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Governor Lands Commuters with $2B in Fare Hikes to Help Pay for Gateway Project

Christie, Cuomo flesh out payment plan for long-planned infrastructure upgrade that involves tapping New Jersey straphangers for a big contribution

gateway amtrak
Credit: Amtrak/Chuck Gomez
Amtrak train exiting the north tube of the outmoded Hudson River Tunnel from New York into New Jersey

New Jersey Gov. Chris Christie and New York Gov. Andrew Cuomo yesterday added new details to an earlier agreement to fund the long-planned Gateway infrastructure project, which calls for the construction of a new trans-Hudson tunnel to replace the one in service now that is more than a century old.

But embedded in the governors’ more detailed funding plan for some portions of the project is a big catch for New Jersey Transit’s trans-Hudson commuters: Christie, as he is getting ready to leave office in just a few weeks, has signed them up for nearly $2 billion worth of fare hikes that would kick in starting in 2020, and last through 2038.

The governors’ announcement was immediately panned by state lawmakers and New Jersey transportation advocates, and Gov.-elect Phil Murphy is also already promising to see if he can undo it or at least find a better alternative once he takes office.

“This is the type of deal that tells you a lot about why people are frustrated with politics,” Murphy said yesterday at the site of a transition meeting in East Brunswick.

“You wait until the last minute to take action, and then you settle for some deal that got cut in a back room somewhere so that one side, or one politician or another, gets a ‘win’ without regard for the impact that it may have on the residents who foot the bill,” Murphy said.

Federal funding not certain

christie and cuomo
New Jersey's Republican Gov. Chris Christie (left) and New York's Democratic Gov. Andrew Cuomo

Despite yesterday’s announcement, it remains an open question as to whether the proposed Gateway initiative will ever get the billions of dollars in required federal funding that was sketched out in an initial agreement between the two governors and the administration of former President Barack Obama. President Donald Trump has not yet committed to honoring that agreement, meaning the announcement from the governors yesterday could still end up being largely an academic exercise.

A new rail tunnel between North Bergen and New York’s Penn Station is the most significant feature of the Gateway project, which officials now estimate could cost nearly $30 billion to complete. The new tunnel would replace an existing, 107-year-old tunnel that currently is used daily by both NJ Transit and Amtrak. In addition to its advanced age, the tunnel was heavily damaged by 2012’s superstorm Sandy and needs urgent repairs.

Christie, a second-term Republican who leaves office next month, threw his support behind the Gateway initiative after deciding in 2010 to cancel a prior tunnel project known as ARC (Access to the Region’s Core). That project already had a federal funding commitment, but Christie cited concerns about cost overruns. He also justified his controversial decision by criticizing the track alignment that he inherited from former Gov. Jon Corzine, which would have brought NJ Transit customers to a terminus near Herald Square instead of nearby Penn Station in New York.

Christie also decided to use the funding for the earlier tunnel project to help pay for road and bridge projects in New Jersey, a move that prevented him from having to approve an unpopular gas-tax hike until well after his successful 2013 run for re-election.

New Jersey to pay more than New York

Under an initial framework for Gateway funding that was announced in 2015, the cost of the initiative —which also calls for other upgrades to the region’s infrastructure — would be shared equally between the federal government, and New Jersey, New York, and the Port Authority.

The new agreement announced by Christie and Cuomo yesterday defined a New Jersey commitment of $1.9 billion toward its share of the project’s costs, with New York putting up $1.75 billion. Earlier this year, the Port Authority set aside $2.7 billion in its latest 10-year capital plan to cover Gateway-project debt service.

Christie said in a statement yesterday that the new agreement marked a “pivotal milestone.”

But attached to the announcement were letters from the two states’ transportation officials that explained how they plan to cover their respective shares of the Gateway funding commitment. For NJ Transit, the plan according to agency executive director Steve Santoro, is to enact a series of fare hikes for trans-Hudson passengers that would begin in 2020 at a per-trip cost of 90 cents. The rate of the surcharge would increase to $1.70 in 2028 and to $2.20 in 2038, according to Santoro. Like Murphy, state lawmakers immediately criticized that element of the announcement yesterday, with Senate Majority Leader Loretta Weinberg (D-Bergen) calling Christie’s last-minute move an “outrageous, back-door maneuver.”

Weinberg: ‘Christie’s mismanagement’

“Commuters have suffered for years due to Christie’s mismanagement, neglect and underfunding of NJ Transit. They have had enough, and so have we,” Weinberg said.

Lawmakers also said Christie had apparently gone back on the framework of the 2015 funding agreement by not requiring New York to put up an equal share of funding as New Jersey.

“The agreement by Governors Christie and Cuomo is a travesty and clearly violates earlier agreements to have New York State pay its fair 50 percent share of the cost of the Gateway tunnel project,” said Sen. Robert Gordon (D-Bergen).

The new funding framework was also criticized by Nick Sifuentes, executive director of the Tri-State Transportation Campaign, a leading commuter advocacy group.

“Gov. Christie can’t undo the damage of cancelling ARC now, but we should find a fairer way to fund Gateway construction that doesn’t ask daily commuters to pay for every penny of New Jersey’s contribution to the Gateway project,” Sifuentes said.

Murphy ‘will review’ the plan

Murphy said the outgoing administration did not consult him on the new deal. “I’d like to know whether there were alternatives that did not involve further fare hikes and if so why they were not pursued,” Murphy said. “I don’t know the answer because I was not in the room or part of the negotiations.”

Murphy, a Democrat, made NJ Transit’s finances and a series of fare hikes that have been implemented during Christie’s tenure a top issue during his successful run for governor against Republican Kim Guadagno, Christie’s longtime lieutenant governor. He’s also promised to find more state funding for NJ Transit and has called Gateway a top priority. Yesterday Murphy promised to take a hard look at the Gateway funding plan he’ll now inherit from Christie.

“When I am sworn in as governor we will review the application and see if there is any way to provide additional relief to our commuters, and if there is, we will pursue it,” he said.

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