New Jersey Can't Pay Its Share for Rail Tunnel, Moody's Saysby
Amtrak's Gateway project a boost for region, though at a cost
State's lack of transportation funding adds debt pressure
New Jersey doesn’t have enough money to pay for its part of Amtrak’s proposed $20 billion Hudson River tunnel and related rail improvements, Moody’s Investors Service said.
“The state has exhausted its current transportation funding resources and will
need to identify new revenues or significantly cut costs to issue debt,” according to a report by analysts including Baye Larsen that was released Tuesday.
Though New York also will feel pressure on budgeting and borrowing, it can manage costs over a long period, according to the report.
“Although the states have yet to identify specific funding sources, their contributions will ultimately be borne by taxpayers and transportation users in the New York City metropolitan area,” Larsen wrote. “Additionally, at least a portion of Amtrak’s cost is likely to be paid by riders.”
Augmenting and improving Amtrak’s tubes that bring commuters under the Hudson is among the biggest U.S. infrastructure challenges. The only rail links to Manhattan for Amtrak and New Jersey Transit are at capacity, while peak commuter demand is expected to grow 20 percent from 2010 to 2020.
Federal officials and Governors Chris Christie of New Jersey and Andrew Cuomo of New York have agreed on an oversight and pay structure. The states intend to defer debt service costs on their share, $10 billion, until after 2025 and when the project is done, Moody’s reported.
Christopher Santarelli, a spokesman for the New Jersey treasury, said the transportation fund fully supports spending through June 30, as planned.
"By fiscal year 2017, the state will identify funding for critical transportation needs, as we have every year," he said by e-mail.
Though New Jersey stands to gain from a doubled rush-hour train capacity, the state “will have to structurally adjust its budget before taking on new project costs,” according to the report. About half the state’s $18.9 billion in debt has financed road and rail projects through the Transportation Trust Fund, which will run out of money July 1.
“Absent an increase in revenues or reduction in other spending areas, any increase in appropriations to cover additional debt service or pay-go projects would further pressure the state’s general fund budget,” the report said.