U.S. report: Christie overstated tunnel costs

Posted: April 11, 2012

When Gov. Christie canceled a rail tunnel linking New Jersey and New York City, indignantly citing the burden it could place on New Jersey taxpayers, he overstated the estimated costs associated with the mega-project, according to a report released Tuesday by the federal Government Accountability Office.

Supporters of the tunnel's construction, including Democratic politicians and transportation advocates, responded to the findings by reiterating their belief that Christie killed the tunnel to bolster his political reputation at the expense of commuters' needs.

Christie defended his 2010 decision to cancel the Access to the Region's Core (ARC) project, which would have added two rail tracks under the Hudson River, doubling the maximum number of rush-hour trains and reducing delays for Amtrak and NJ Transit riders.

"The ARC project was a very, very bad deal for New Jersey," Christie press secretary Michael Drewniak said in a statement. "The ARC project is still dead, and it's not coming back."

Drewniak noted that the study by the independent congressional investigators did not include costs of a key rail bridge, which would have added an estimated $775 million to the project's costs.

"When they want to build a tunnel to the basement of Macy's and stick the New Jersey taxpayer with a bill of three to five billion over, no matter how much the administration yells and screams, you have to say no," Christie said in a speech in New York on Tuesday.

Following Christie's 2010 decision, the $2 billion that the state had designated for the 8.8-mile tunnel was shifted to New Jersey's depleted Transportation Trust Fund, the primary source of money for highway and transit projects. The governor had promised to replenish the fund, which gets most of its money from fuel taxes, without raising the state gas tax.

Christie killed the tunnel project in October 2010, after construction had started. He said then that the cost was likely to top $11 billion and could exceed $14 billion, and that New Jersey would pay for 70 percent of the bill.

All cost overruns would have been borne by New Jersey, he said, and "I simply cannot put the taxpayers of the state of New Jersey on what would be a never-ending hook."

Fluctuations

The GAO study, which was requested by a tunnel supporter, Sen. Frank Lautenberg (D., N.J.), noted that estimates of the project's cost had fluctuated. The last estimate by the Federal Transit Administration, calculated in October 2010, was $9.8 billion to $12.4 billion.

Based on an April 2010 cost estimate of $8.7 billion, the GAO said the state would have been responsible for 14.4 percent, or $1.3 billion. The federal government would have paid 51 percent ($4.4 billion) and the Port Authority of New York and New Jersey would have paid 34.5 percent ($3 billion).

No decision had been made about paying for cost overruns, according to the GAO.

"Because the project was terminated before a full funding grant agreement was entered into between [the Federal Transportation Association] and [New Jersey Transit], there was no final agreement by all the parties on the issue of responsibility for ARC cost growth," the report said.

When the project was canceled, the federal Department of Transportation requested New Jersey to pay back $271 million in federal funds already spent on the project. Through a compromise, New Jersey eventually agreed to pay back $95 million.

The report cited studies that estimated that New Jersey communities served by the ARC project would have had an average increase in home value of $19,000, or 4.2 percent, in part because of improved access to high-paying jobs in Manhattan.

The GAO cited studies that estimated the project would have provided 59,900 jobs on site during construction and total employment of about 98,300 in the region. Ten years after completion, the project would have added 44,000 new jobs and almost $4 billion in personal income, according to the report. It would have reduced commutes by as much as 15 minutes.

Supporters of the tunnel project said Tuesday that the GAO's findings showed Christie had misled state residents when he killed the tunnel.

"This report from an independent, unbiased, nonpartisan entity confirms that the transportation needs of the region were sacrificed solely because of Gov. Christie's political motivations," said Kate Slevin, executive director of the Tri-State Transportation Campaign, a pro-transit organization.

"The governor needlessly canceled a project that would have been an economically and environmentally prudent investment for New Jersey. . . . Gov. Christie must explain to motorists stuck in traffic and delayed transit riders how he plans to improve their commutes."

State Assemblyman John S. Wisniewski (D., Middlesex), chairman of the Assembly's transportation committee, said the GAO report "essentially validates the criticism" that he and others leveled at Christie.

It "documents that the governor used exaggerated claims and distorted information to reach a preordained decision," he said.

"We all knew what he was doing it for: He saw an opportunity to grab that money and put it in the Transportation Trust Fund," Wisniewski said.

Christie was "just building a political resumé" as a tough-talking fiscal conservative, Wisniewski said. The project - the nation's largest mass-transit project at the time it was canceled - was a generation in the making, he said, and now, commuters "will probably have to wait another generation."

Lautenberg said the tunnel was "the most important transportation project of our time."

"ARC was critical to the future of New Jersey's economy and it took years to plan. But Gov. Christie wiped it out with a campaign of public deception," Lautenberg said.

Republican legislators backed Christie's decision in 2010 and rallied to his support Tuesday.

'Focus'

"We need to focus on a trans-Hudson rail transit solution that makes sense, not an overly expensive tunnel that didn't even take riders to Penn Station," State Senate GOP leader Tom Kean Jr. (R., Union) said in a statement. Kean said he "continues to support moving forward with the Gateway Tunnel in partnership with Amtrak, which is a much better option that would actually bring riders where they want to go."

That Amtrak proposal, unveiled last year, has a price tag of $13.5 billion, and how it would be funded remains uncertain. In November, Congress approved $15 million for initial studies.

The ARC tunnel "was too expensive a burden for New Jersey taxpayers to bear," said Assembly Republican leader Jon Bramnick (R., Union). "As it is, New Jerseyans send far more tax dollars to Washington than we receive back from our nation's capital. This report does not reflect all the costs New Jersey would have been responsible for."


Contact Paul Nussbaum

at 215-854-4587 or pnussbaum@phillynews.com.

|
|
|
|
|