Home ARC Tunnel ARC Fallout: Christie’s excuses, pointing fingers

ARC Fallout: Christie’s excuses, pointing fingers

by Benjamin Kabak

It’s barely been 24 hours since New Jersey Gov. Chris Christie killed the ARC Tunnel, and already the fallout is loud and divisive. New Jersey’s Democratic Senate representatives are slamming Christie for what they see as a national play for headlines while some New Jersey-based activists are blaming New York for its unwillingness to help fund an interstate project. Let’s dive in.

Christie defends his decision

After announcing his decision to kill ARC via a press release, Christie held forth for twenty minutes with members of the press. If you’d like to watch him dance around the issue, he’s made the videos available for all to see.

Basically, as I’ve mentioned before, Christie’s decision came down to the illusion of money. He wanted to, he said, find “a way to work around the unacceptable level of risk and cost that was being asked to be borne by the taxpayers of the state of New Jersey.” He still claims that the feds were putting forth total project costs as high as $13.8 billion even though Secretary of Transportation Ray LaHood disputed that total last week, and he claimed that divorcing the Portal Bridge South from the ARC Tunnel funding scheme wasn’t possible.

Christie’s excuses ran deep. When discussing the cost-saving measure of connecting the tunnel to Penn Station instead of the deep cavern beneath 34th Street, he said that his idea didn’t address the real problem. “Even if that aspect of the project was successfully implemented,” he said, “it would not provide a means for covering current cost overruns nor the contingencies necessary to conclude a funding agreement with the FTA, and I’ll get back to that in a second. Simply put, it wouldn’t hold taxpayers harmless in New Jersey for cost increases and cost overruns that have already emerged, and could continue to be even greater as the project moved forward over the next eight years.”

Ultimately, Christie’s 20-minute statement was a national show of economic force designed to say all the right things in an appeal to voters looking for fiscal responsibility. “I cannot place upon the citizens of the State of New Jersey an open-ended letter of credit,” he said, later adding, “This is how we got ourselves into the third highest debt load in America. This is how we got ourselves in to the awful fiscal mess that we’re in, and often during the campaign, I would say that if I were elected I would make the hard decisions that were necessary in order to return our state to fiscal health.”

He didn’t make mention of any future plans to study cheaper alternatives or ways to improve transit access from New Jersey to New York City. We’ll just have to keep waiting for that.

LaHood, Lautenberg respond

Following Christie’s press conference, both New Jersey Sen. Frank Lautenberg and Secretary LaHood issued statements in response to the development. Lautenberg’s was more vehement than LaHood’s.

Says Lautenberg:

“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. In doing so, the Governor has once again put politics over performance.

“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. Today he killed the prospect for improving New Jersey’s economy and creating thousands of new jobs. He increased the amount of toxic fumes that will be discharged from idling cars stuck in traffic, and he took away an opportunity for New Jersey housing values to go up.

“I was a CEO and I know you need to be at work to do your job, and Governor Christie is out stumping in other states and not doing his job at home. While the Governor is on political missions in Indiana, California, Ohio and other states, he is ducking the needs of people in New Jersey. In just nine months of being in office, the Governor has bungled the opportunity to score $400 million dollars for our students and now he has lost over $6 billion in transportation funding.

“New Jersey Transit is coming off one of the worst summers for delays in recent memory. 1,400 delays were recorded this summer, and just this week a minor derailment caused hour-long delays for thousands of commuters. Delays and derailments are only going to get worse on our aging infrastructure and thanks to the Governor, New Jersey commuters shouldn’t count on new rail service options for decades to come.

“The Governor has put politics before performance, and it is the people of New Jersey who will pay the high price.”

In a “Truths and Myths” section of the press release, Lautenberg starts to get a little sloppy with the facts. He disputes the idea that Christie is “killing the tunnel because the state cannot afford it” and instead claims thats Christie torpedoed the project only to “move $1.25 billion in New Jersey Turnpike Authority funds dedicated to the ARC Tunnel to the state’s Transportation Trust Fund.” The reality is a mix of the two.

LaHood chose a more diplomatic approach. “I am extremely disappointed in Gov. 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,” he said. “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 team has worked hard over the last several weeks to present Governor Christie with workable solutions to bring the ARC tunnel to life.”

