The latest finance plan for a new rail tunnel under the Hudson River makes it clear that the New Jersey Turnpike Authority — and not the state’s mass-transit agency — will cover the state’s contribution to the long-sought project.
The updated finance plan for what’s known as the Hudson Tunnel Project, released late last month, says the New Jersey Turnpike Authority will be responsible for New Jersey’s share of the tunnel project, now estimated to be $1.6 billion.
The turnpike authority operates and collects tolls on both the New Jersey Turnpike and the Garden State Parkway. It most recently increased tolls last year during the coronavirus pandemic. The agency has also laid the groundwork for a series of automatic toll increases that will likely begin next year.
The updated finance plan for the tunnel project formalizes the undoing of an agreement that former Govs. Chris Christie of New Jersey and Andrew Cuomo of New York announced several years ago.
NJ Transit riders off the hook
That plan called for New Jersey’s contribution to the tunnel project to be funded with increased fares from New Jersey Transit riders. It was immediately panned at the time by then-incoming New Jersey Gov. Phil Murphy, a Democrat who has refused to increase rider fares since taking office in early 2018.
Late last month, Murphy — who is now seeking a second term — endorsed the updated finance plan that formally calls for using revenue from the toll roads to cover New Jersey’s contribution to the tunnel project.
“Our administration is proud to be further progressing the Hudson Tunnel Project, bringing us much closer to revamping and modernizing a key component of our regional commuter and commercial rail infrastructure,” said Murphy spokesman Michael Zhadanovsky, in response to a request for additional comment.
The $10B dig
“Since taking office, the governor has made clear that NJ Transit customers are a top priority,” Zhadanovsky said. In all, the construction of a new trans-Hudson tunnel is now expected to cost an estimated $10.1 billion, according to the new finance plan. Meanwhile, it will cost another $2.2 billion to rehabilitate the existing tunnel used by both NJ Transit and Amtrak, for a total projected cost of $12.3 billion.
The price tag for the tunnel work is up slightly from a year ago, but it remains less than a $12.7 billion projection issued in 2017, the same year Christie and Cuomo announced the finance agreement that called for hiking NJ Transit rider fares to help pay for the project.
In addition to the funds that would come from the turnpike authority, the Port Authority of New York and New Jersey and the state of New York have also promised to make major local contributions to the tunnel project.
New York’s share of the projected cost is roughly $2.3 billion, and the Port Authority’s is $2.2 billion, according to the finance plan. The local investments would be funded initially with federal loans that would eventually be repaid with the monies pledged by New Jersey, New York and the Port Authority, according to the plan.
In addition to the contributions from the local partners, the new finance plan also calls for Amtrak to contribute $1.4 billion.
The tunnel project’s partners are also seeking $5.6 billion from the federal government’s Capital Investment Grant program, according to the finance plan. A decision on that submission could come later this year, officials said.
A long time coming
Construction of the new trans-Hudson tunnel would take 8 1/2 years, under the latest plans. It will take another three years to fully rehabilitate the existing tunnel.
In explaining the role to be played by the New Jersey Turnpike Authority, the new finance plan pointed to the “integrated nature of New Jersey’s and the region’s transportation system” and the “realization that any improvements that facilitate the use of mass transit reduce the capital expense burden on the Turnpike and Parkway to increase road capacity.”
The 133-page document also referred to the turnpike authority’s latest schedule for toll increases and included the potential for additional toll hikes beyond those that went into effect last year.
“Commencing on January 1, 2022, NJTA tolls will increase 3% annually to provide a reliable funding source into the future for both Turnpike and mass-transit projects, such as the HTP,” according to the plan.
Earlier this year, the turnpike authority’s board approved an agreement with the state Department of Treasury that calls for the authority to help subsidize NJ Transit operations over a seven-year term.
A spokesman for the turnpike authority did not respond to requests for comment on funding for the tunnel project, and a spokeswoman for NJ Transit referred all questions about the project to the governor’s office.
Showing its age
Already more than a century old, the existing trans-Hudson rail tunnel was heavily damaged nearly a decade ago when it was inundated with floodwaters during superstorm Sandy.
Though still safe to use, federal officials say it’s becoming increasingly difficult to maintain the tunnel for daily train traffic. Closing just one of the two tubes that carry traffic in and out of New York City for emergency repairs would reduce the number of hourly trips allowed during peak times from 24 to six, officials have said.
“Construction on the Hudson Tunnel Project cannot begin soon enough for the thousands of NJ Transit customers who must continue to rely on the century-old tunnel daily,” said Balpreet Grewal-Virk, who represents New Jersey on the bistate Gateway Commission, in a statement issued late last month.
The new finance plan for the tunnel project cites studies that document the role that rail plays in the broader Northeast Corridor region, which contributes an estimated 20% of the nation’s total gross-domestic product. It also refers to thousands of jobs that would be created in the region during the construction phase.
“The HTP provides long-term resiliency, reliability and redundancy to the regional and national rail network and, in doing so, will provide substantial social, economic and environmental benefits,” according to the finance plan.
State laws passed in both New Jersey and New York call for an even split of the costs of regional infrastructure upgrades under proposals that have been dubbed Gateway by the projects many partners.
While the current plans call for New York to contribute slightly more toward the tunnel project than New Jersey, officials said New Jersey has already committed substantial funding for the replacement of the Portal Bridge, another Gateway infrastructure project. More than a century old and prone to regular breakdowns, the bridge spans the Hackensack River near the Secaucus Junction station.
The tunnel project’s finance plan hearkens back to the way that a prior trans-Hudson tunnel proposal — one that Christie ultimately canceled about a decade ago — was to be funded.
Known as Access to the Region’s Core, or ARC, that proposed tunnel project called for using $1.25 billion in turnpike authority resources to help fund construction costs. At the time, Christie cited concerns about the potential for cost overruns, and the impact they could have on a state budget that was still reeling from the impacts of the 2007-2009 Great Recession. His administration ultimately used the turnpike authority resources to fund other road, bridge and rail projects throughout the state.
A statement issued in support of the new tunnel project by Build Gateway Now, a coalition of unions, planners, business groups and others, referred to delays and overcrowded trains that remain common occurrences for current trans-Hudson commuters.
“To make our region more competitive, resilient and put people back to work following the pandemic, we must seize this opportunity to finally build the nation’s most urgent infrastructure project,” said Brian Fritsch, the coalition’s campaign manager.