NJ Refuses to Repay $271 Million to Feds for Axed Arc Tunnel

Wednesday, January 26, 2011


New Jersey Governor Chris Christie told the Federal Transit Administration Tuesday night that he would refuse the agency's demand to have the state pay $271 million for early work done on the cancelled trans-Hudson ARC Tunnel. 

Christie pulled the plug on ARC in October, citing the potential for $5 billion in cost overruns that the state would have to pay. The move won him acclaim from fiscal conservatives and higher approval ratings from New Jersey voters.

But Tuesday's submission to the FTA, filed by Washington, D.C., law firm Patton Boggs, argues no repayment is required because the project was cancelled for reasons beyond the governor's control — or more precisely, of New Jersey Transit's, which was overseeing the project.

It was the project's estimated over-runs in a time of "severe financial stress" for New Jersey that made shutting down the project unavoidable, the filing argues.

The filing further claims the FTA is only authorized to ask for money classified as New Starts funds and that $225.5 million of the $271 million doesn't fit that description.

"The FTA overstates the funds that are even at issue and makes a demand for repayment that is far broader than authorized by statute," read a statement accompanying the filing.

Christie is also claiming that preliminary engineering for the ARC tunnel is proving useful to the study of other projects, such as the proposed extension of the No. 7 subway line from Manhattan to New Jersey and upgrades to Amtrak service in the Northeast Corridor.

The filing finally asserts that New Jersey can't afford to pay the bill.

"Repaying any amount would be deeply counterproductive and harmful to the citizens and taxpayers of NJ," it states. "The work produced with these funds has enduring value to future projects. Moreover, compelling NJT to repay these funds will force NJT to cancel projects it can afford to undertake to reduce congestion, enhance the condition of critical infrastructure and create needed jobs."

Fifty-five densely footnoted pages later, the document concludes: "[F]or the foregoing reasons, NJ Transit respectfully requests that FTA's repayment demand be denied."

U.S. Department of Transportation spokeswoman Olivia Alair said, “The FTA is currently reviewing New Jersey Transit’s response and will make a decision that is in accordance with the law.”


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Comments [4]


Sounds to me like New Jersey's governor is attempting to rip off over a quarter of a billion dollars of taxpayer dollars from taxpayers all over the country - i.e., federal funds.

Jan. 31 2011 09:05 PM

I await the lawsuit from the federal government requiring Christie to pay back the money he owes the federal government. Christie will lose.

Jan. 30 2011 03:51 PM
PaulCJr from Manhattan

Christie is a joke. He cancels the ARC tunnel due to cost over runs, but allows highway projects in central jersey that are also over budget to be built. Also, the fuss about the tunnel being under Macy's is cop out. Come one three blocks away!! geez! You'd still be in the same service area as Penn Station. Plus the economic benefit of more trains being able to move between NJ and NYC would have been huge. Think about it. The ability to get between NJ and NYC would have lead to more people going back and forth, saving people time and allowing people to spend more money on both sides of the Hudson. I say no way to the 7 train extension unless NJ residents pay more than the $2.25 subway fare. Maybe something like 6-8 dollars. All Christie did was limit economic growth and ease of people commutes. Way to go!!

Jan. 29 2011 08:35 PM

Why would you have chosen the phrase, "Rendering of ARC tunnel lines in New York Penn Station", since the tunnel was ending below Macy's Basement and not NY Penn Station. Penn Station is 150 feet up to the street surface & 3 city blocks away.

Jan. 26 2011 04:43 PM

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