April 10 (Bloomberg) -- New Jersey commuters will continue to suffer workday delays, miss job opportunities and forgo $4 billion in personal income thanks to Governor Chris Christie’s decision to kill a rail tunnel to New York, independent congressional investigators said.
Christie, a first-term Republican, inflated cost estimates when he stopped construction of the Access to the Region’s Core project, known as ARC, in October 2010, saying his state couldn’t afford it, according to a report from the U.S. Government Accountability Office.
The report was requested by New Jersey’s U.S. Senator Frank Lautenberg, a Democrat who chairs the transportation subcommittee. Lautenberg, 88, has called the Hudson River tunnel cancellation “one of the biggest public policy blunders in New Jersey history,” saying it would cripple the state’s growth for decades by limiting access to Manhattan.
“ARC was critical to the future of New Jersey’s economy and it took years to plan, but Governor Christie wiped it out with a campaign of public deception,” Lautenberg said in a statement today. “The future of New Jersey’s commuters was sacrificed for the short-term political needs of the governor.”
The project was estimated by the Federal Transportation Administration to cost as much as $12.4 billion, with New Jersey paying 14.4 percent, according to the report. Christie, 49, had said state officials estimated the price could reach $14 billion, with New Jersey responsible for 70 percent of the total cost.
“Current tunnel, bridge and rail infrastructure serving this corridor is already at or near capacity,” the GAO said in its introduction to the study. “This increase in travel demand, fueled by population growth in the region west of Manhattan and employment within Manhattan, could result in more congestion and greater delays for commuters.”
The report didn’t account for all costs associated with the project, including a $775 million bridge that would have had to be built in conjunction with the tunnel, Michael Drewniak, a spokesman for Christie, in an interview. New Jersey would have been responsible for cost overruns, Drewniak said.
Without the bridge, the cost might have reached $13.7 billion, according to an Oct. 7, 2010, memo to Christie from a panel of NJ Transit Corp. and Port Authority of New York and New Jersey executives whom Christie appointed.
The $13.7 billion figure wasn’t included in the GAO report’s timeline of cost estimates.
Christie’s cancellation freed $4 billion earmarked for the tunnel to help replenish New Jersey’s highway fund, which is running out of money for new projects, said Assemblyman Joseph Cryan, a Union Democrat. It also helped Christie avoid breaking a campaign promise that he wouldn’t raise the state’s gasoline tax, which goes into the fund, Cryan said in a statement.
“The ARC tunnel project would have brought thousands of jobs to our region and increased capacity and provided long-term stability to our severely aging transportation infrastructure,” Cryan said. “The governor put together a team to exaggerate the price tag on the project and then massively overstated the state’s share of the costs. These latest details are more evidence of the governor’s continued pattern of distorting the facts to suit his agenda.”
’Yells and Screams’
Christie is among Republican governors, including Florida’s Rick Scott, who have rejected Obama administration funds for rail projects. Governors John Kasich of Ohio and Wisconsin’s Scott Walker also have spurned federal rail funding.
New Jersey and federal officials began planning for the ARC tunnel in 1995, and work began in 2009. It was the largest U.S. mass-transit project when Christie canceled it.
“I abandoned the getting-everything-you-want thing a long time ago but I refuse to compromise my principles,” Christie said today during a speech in Manhattan. “When they want to build a tunnel to the basement of Macy’s and stick the New Jersey taxpayer with a bill of three to five billion over, no matter how much the administration yells and screams, you have to say no.”
The 8.8-mile (14-kilometer) conduit linking northern New Jersey suburbs and Manhattan was meant to double the number of commuter trains to New York during peak times. It would have reduced round-trip commutes by as much as 30 minutes, and boosted the value of homes near transit stations by $18 billion, according to the Regional Plan Association, a New York-based transit-advocacy group.
The ARC project also would have added flexibility during service interruptions, the GAO report said. Currently, one 15-minute disruption can delay as many as 15 other trains, according to the report.
“New Jerseyans who commute into New York City already face near-daily struggles with an overburdened rail system and jammed highways, bridges and tunnels,” Lautenberg said. “We are at capacity, and our only hope for relief in this decade was ARC.”
The federal report found that cost estimates grew to $12.4 billion in October 2010 from $7.4 billion in August 2006. As of April 2010, when the estimate was $8.7 billion, about half the cost would have come from federal sources, and the remainder from the Port Authority of New York and New Jersey and the New Jersey Turnpike Authority, the report stated.
The GAO findings were reported earlier today by the New York Times.
’Very Bad Deal’
“The GAO report simply bears out what we said in the fall of 2010, and say to this day: The ARC project was a very, very bad deal for New Jersey,” Drewniak said in an e-mail. “The taxpayers of New Jersey are fortunate that the governor showed strong leadership by putting them first. The ARC project is still dead and it’s not coming back.”
The report cited studies that estimated that New Jersey communities served by the ARC project would have had an average increase in home value of $19,000, or 4.2 percent, in part because of improved access to high-paying jobs in Manhattan.
Other studies cited by the GAO estimated that the project would have provided about 59,900 jobs directly on site during construction and total employment of about 98,300 in the region. Ten years after completion, the project wold have added 44,000 new jobs and almost $4 billion in personal income, according to the report.
New Jersey ranked 40th among U.S. states and the District of Columbia in economic health in the fourth quarter, according to the Bloomberg Economic Evaluation of States index.
Bob Yaro, president of the Regional Plan Association, said the “one viable option” now is Amtrak’s proposed Gateway commuter-rail tunnel, with tracks shared by New Jersey Transit. Gateway, with a projected cost of $13.5 billion, would be completed in 2020.
“We desperately need new capacity under the Hudson, and it’s an even greater need since ARC was canceled,” Yaro said by telephone from his New York City office.
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