Thursday, October 28, 2010

Gov. Christie Pulls Plug On ARC Tunnel Means Amtrak Tunnel May Proceed

Gov. Chris Christie slammed the door on the ill-conceived ARC tunnel and the federal government chose not to resuscitate the project by stepping in to cover cost overruns. This is actually more good news than ARC tunnel adherents would care to admit. The ARC tunnel, a $8.7 billion project that was more likely going to cost $9.7 billion to $13+ billion depending on the cost overruns (all of which would have been borne by New Jersey taxpayers), was a tunnel project that would never have delivered on its promised additional capacity because it would have delivered passengers to a wholly new terminal separate from existing Amtrak and NJ Transit facilities and which NJ Transit lacks the operating funds to actually operate.

It speaks volumes about the true intentions of the federal government, and Transportation Secretary Ray LaHood and the Obama Administration that they chose not to pick up the tab on any cost overruns. They've been preaching high speed rail and mass transit infrastructure expenditures and this was as "shovel-ready" a project as one could imagine, and yet the feds didn't step up with the promise to pick up those overruns.

Why would they do such a thing?

It would have been a win-win for the Obama Administration to see the project restarted since it would provide jobs, build improved infrastructure, and even undercut Gov. Christie (who was a winner politically regardless of the outcome since he actually stood up for New Jersey taxpayers in a project that had more interstate commerce connections than any other on the table and to which New York was not contributing a dime of its own money).

The feds, if they truly thought this was a worthy project, should have come up with the guarantees to cover any cost overruns. That way, if the project came in on budget, they would have not incurred additional costs, and everyone could claim that they managed to bring the project in on budget.

What this says is that the Amtrak-proposed tunnel project is the preferable one - and one that will do what the ARC tunnel proponents claimed (and for which the tunnel was originally proposed).

Those claiming that this was a short-sighted approach to mass transit ignore that there was no reason to go ahead with a project that would not deliver on its goals of reducing congestion into Penn Station (when the problems with any one track would still result in massive delays on the Northeast Corridor). The project did not truly add capacity on the Northeast Corridor, and infrastructure deficiencies would remain - including ongoing problems with Amtrak power systems and the Portal Bridge bottleneck. Those need to be addressed in a substantive way in order to truly increase capacity and reliability on the Northeast Corridor. A new NJ Transit terminus in Manhattan would not get that job done and the trains would still be beholden to the power infrastructure that causes repeated and incessant delays on the Northeast Corridor.

Moreover, the idea of a one-seat ride from North Jersey makes no sense when NJ Transit lacks the operating funds to add additional trains and actually reduced service while increasing fares earlier this year. NJ Transit can barely operate at its existing level of service - it can't expect to add trains (and therefore capacity) anytime soon.

What we see is that NJ Transit lost out on a pet project that would have increased its own infrastructure footprint but without providing significant improvements for commuters who would have been given a tunnel to Herald Square for more than $9 billion.

Op ed pages are weighing in on the decision with some not quite expected positions. The NY Times op ed notes that Christie was right to be fiscally prudent and notes that New York wasn't asked to participate, but then says that Christie should have used a gas tax increase to cover the costs. That ignores the fact that NJ taxpayers are already among the most heavily burdened taxpayers in the nation, and that the gas tax is the one low-tax bright spot for taxpayers. The idea isn't to further increase the tax burden on NJ taxpayers.

The NY Post applauds the decision. It notes that the feds were basically asking New Jersey to take on more debt, even though the feds weren't going to commit to covering the cost overruns.

The Record's Charles Stile thinks that this decision burnishes Christie's political star and will fuel his (and GOP) political ambitions. It will certainly improve Christie's political standing among fiscal conservatives, but Stile ignores that it also highlights the fact that the Obama Administration did nothing to actually move the project forward except to propose that New Jersey take on more debt without getting New York to pony up money for an interstate project or for the federal government to cover cost overruns so as to keep to Obama's own promise of improving mass transit infrastructure. This decision blows a huge hole in Obama's own political rhetoric about spending money on infrastructure. That point was made in the paper's editorial.
Much has been said about the loss of $3 billion in federal transportation funds. The loss is noted, but not enough has been said about why the Obama administration, which is touting large public works projects, did not pony up more funding. Rather than criticize Christie for showing fiscal restraint, supporters of ARC should be criticizing federal officials for not stepping up and funding the project.

Amtrak also needs new trans-Hudson tunnels and more track capacity in New York Penn Station. These are national priorities. And ARC did nothing to address them.

Christie's administration, as well as the state's congressional delegation, should press federal officials to commit to building new trans-Hudson tunnels. Additionally, state officials should address the substandard mass transit options within New Jersey.

It is often said that if you want to get out of a hole, stop digging. On Wednesday, Christie took away the shovels.
This is something that ARC tunnel proponents simply cannot explain. Christie exposed the Obama Administration's infrastructure program as nothing more than hot air and in the process protected New Jersey taxpayers from endless cost overruns on a project that would have had dubious merits.

Now, Amtrak and NJ Transit can focus on building a proper tunnel to Penn Station that will do what the ARC tunnel was supposed to have done - truly increase capacity and reliability in a cost-effective manner.

And like clockwork, the Northeast Corridor is hit by still more power problems causing delays. Nothing in the ARC tunnel project would address that longstanding problem.

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