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NJ Governor Mum About Feds' Offer to Cut $271 Million ARC Bill Nearly in Half

Wednesday, December 15, 2010 - 08:35 PM

(New York -- Jim O'Grady, WNYC) New Jersey could be off the hook for almost half the $271 million  the federal government says it owes for scrapping a rail tunnel under the Hudson after work had been started.

The U.S. Department of Transportation says it will give the state $128 million back for projects that improve air quality by cutting traffic congestion. But only if New Jersey pays the whole bill by December 24.

Transportation Secretary Ray LaHood released a letter containing the offer. A spokesman for Governor Christie said he had no comment on it because the department hasn't contacted him.

Governor Christie halted the $8.7 billion ARC tunnel project in October because of potential cost overruns. The decision has been controversial. New Jersey Senator Frank Lautenberg, for one, repeatedly decries it as “disastrous.”

Lautenberg took credit on Wednesday, along with fellow New Jersey Senator Robert Menendez, for brokering the rebate offer from Transportation Secretary Ray LaHood. A press release from Lautenberg claimed that, “The Senator has been working quietly with DOT on reducing New Jersey’s burden since the project was killed.”

Now the Christie administration must decide if half a loaf is enough to end its scrap with the feds. Earlier this month, the governor directed New Jersey Transit—the state agency overseeing the project—to hire well-connected DC law firm Patton Boggs at $485 an hour to fight the tab from LaHood, which is for preliminary work on the ARC tunnel.

James Weinstein, executive director of New Jersey Transit, stood before reporters after a recent board meeting at the agency and contended the federal government was wrong to ask for money it spent in collaboration with the state.

“This isn’t like they sent us a check for $270 million and then walked away and let us spend it,” Weinstein said of the U.S. DOT. “They were a participant in everything we did, every day, every minute, every hour.“

If the Christie administration sticks to that position, it could be that the Transportation Secretary just made an offer that can be refused.

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