Democrats said the state would be required to repay $300 million in federal funds already spent on the project. And they said the cancellation would leave more motorists stuck in traffic, and rail passengers on train lines already at capacity.
U.S. Sen. Frank Lautenberg (D., N.J.) predicted that killing the tunnel project "will go down as one of the biggest public-policy blunders in New Jersey's history."
Now, $3 billion in federal aid committed to the tunnel will go back to Washington for use in other states' mass-transit projects, Lautenberg said.
Instead of "getting a major investment from the federal government, New Jersey taxpayers now owe the federal government $300 million plus interest and penalties as a result of the governor giving up on the tunnel," said U.S. Sen. Robert Menendez (D., N.J.). "That's on top of the $300 million our state has already spent. New Jersey taxpayers are now the owners of a brand-new, $600 million Hole to Nowhere."
State Assemblyman Louis D. Greenwald (D., Camden) said Christie's decision "has destroyed job creation in New Jersey in so many ways that it's difficult to measure. . . . What type of leader folds such an important project without any real effort to solve the problems facing it?"
Christie said he decided to cancel the "Access to the Region's Core" tunnel based on financial estimates from a committee of officials from NJ Transit and the Port Authority of New York and New Jersey.
The current $8.7 billion price tag was to be met with $3 billion from the Federal Transit Administration, $3 billion from the Port Authority, and $2.7 billion from New Jersey and from other federal sources.
Money for projected cost overruns would have had to come from New Jersey, Christie said.
"I take no joy in taking this decision," Christie said at a news conference Thursday afternoon. "New Jersey has gone for too many decades ordering things it can't pay for. . . . I simply cannot put the taxpayers of the state of New Jersey on what would be a never-ending hook."
Republican legislators quickly came out in support of Christie's announcement.
"Every dollar of the expected $5 billion of cost overruns would have been paid for by New Jersey taxpayers," said Sen. Joe Pennacchio (R., Morris). "Gov. Christie's decision to cancel the ARC tunnel will directly save New Jerseyans billions of dollars."
"Our governor understands we cannot spend money we do not have," said Sen. Mike Doherty (R., Warren), "and New Jersey must start living within its means."
Christie did not have immediate alternate plans for the more than $2 billion that New Jersey had committed to the project, he said. But his critics said they expected Christie to shift the money to shore up the state's depleted Transportation Trust Fund.
The trust fund is the primary source for highway and transit construction in the state and is nearly out of money for new projects. Christie had promised to come up with a plan soon for replenishing the fund without raising gasoline taxes.
"Gov. Christie is using the [tunnel] project's budget as an excuse to steal the money for the Transportation Trust Fund," said Jeff Tittel, director of the New Jersey Sierra Club.
The environmental group had been critical of the tunnel plans because the tunnel did not connect to any existing train stations in New York City, but Tittel said the project should have proceeded while improvements were made.
The chairman of the Assembly transportation committee, John Wisniewski (D., Middlesex), said he would hold hearings on the tunnel decision next week and try to find a way to resurrect the project.
"A true leader would make the tough decisions needed to get things done, not throw in the towel and skulk away helplessly when the issues get complicated," Wisniewski said.
But Assemblyman Alex DeCroce (R., Morris) said, "The governor has shown true leadership by demonstrating he is willing to make the difficult but necessary decisions in order to protect taxpayers."
Plans for a new rail tunnel under the Hudson have been in the works for decades. Currently, all NJ Transit and Amtrak trains between New Jersey and Manhattan share a century-old, two-track tunnel, which is at capacity.
The new tunnel would have added two more tracks, more than doubling the number of NJ Transit trains that could travel to and from New York during peak commuting times.
The project's price tag grew from $5 billion in 2005 to $8.7 billion by 2008. And in recent months, Federal Transit Administrator Peter Rogoff has estimated the cost between $9 billion and $10 billion.
Christie's advisers delivered estimates Thursday between $11 billion and $14 billion.
Legislative leaders said Christie had inflated the projected costs to justify killing the project.
"He pulled a number out of the air," Wisniewski said. "It has always been on his agenda to steal $2 billion from this project for the Transportation Trust Fund."
Wisniewski said that all the work done so far on the tunnel project had been at or below cost projections and that with construction costs currently depressed, "there is no better time to do this than now."
New Jersey Future, a transit-oriented planning organization, said the death of the tunnel project would produce more urban sprawl in the state.
"Without additional transit capacity, future growth and development will necessarily be automobile-oriented - pushing sprawl farther south and west, worsening traffic congestion, increasing the cost of building and maintaining our roadways, and consuming large swaths of New Jersey's remaining open spaces," New Jersey Future executive director Peter Kasabach said in a statement.
Christie said he would ask his transit experts to look for other ways to ease travel to and from New York.
"I can't imagine that the ARC tunnel is the only option to relieve congestion," Christie said.
And there was a suggestion Thursday that Obama administration officials might try to rescue the tunnel project.
U.S. Transportation Secretary Ray LaHood will meet Friday with Christie to "discuss a path forward on the ARC tunnel project," according to LaHood spokeswoman Olivia Alair, the Associated Press reported.
Contact staff writer Paul Nussbaum at 215-854-4587
This article contains information from the Associated Press.