Rocky Road to Gateway

We need a new Hudson River tunnel. But who will pay?

Commuters at New York's Penn Station endure frequent delays because of problems with Amtrak's century-old tunnel.
Commuters at New York's Penn Station endure frequent delays because of problems with Amtrak's century-old tunnel.
Photo by Andrew Burton/Getty Images

Everyone seems to agree that a new tunnel needs to be built under the Hudson River between New York and New Jersey. But can we come up with the estimated $15 billion to $20 billion to pay for the proposed Gateway Project, which includes the construction of a new, two-track Hudson River tunnel? That remains to be seen.

In 2010, Governor Chris Christie nixed a trans-Hudson tunnel project, claiming that the plan, called Access to the Region’s Core (ARC), would have put an undue burden on the citizens of New Jersey. He felt that New York, which will also benefit from any tunnel project, should have some skin in the game.

The good news is that New York seems ready to come to the table. But New York and New Jersey can’t build Gateway alone. They need federal money to make the tunnel project a reality.

Federal funding will require authorization from Congress, explains Martin Robins, a former director of ARC and founding director of the Voorhees Transportation Center at Rutgers University. And that’s not easy. “Since there isn’t a program currently in Congress to provide such funding,” says Robins, “it will have to be developed from scratch.”

A mid-August meeting involving Christie, New Jersey senators Bob Menendez and Cory Booker, U.S. Transportation Secretary Anthony Foxx and representatives of New York governor Andrew Cuomo indicated some momentum for the tunnel project.

“The state of New Jersey supports the Gateway project and is committed to developing a framework with the federal government to begin it,” Christie, Booker and Menendez said in a joint statement after the meeting. “We all recognize that the only way forward is equitable distribution of funding responsibility and the active participation of all parties. As commuters can attest, we cannot afford further delay.”

Cuomo, whose absence from the meeting was not insignificant, said after the gathering that he was “excited by the dialogue.”
But where do we go from here?

“If you ask the feds, they have said they will not ask for Congress to get involved until they have commitment from the states,” says Robins. “But the states say they won’t do anything until they know what is coming from the federal government. A stalemate could occur.”

Amtrak, which owns the existing tunnel, is requesting the feds pick up 80 percent of the tab for a new one. However, recent reports indicate Congress won’t contribute more than 50 percent. That would leave at least $7.5 billion for New York and New Jersey to cover.

“Regardless of the number, New Jersey will have to figure out how to pay its share,” says Robins. Typically, New Jersey turns to its Transportation Trust Fund (TTF) for such infrastructure projects. But, says Robins, the fund is insufficient. “No one has talked about a TTF number that is large enough to cover New Jersey’s share of Gateway as well as the state’s other backlogged transportation capital needs,” he says.

The answer could come in the form of low-cost, long-term federal loans. “We are talking about projects that have a useful life of 50 to 100 years or even more,” says Robins. “Bonding for a loan like this would be most appropriate.”

The need is greater than ever. Amtrak’s existing tunnel is more than 100 years old and was severely damaged by Superstorm Sandy. To get a new one built, our leaders must show a willingness to be flexible. We need to be thinking about getting people to and from work and about delivering goods and services on time. If the Gateway Project falls through, no amount of finger pointing will alleviate the human and economic pain that will follow.

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