Looking at New York

Meanwhile, Mary Forsberg points her finger at our side of the river. In an Op-Ed for The Times, Forsberg questions why New York wasn’t willing to help fund the ARC Tunnel. “Where, specifically, is New York’s contribution to the effort? Original estimates put the project’s cost at $8.7 billion, with New Jersey chipping in $2.7 billion and the federal government and Port Authority of New York and New Jersey each contributing $3 billion,” she writes. “In other words, New Jersey would have to shell out more than its fair share for the tunnel project, while New York, which stands to gain in a number of big ways, would pay nothing.”

Forsberg, the director of research at the New Jersey Policy Perspective, calls upon New Jersey to rais its gas tax, but she also cites the tax revenue disparities between New York and New Jersey due to the tax credits granted to commuters. Because New York is in a comparatively better tax position, she urges the Empire State to help out the Garden State in realizing a project that benefits both. “To match New Jersey’s contribution, New York should dedicate the billions of dollars of income taxes that it annually collects from New Jersey residents toward construction of the tunnel. That way each party would have a quarter in the kitty,” she writes.

The state though already fronts numerous costs borne by commuters. We do not enforce a commuter tax and pay for all of the services — police, fire, transportation, etc. — that accrue as a result of the numerous people who commute into the city each day. Some would argue that we already pay our fair share of costs, but Forsberg’s argument is not without merit.

You may also like

22 comments

Marc Shepherd October 28, 2010 - 1:27 pm

It’s hard to escape the conclusion that everyone is a little bit right, and also a little bit wrong.

Christie is right that the project was deeply flawed, but it’s clear that he had no serious interest in improving it. I have to think he was intent on killing the project, no matter what. If dollars previously earmarked for ARC wind up in the highway fund, it is hard to draw any other conclusion.

Unfortunately, we live in an era of all-or-nothing politicians: Democrats who never met a problem that government can’t solve, and Republicans who never met a tax they could vote for.

Reply
Phil October 28, 2010 - 2:24 pm

This guy is a clown. Thank god people in new york got to see this idiot in action and wont make the same mistake with Paladino.

Lets say the project is over costs, why couldn’t they go back to the drawing board? Its simple, He wants to put in a quick fix and run for president. Typical short and quick fix and forget about the long term.

His actions are not in the best interest of anyone but himself.

Reply
Marc Shepherd October 28, 2010 - 3:21 pm

Why couldn’t they go back to the drawing board?

This project already had a 20-year drawing board. For something this big, you don’t just doodle on a napkin and start digging. Any kind of serious re-think would take years.

Reply
Bolwerk October 29, 2010 - 2:08 pm

Yes, and maybe it was set in stone: build and get the money, or don’t build and don’t get the money. The thing is, we will never know because Christie never bothered trying to push for a cheaper redesign while retaining the federal and PA contributions.

Reply
Gary October 28, 2010 - 2:37 pm

“Lautenberg starts to get a little sloppy with the facts. He disputes the idea that Christie is “killing the tunnel because the state cannot afford it” and instead claims thats Christie torpedoed the project only to “move $1.25 billion in New Jersey Turnpike Authority funds dedicated to the ARC Tunnel to the state’s Transportation Trust Fund.” The reality is a mix of the two.”

Ben, you are giving Christie WAY too much credit taking him at his word. Watch what he does with the money. Just watch.

Reply
Benjamin Kabak October 28, 2010 - 2:39 pm

Oh, I know what he’s going to do with the money. But that’s not the only reason for killing the project, as Lautenberg claims. Christie’s concerns about the cost overruns aren’t unfounded. His complete unwillingness to do a single thing about it is the real problem.

Reply
Think twice October 28, 2010 - 2:39 pm

IMO New York’s indifference to ARC is that the tunnel could work both ways; making it easy for New Yorkers (and New York businesses) to get to Jersey. Taking themselves and their money to live or work there. In my family there are life-long New Yorkers who packed up and moved to Jersey for one reason of another. It may be why the idea of free transfers between NY Subway and PATH is almost never entertained by NYC’s and Albany’s decision makers.

Reply
peterdiddy October 28, 2010 - 3:58 pm

interesting point…i know that i’d give serious thought to relocating to NJ if commutes were faster & more reliable

Reply
Bolwerk October 29, 2010 - 2:19 pm

Given the tax situation, relocating yourself doesn’t hurt NY. However, if your job moves to NJ….

Reply
Al D October 28, 2010 - 3:03 pm

..but there is plenty of money to expand the NJ Tpke to 12, count’em 12, beautiful, big, glorious lanes from exits 6 to 9. He has my best, out of state interests at heart. His decision benefits me most as an occassional weekend visitor or pass through of NJ. I will continue to benefit from filling up on cheap gas before I cross back to NYC, and I’ll get home faster once those additional lanes open up.

