DOT Threatens Hudson River Tunnel

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.

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18 thoughts on “DOT Threatens Hudson River Tunnel

  1. prk166

    Thank for sorting out some of these things in one spot.

    The Trump administration’s move is clearly a step toward fairness and equity.

    For those who haven’t read the New York Times piece, please do so. And keep in mind this is a newspaper these days that has no qualms with journalism as a team sport. Think of how bad the management of the subway and the MTA things would need to be get the gray lady to step up and complain about the mess!

  2. JOHN1000

    Great news. The NY Times criticizes NY CITY subway tunnel corruption. Of course, the Times doesn’t say that all the politicians and assorted groups who have plundered NY have all been supported by the Times forever.

    Not so good news. The Times article holds out the DC Metro expansions as being well done and the way to go. Nowhere in the article do they question to propriety of building new lines when you can’t pay for maintaining the old ones.

    If the Times publishers have any moral conscience, their headlines will champion Trump stopping the Hudson tunnels. Very unlikely.

  3. C. P. Zilliacus

    I suspect that the the Gateway project is needed regardless of what may happen in the future (much like New York City and nearby environs are places where rail transit makes some sense). What percentage of this project should be funded with federal dollars? I cannot answer that.

    But I would think the Port Authority of New York and New Jersey (which collects hefty tolls on rubber tire traffic between North Jersey and New York City) should be funding some part of this project.

    The Antiplanner wrote:

    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.

    Isn’t Christie out of office now?

    The project mentioned above by Antiplanner (in my quote) made little sense to me. It was not about serving Amtrak trains at all (this was pre-Hurricane Sandy), except that some of the N.J. Transit trains would have their own crossing into Penn Station. But it was a dead-end for N.J. Transit commuter trains only, and would not have provided track capacity for Amtrak trains to run on.

    The newer project being discussed by the Antiplanner posting was for two added tubes (which would serve Amtrak and N.J. Transit trains) and allows the existing tubes to be taken out of service for badly-needed repair and rehabilitation work. The trouble-prone Portal Bridge in North Jersey would also be replaced as part of this effort.

    Send lots of money.

  4. prk166


    I suspect that the the Gateway project is needed regardless of what may happen in the future (much like New York City and nearby environs are places where rail transit makes some sense). What percentage of this project should be funded with federal dollars? I cannot answer that.
    ” ~C. P. Zilliacus

    But we can —> None. How is that? We look at the “needed for whom” aspect. The reality is that the value of NYC to the US is symbolic. The financial markets are digitized and the financial jobs have long been migrating to places like Charlotte, Denver and Minneapolis. There’s no strategic need for the US to cram all that stuff into lower end of Long Island. Heck, there’s not even a long term need for the region to do it.

    This is the opportunity to let nature take it’s course. Let those who value living off the island and traveling onto it and vice versa pay for it directly. If not enough value that highly enough, let the new tunnel go unbuilt.

  5. Sketter

    The fact that NY and New Jersey pay way more into the federal government then they receive back is more reason enough why the feds should help pay for this project. Until we have a devolution of states where every state pays the same per capita into the federal government then they get back I have zero issue with the federal government unbalancing these funding discrepancies by paying for projects in these donor states.

    In 2016 New York sent an estimated $40.9 billion more in tax payments to Washington than it received back in federal spending and New Jersey sent $27.5 billion more in taxes to Washington than it received.

  6. LazyReader

    @ the highwayman
    Seriously….do you have repeat that stuff Polly.
    Yes roads don’t generate net income. So what, they’re the preferred choice of transportation for just about everybody….and most of our roads are local, not federal. There are 3 million miles of roads in America only about 47,000 miles are interstate and fall under the guise of federal funding….
    Roads have been around since ancient times….first ones were dirt, then rocks, then gravel, compacted dirt, cobblestone, bricks and now asphalt and concrete.

