The Trump administration criticized a plan to pay for a $12.7 billion rail tunnel under the Hudson River, telling New Jersey and New York officials in a letter Friday that there’s no deal for the federal government to cover half of the project’s cost.
In the letter, Federal Transit Administration Deputy Administrator K. Jane Williams wrote that the recent funding proposal by the two states for the first phase of the project “raises several serious concerns,” including that it relies on a “non-existent” agreement for the federal government to split the bill with the two states.
“There is no such agreement. We consider it unhelpful to reference a non-existent ‘agreement’ rather than directly address the responsibility for funding a local project where 9 out of 10 passengers are local transit riders,” Williams wrote.
In 2015, federal and state officials announced that the federal government would fund half of the so-called Gateway tunnel project. In December, New Jersey Gov. Chris Christie and New York Gov. Andrew Cuomo reached an agreement on how the two states would cover half of the first phase of the project, estimated at $11.1 billion.
But Williams said a 50 percent federal funding commitment would be “considerably higher than much existing precedent for past ‘mega projects.’” She added that assuming that more than $5 billion in federal capital investment grants will be available for the project “lacks recognition of the impact that such funding would have on the availability of funds for the remainder of the country.”
President Donald Trump is expected to announce an infrastructure plan this month. Brian Murray, a Christie spokesman, said in a statement that “there is no doubt” the Trump administration understands the economic importance of the rail tunnel.
“We are confident that, as the White House advances an infrastructure proposal this year, federal funding for the most important transportation project in the United States will be addressed,” Murray said.
Williams’ letter was sent to officials at the state of New York, New Jersey Transit, the Port Authority of New York and New Jersey, and the Gateway Program Development Corporation.
In response, New York State Budget Director Robert Mujica wrote Sunday that the 50:50 cost sharing agreement was discussed in an August meeting in the White House that included Trump, Christie, Cuomo, and members of the two states’ congressional delegations.
“Stepping away from the 50:50 framework now would represent stepping away from a previously agreed upon path and the entire basis for getting this critical national infrastructure project done,” Mujica wrote.
Under the proposed funding plan, both states would use federal loans for the first phase of the project.
NJ Transit would raise $1.9 billion by hiking rail fares by 90 cents to cross the Hudson starting in 2020, with further fare increases to $1.70 in 2028 and $2.20 in 2038. The Port Authority had committed $1.9 billion to the project, and New York plans to borrow $1.75 billion for the project.