increases are planned, Rick Cotton, the Port Authority’s executive director, said. The $2.75 single ride fare — the same as a subway ride — covers less than half the cost to operate the PATH.

Over the next 10 years, the Port Authority plans to invest $4.3 billion in the PATH system, Mr. Cotton said. That total includes the cost of repairing the Hurricane Sandy damage, completing the upgrade of the signal system, and making improvements to stations.

Stewart Mader, chairman of the PATH Riders Council, said the train was one of the prime reasons he moved to Hoboken, N.J., from the Upper West Side of Manhattan. He called the PATH fare a “really good bargain” that “allows people to live on the other side of the Hudson and work in Manhattan and have a reasonable cost to their commute.”

Mr. Mader pointed out that the privately owned commuter ferries that cross the Hudson charge $7 or more each way, a cost that may be prohibitive for some workers. But soon, they will offer PATH riders an even better bargain. Over the next two years, while the PATH is not running on weekends to the World Trade Center, the Port Authority will be paying the New York Waterway ferry company to carry PATH ticket holders across the river.

Follow Patrick McGeehan on Twitter at @NYTPatrick.

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