The Hudson River tunnel project, which was started in 2009, then killed, then revived, now has been killed again by the Trump Administration, at least according to an article in Crain’s business journal. It would be more accurate to say that Trump’s Department of Transportation has challenged the project’s financing plan.
Originally projected to cost $2.5 billion, the project to replace tunnels used by Amtrak’s Northeast Corridor trains was killed by New Jersey Governor Christie when it inflated to $8.7 billion. The resurrected project is projected to cost $20.0 billion yet now has Christie’s support, probably because he doesn’t expect New Jersey to have to pay for much, if any, of it.
Most federally supported transit projects are funded on a 50/50 plan, where the federal government pays up to 50 percent of the cost of the project while state and local government pay the rest. The states of New York and New Jersey had agreed to a 50/50 plan for the Gateway project (as the Hudson River tunnel project is now known): 50 percent paid for with federal grants and 50 percent with federal loans.
In response, Jane Williams, deputy administrator of the Federal Transit Administration, closed out 2017 by sending a scathing letter to the state of New York. She noted that a previous plan called for the states to put up 17 percent of the costs in cash, so this new plan “is a move towards even greater federal dependency.” Williams also criticizes the states for claiming there is a “50/50 agreement” on the plan. “There is no such agreement,” she said, at least none agreed to by the federal DOT.
Theoretically, even under this 50/50 plan, half the money would come from the states that would be responsible for repaying the loans. But the DOT is fully aware that states can play shell games, getting federal grants for projects that should be funded locally so they can use the local funds to repay federal loans. For this reason, the Federal Transit Administration has always had a policy that federal loans and other federal founds could not count towards the 50 percent state-and-local cost share.
Behind this is a power play of a different sort. New York Senator Chuck Schumer, who thought fellow New Yorker Trump might be his friend, discovered that he wasn’t. So Schumer has been holding appointments to the Department of Transportation hostage to getting funds for the Gateway Project. That’s probably why Trump hasn’t even nominated someone to head the Federal Transit Administrations and other key DOT posts.
So this letter is the administration’s response: “We don’t need an FTA administrator to kill your stupidly expensive project. We can do it with just actings and deputies.”
Ordinarily, a deputy administrator might hesitate to take on the entire New York and New Jersey congressional delegations. But New York City has been getting some particularly bad press for the way it handles transit operations and construction. Just the day before Williams’ letter went out, the New York Times reported that another city project had become the most expensive subway in the world, namely, the 3.5-mile East Side Access line, which was costing $3.5 billion a mile.
This high cost was largely due, the Times insinuated, to corruption and mismanagement. For example, the paper noted that the city was paying 900 workers $1,000 a day on part of the subway project even though it had jobs for only 700 of those workers. The Times didn’t even comment on whether $1,000 a day was appropriate pay for construction workers.
Just four years ago, the East Side Access line was projected to cost “just” $2.0 billion per mile. If the Gateway Project undergoes a similar overrun, it will cost $35 billion.
The greater New York urban area is the one place in America where commuter trains are heavily used. Although the Hudson River tunnels are part of Amtrak’s Northeast Corridor, 90 percent of the passengers riding trains through those tunnels are New Jersey Transit commuters. To justify spending $20 billion on the project, planners project that the number of commuters will double as Manhattan jobs grow by 500,000.
But why should Manhattan jobs grow so much? And why should federal taxpayers subsidize that growth? With two million jobs today in about seven square miles, Lower and Midtown Manhattan is by far the greatest job concentration in North America. Admittedly, there are some benefits to locating certain kinds of jobs close enough for people to have face-to-face meetings, but who really benefits from cramming another half million jobs into this one small area, and why shouldn’t they be the ones to pay for this project?
Besides, as they Antiplanner has previously noted, these aren’t the only rail tunnels under the Hudson River. While the Northeast Corridor tunnels are currently used to capacity, two more sets of tunnels are not. The Downtown Tubes go to the World Trade Center, which is ideal for many commuters, while the Uptown Tubes (which really should be called the Midtown Tubes) cross south of Penn Station but then travel north up the island to Penn Station. Currently used by Port Authority trains, both tubes meet the Northeast Corridor in Newark, so with relatively minor modifications they could be used by New Jersey Transit trains, taking pressure off of the Northeast Corridor tunnels.
In any case, it is likely that the Hudson Tunnels will be the subject of more power plays in the near future. If the Trump administration can delay them long enough, they might even prove to be unnecessary.