    2nd stop using that word socialism. Socialism is not the proliferation or being bequeathed with a given service. We have public post offices and libraries, etc. Socialism is a politically maintained economic system where by the means of production and given resources are handled/owned by the state; and the private acquisition or utilization is either curtailed or prohibited….last I checked private libraries or roads were not illegal. 3rd the financial efficiency of roads is superior to passenger rails. One of the more common arguments that has worked its way around the country is that roads, public services, and schools are socialism. This argument is created in an attempt to slap capitalists in the face and make them realize that they do indeed appreciate the things that socialism has established for them in their day-to-day life including the things that they utilize in their capitalistic enterprises like roads if they run a transportation or freight business. A road is a public good. An item whose consumption is not decided by the individual consumer but by the society as a whole, and which is financed by taxation. A public good (or service) may be consumed without reducing the amount available for others, and cannot be withheld from those who do not pay for it. Public goods (and services) include economic statistics and other information, law enforcement, national defense, parks, and other things for the use and benefit of all. No market exists for such goods, and they are provided to everyone by governments.

    public goods do not qualify as ‘socialism’. First, they typically do not generate wealth; there may be nominal user fees for such things as the post office, but these are not as much wealth generators as they are upkeep fees. The government does not create wealth based on the use of roads, police officers, or public libraries. There is no market for such goods. Even though the government oversees the means of production, it does not control the means; the government has not taken over the factories that produce concrete or asphalt or streetlights or street signs. The contract the company to produce such things. even though the government oversees the means of production, it does not control the means; the government has not taken over the factories, the companies that help to build and produce public goods. It’s also ironic that socialist countries..also build pretty comprehensive road systems even if they discourage automobile usage or ownership, if for no other reason to put people to work.

  7. the highwayman

    I’m not saying that there shouldn’t be roads, but you’re saying that there shouldn’t be railroads. The political deck is loaded. Why expect one mode to be profitable and another one not? :$

  8. C. P. Zilliacus

    prk166 wrote:

    But we can —> None. How is that? We look at the “needed for whom” aspect. The reality is that the value of NYC to the US is symbolic. The financial markets are digitized and the financial jobs have long been migrating to places like Charlotte, Denver and Minneapolis. There’s no strategic need for the US to cram all that stuff into lower end of Long Island. Heck, there’s not even a long term need for the region to do it.

    That may be, though understand I don’t really care who “whom” is – but I am not especially good at predicting the future, and I suspect that even with lots of people leaving New York City, New York County (Manhattan) remains a place of national significance.

    Note that I am even more skeptical of claims of massive future patronage of most rail transit projects, as others have documented (example here), but this line already carries a lot of persons every day. Would the world stop spinning if the Portal Bridge and the tubes under the Hudson River had to shut-down? Presumably not, though I think the politics of that could get pretty ugly.

    This is the opportunity to let nature take it’s course. Let those who value living off the island and traveling onto it and vice versa pay for it directly. If not enough value that highly enough, let the new tunnel go unbuilt.

    One little problem with that argument. This proposed project crosses a boundary between two states. In other words, it is an interstate (little “i”) project. Interstate travel is something that is appropriately legitimate for federal funding. Please note that I am not automatically in favor of passenger-carrying rail projects, as many (most?) of them are massive wastes of federal tax dollars, especially intrastate projects. And I am not automatically opposed to or in favor of this (or other) Northeast Corridor improvements.

  9. CapitalistRoader

    But why should Manhattan jobs grow so much? And why should federal taxpayers subsidize that growth?

    According to Bloomberg, it won’t:

    The South Will Rise Again Under GOP Tax Plan
    Florida and Texas will become the new centers of finance and innovation.

    Sketter:
    Until we have a devolution of states where every state pays the same per capita into the federal government then they get back I have zero issue with the federal government unbalancing these funding discrepancies by paying for projects in these donor states.

    Repeal the 16th Amendment? I’d be all for that!

    Using these data for federal dollars spent in each state per dollar in tax revenue collected, it looks like Delaware, Minnesota, and Nebraska are the top donor states while Mississippi, New Mexico, and West Virginia are the top taker states.

  10. LazyReader

    If a sidewalk cracks or crumbles….you’ll live to tell your kids you walked on a broken sidewalk that can fixed for the price of a bag of cement. Where as the rail if cracked you’re looking at a another train disaster

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