ARC Funding: What's at Stake

Tuesday, October 05, 2010 - 03:23 PM

(New York -- Matthew Schuerman, WNYC) New Jersey never put up much of its own money towards the ARC Tunnel. And yet Governor Chris Christie seems poised to cancel the project because of money concerns.

Out of the tunnel’s $8.7 billion budget, New Jersey was contributing just $2.7 billion. Even that figure overstates the case, however. According to transportation officials, only $1.25 billion would come from New Jersey sources: the tolls collected by the NJ Turnpike Authority. Another billion and change comes from the federal government’s Congestion Mitigation and Air Quality Improvement Program (CMAQ), according to transportation officials.

If, or when, the tunnel’s canceled, New Jersey could divert the $1.25 billion in turnpike tolls easily—even to help out the state’s ailing Transportation Trust Fund. Christie will also be able to spend the CMAQ money on other road and bridge projects—although transportation sources say the money will have to be used in accordance with federal regulations, which would rule out its use for the trust fund.

The other $6 billion, contributed equally by the Port Authority and the Federal Transit Administration, is money slated specifically for the ARC Tunnel. Transportation sources say that Christie will have to sacrifice all of that money should he cancel the tunnel. However, presumably some Port Authority projects would take place in New Jersey.

Christie’s stated concern all along, however, was what New Jersey would do if the tunnel ended up costing more than $8.7 billion. According to one legislative source, the current agreement with the Federal Transit Administration calls for the Port Authority and the state of New Jersey to be jointly responsible.

The bottom line: Christie gets loses $6 billion in free money. But he gets to spend a different $2.25 billion on roads and bridges, all the while limiting his liability for cost overruns.

He also wouldn’t need to increase the gas tax to bail out the Transportation Trust Fund,thereby protecting his reputation as a fiscal conservative.


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Comments [4]

Robert Moore

I wonder if a new tunnel is built under the Hudson, how ill Penn station cope with the extra traffic? My 8 years NJ Transit commuting experience showed me many more arrival delays awaiting (often in the tunnel) a free track at Penn station than awaiting the tunnels themselves. New tunnels may just push the congestion to a different point.

Oct. 06 2010 10:54 AM

cant figure out the structure of this website. instructions on top might help a bit

Oct. 06 2010 10:49 AM
Mark Nardolillo

Although the Governor has been right in some fiscal matters he is wrong in the short and long term in deciding to redirect NJ's portion of its contribution to the ARC towards the TTF and road maintenance.
First he is losing the federal match and some immediate Port Auhtority spending ranging from $4B to $6B depending on how much gets respent in NJ. This like refusing to cash in your winning lottery ticket because you have to pay taxes. This sacrificies 1000's of jobs while continuing to damage local infrastructure and air quality by increasing traffic congestion.
In the long term he is losing the economic stimulative effect that mass transit has demonstrated consistently it provides to the region where mass transit projects are built. The Hudson Bergen LRT is a great example in our own backyard. The induced redevelopment spurs private sector spending and mkes the region more atractive for companies with good paying jobs to move to or expand.
Whereas another widened highway in an already congested state has limited short term benefit and minimal long term macroeconomic benefit as Nj has an already overbuilt road system.
In order to further highlight his fiscal conservative bona fides, the Governor is sacrificing the short and long term economic and environmnetal benefits of this critical infrastructure project, of which NJ taxpayers are contributing less than 20% towards. What a waste.

Oct. 06 2010 01:00 AM

Should be "Christie LOSES $6 billion in free money" in second to last paragraph.

Oct. 05 2010 04:16 PM

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