Feds Would Like Their Tunnel Money Back, Please

New Jersey Governor Chris Christie called his cancellation of the Trans-Hudson ARC tunnel project a "dollars and sense issue," as New Jersey couldn't afford the cost of $2.7 billion plus any overruns for the project. But now that he's cancelled it, the Federal Transit Administration is asking for the state to refund the cash they put in. In a letter written to NJ Transit head James Weinstein, the FTA says, “NJT must immediately repay all the Federal financial assistance expended for ARC under the [work agreement] which is currently estimated to be $271.091 million, plus reasonable interest and penalty charges that will be determined by FTA." Who wants to bet on when NJ Transit raises their fares?

The original work agreement stated that New Jersey would be responsible for $2.7 billion and any overruns for the $8.7 billion project. The Port Authority of New York and New Jersey would pay $3 billion, and the FTA would pay $3 billion from their "New Starts" program, but was entitled to a refund if the project were cancelled. NJ Transit spokesman Paul Wykoff and Christie spokesman Michael Drewniak said they did not know where they would find the funds to pay off the FTA.

Assemblyman John Wisniewski criticized Christie for leaving the state with a massive debt. “The governor famously throughout this has said he is not going to spend money the state doesn’t have. I wonder where he is going to get this money. We’re approaching $700 million," he said, referring to the $400 million lost when the state messed up their Race to the Top application. Meanwhile, Amtrak continues to talk about whether "the work already accomplished on the tunnel project could be incorporated into" Amtrak plans for a new trans-Hudson tunnel. But Drewniak said in a statement, "To repeat yet again, the ARC Tunnel project is over."

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By Jaya Saxena in News on November 9, 2010 1:10 PM

Comments [rss]

Tim Schreier

$700,000,000 that's a lot of donuts, to put it in language Christie might understand.

grayskies

Awesome, they're getting absolutely nothing, yet still have to pay money! Instead of paying more and, y'know, actually getting a future return out of it. What Republicans don't understand about government is, this sort of spending is *investment* for the future. Portland, OR and Seattle, WA are a great demonstration of this: Portland spent the money in the 1970s and built up their light rail based on expected future demand. Seattle...saved a lot of money! And now their mass transit is non-functional and they're blowing tons of money trying to improve it so people can get their cars out of the traffic snarls.

So, great, enjoy literally burning $250 million, New Jersey. I'm sure your budget will appreciate the difference when you spend many times this *anyway* once the PATH tunnels wear out.

gothamfaster

First, please enjoy literally abusing the word "literally" with a heavy stick until it cries and bleeds all over your surprised face.

Second, it's a difficult thing to account for, but I don't think Portland is anywhere near break-even on their investment, even if you consider increased/sustained income tax revenue from a more attractive and liveable city.

Also, Seattle started on their light rail path about 14 years ago. Their bus system is relatively functional, as was Portland's before MAX. A lot of people were stuck with LONGER commutes because express buses were replaced in favor of the west-side MAX.

212001595

Yes Republicans at their finist...in case you don't know NJ is a blue stste..both state houses have been in the democrats hands for ages..and the last time we voted in a republican governor was i belive 1998. So don't blame the republicans on the bankrupt stste NJ is in...look in the mirror at yourself and the democrats who only worry about the NJEA the all the other union state workers..god forbid we make them pay for some of their health care, take away some of their benefits no body in the private section could ever get...get involved man educate yourself..learn what the democrat controlled state of NJ has been up to...the stupid stupid legislation they put forth when we are in a bankrupt state..

grayskies

Indeed, Republicans at their finest! That is, your *Republican* governor who unilaterally canceled this project. Which is exactly what we're talking about. But good job trying to deflect the blame.

luke*

Republican policy at it's finest!

212001595

Rolltide23 you are right on the money man..glad someone is awake at the wheel.

Thanks

gagneur

New Jersey is kind of like that relative in Puerto Rico, or Kenya waiting for remittances from the rich relatives in New York. Let's all acknowledge that that Montclair or Princeton wealth isn't coming from jobs in New Brunswick.

kevd

like

random transplant

Thats right, the J&J execs flying into New Brunswick each day by Helicopter are more likely to be from Chester and Union where they can can share country clubs with their NBC friends living over by Englewood.

kevd

And there are other biotechs in NJ too.

& CNBC is in Fort Lee!

It doesn't compare to the jobs and wealth created in NYC.

If it did you'd see more reverse commuting through those 2 100 year old rail tunnels under the Hudson.

random transplant

There are no high paying jobs in NJ because nobody commutes to them via public transportation? By that logic, NYC is a CEO ghost-town.

212001595

People wake up the state of new jersey is bankrupt..Frank Lautenberg is the king of fereral pork money..he did not bring home the full plate of bacon..Frank is there to support all his union friends, screw the tax payers of new jersey just look out for his own quote union bosses. Does anybody in there right mind think this tunnel can be built without cost overruns?? Again wake up the days of spending spending spending are over.. Frank Lautenberg should try and support our governor in lowering taxes and cutting out waste in nj..not running up more and more debt.

kevd

Thats very informative. Thanks, man.

Can we do something similar for NYC taxes?

But, it does not erase the $50 bilion in salary brought home to NJ from NY annually and the potential for a second rail tunnel to increase that amount dramatically.

That $50, though taxed as NYS income, does contribute enormously to the local economy west of the Hudson, and does contribute significantly to NJ coffers through sales taxes, gas taxes, real estate taxes & property taxes - especially as homes near rail lines that allow for a quick commute to high paying NYC jobs experience an increase in value.

kevd

meant as a reply to EastRiver.

kevd

PS. First 2 sentences are totally sincere. People often think I'm being sarcastic when I'm trying to be sincere.

EastRiver

New Jersey residents working in New York file a New York non-resident tax return and pay income tax to New York. They then fill out a New Jersey income tax return and get a credit for any income tax paid to another jurisdiction. In most cases the tax paid in New York is higher so it wipes out any obligations to New Jersey.

kevd

So they get a credit towards their NJ state income tax?

or they can deduct their NY State tax from they earned income?

if its the first - man, jersey really knows how to screw itself over.

EastRiver

if its the first - man, jersey really knows how to screw itself over.

It is the first but I don't think you can say Jersey is screwing itself. That's the way it is done in all instances where you have a state income tax - unless your state of residency has a reciprocal agreement with another state. For instance, New Jersey and Pennsylvania have an agreement: a New Jersey resident that works in Pennsylvania does not have to pay income tax to Pennsylvania and vice versa. You simply file your own state tax return. Your employer in the other state does not withhold taxes from your paycheck so you are responsible for paying the actual tax.

http://www.payroll-taxes.com/articles/reciprocals.html