Governor Chris Christie Formally Kills ARC Tunnel Project

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New Jersey Governor Chris Christie killed a new train tunnel project under the Hudson River for a second time. "This decision is final," Christies said at a news conference Wednesday morning, adding that there is no opportunity for another review.

Christie cancelled the project on October 7 for the first time, saying it would cost $2 billion to $5 billion over its $8.7 billion budget. But he agreed to reconsider the next day after Transportation Secretary Ray LaHood, who supports the project, outlined various options to salvage it.

The two officials met again Sunday and Christie said the federal government was willing to chip in another $358 million, but that wouldn't go far enough to relieve the state of the financial burden of the overruns.

Christie said the other options on the table, including federal loans and a public-private partnership would still mean that New Jersey residents would ended up paying those overruns through fees or debt service.

Federal cost estimates range from $9.8 billion to $12.7 billion. This range does not include $775 million that the state would be required to spend to build the Portal Bridge South, an integral part of the ARC project.

Christie said what he was looking for was some other party -- the federal government, New York state or New York City -- to assume the risk of overruns.

"We are still going to have to pay for the cost of it," Christie said. "I cannot place upon the citizens of New Jersey an open-ended letter of credit."

In a statement, LaHood said: “I am extremely disappointed in Governor Christie’s decision to abandon the ARC tunnel project, which is a devastating blow to thousands of workers, millions of commuters and the state’s economic future. The governor’s decision to stop work on this project means commuters – who would have saved 45 minutes each day thanks to the ARC tunnel – will instead see no end to traffic congestion and ever-longer wait times on train platforms. Our DOT team has worked hard over the last several weeks to present Governor Christie with workable solutions to bring the ARC tunnel to life. I want to thank Senators Lautenberg and Menendez for their tireless efforts on behalf of this important project.”

Transit tunnel proponents were furious about the decision. "It wasn't about cost overruns," said Bob Yaro, President of the Regional Plan Association. "The issue for the governor is that he wanted to use the state's share of the ARC project to paper over the shortfall in the highway fund. There was another larger agenda that the governor appeared to have."

Yaro says canceling the project is a "a real tragedy for New Jersey, and for the metropolitan area, and for the country." He adds, "In the end there were no overruns that that the federal government, and the Port Authority and the state couldn't manage."

Senator Frank Lautenberg issued a statement today that read, in part: “The Governor was given a deal from the federal government on Sunday that put no extra imposition on the state of New Jersey for its obligation to the ARC Tunnel project, and the Governor refused it. It was clear from the beginning that Governor Christie planned to kill the ARC Tunnel no matter what... This is a tragic day in New Jersey’s history. Two weeks ago, Governor Christie made the biggest public policy blunder in New Jersey’s history. Today he repeated it... The Governor has put politics before performance, and it is the people of New Jersey who will pay the high price."

In Penn Station Wednesday morning, New Jersey residents seemed to share the governor's concern over the state's financial distress. "Some of our taxes in New Jersey are very high, and it's okay to invest if you know you're getting enough, but we've had increases this year," said Eunice Dickinson. "And you know what? If he has to stop it right now, then it has to be stopped right now."

Another commuter, Jim Kimball, who said he didn't vote for Christie, agreed with the governor's decision. "If I was looking to cut costs, a potential question mark is definitely the first place I'd look to start cutting."

John Brennan, a New Jersey resident who works in environmental consulting, liked the idea of the tunnel, but not if it meant going deeper into debt and not if New Jersey would bear the brunt of cost overruns. "If you go into a $5 five billion hole when you're already in a $30 billion hole, and you're already the highest-taxed state in the nation, that's too much to sacrifice."

But commuter Nancy Thomas said that killing the tunnel outright was "a big mistake," and she had a suggestion for what Christie should do: "Postpone it, not cancel it. Postpone it for a year, two years and see what the economy is next year at this time."