Sorry NJians, your commutes will become longer, and your property will appreciate less because Gov. Christie wants to take care of us, the out of staters, first.

Thanks very much Mr. Chris Christie!

Reply
John October 28, 2010 - 4:16 pm

The current project plan — with a dead-end tunnel on 34th Street — limits any way to somehow mix in Amtrak-related funding to the project, by making ARC unusable for their service other than emergency situations. It also is of limited benefit to New York, since a line that has one stop in Manhattan and all its others (well, other then north of Suffern on the Port Jervis line) in New Jersey isn’t going to be seen as a boon by city politicians — they’re going to see it as an easier way for more workers to earn their money in New York and then get out of town to pay the bulk of their taxes in New Jersey.

An ARC with at least some through-running access at Penn Station (or even Grand Central) gives both Amtrak and New York a bigger stake in the project, which would improve the access to funds/sharing the cost overrun risk.

Reply
Aaron October 28, 2010 - 4:48 pm

Given all of the necessary projects in New York, why should New York pay for a project that, as noted above, is designed primarily for NJ commuters? Not sure why NY should be bearing a burden above the PA NY/NJ burden (the multi-state agency designed for cross-border issues).

Reply
Bolwerk October 29, 2010 - 3:34 pm

The real failure of New York isn’t trying to marshal stakeholders to support a cheaper option.

Reply
Son of Spam October 28, 2010 - 7:55 pm

I don’t mean to hijack this comment thread, because the travesty that is the arc cancellation certainly warrants the intelligent discussions that have taken place here the past few weeks. I thank you all for the insight.

But, regarding the commuter tax, the implication is that commuters get away with not paying for city infrastructure & services and such. But isn’t that what the (large) taxes levied upon the businesses that employ the commuters are for? Employees are company assets, and they’re generating tax revenue for the city by enabling their companies to make money.

Commuters are coming into the city for the main purpose of working and making money, and even when they’re not working, they’re putting money into the city economy which in turn funds infrastructure and services.

Just a different way to look at it, I guess.

Reply
Alon Levy October 28, 2010 - 9:03 pm

Lautenberg should stick to getting stations named after him.

Reply
Eric F, October 28, 2010 - 10:02 pm

Lautenberg should explain why NJ got such lame federal aid for this deal while the feds are spending billions to build an HSR line from Tampa to Orlando. What a waste of space he is in Washington. Luckily, he is a Democrat hack so no one will point out the incongruity of his demanding that his state make up for the federal aid he couldn’t secure for an interstate project.

Reply
Alon Levy October 28, 2010 - 10:53 pm

Lautenberg got the feds to cough up all this money for a project that has zero benefit outside the state. Even Florida HSR, while stupid, has some redeeming features: it will function as a showcase of HSR technology, and eventually serve some purpose when it connects to Miami in future phases. You’re right that Florida got a really sweet deal, but in the internal logic of Ray LaHood it makes some amount of sense.

Reply
Eric F. October 29, 2010 - 9:38 am

Anything that takes pressure off the NEC would have some benefit to Amtrak I would think. I’d also view it as a civil defense enhancer. The notion that it only benefits NJ is not something you really believe, is it? Without commuter rail lines running into Manhattan, the Manhattan central business district would resemble Phili’s.

Reply
Bolwerk October 29, 2010 - 2:17 pm

Amtrak probably doesn’t have any serious NEC capacity problem. They run a few services an hour on the NEC and, outside of maybe MNRR territory, not many commuter agencies run much more.

Reply
David M October 28, 2010 - 10:18 pm

I don’t live in either state. Are Forsberg’s statements about NJ residents who work in NY paying income tax in NY instead of NJ accurate?

http://www.nytimes.com/2010/10.....=1&hp

“all those commuters calculate how much income tax they owe New York State and take that as a credit against what they owe New Jersey. Because effective income tax rates are higher in New York, they pay little, if anything, to their home state.”

Reply
Eric F. October 29, 2010 - 9:42 am

They pay income tax in the state they earn it. They pay sales tax on everything they buy in NY. The businesses they work for pay property and income taxes. Plus, the commuters don’t send their kids to NY schools, don’t wind up in NY prisons, don’t collect NY welfare or medicaid. The idea that they should get dinged by an added “commuter tax” is utter lunacy.

Reply
Frank October 28, 2010 - 10:33 pm

$4 b to $14.5 B to whatever the unions and the bureaucrats want to take from the taxpayers. Makes sense to me. Spent public money without regard to cost on a project that is completely out of control.

Reply

Leave a Comment