The multi-billion-dollar plan to build a second rail tunnel under the Hudson River and fix the deteriorating existing one has hit another setback after President Donald Trump’s administration said on Friday it would not fund half of the project. As Crain’s first reported, the Federal Transit Administration wrote a letter to Govs. Andrew Cuomo and Chris Christie in response to their revised plan to fund $5.5 billion of the $12.7 billion project. A top FTA official said the administration would not recognize the prior deal made between President Barack Obama and the states, calling it “a non-existent ’50/50′ agreement between USDOT, New York, and New Jersey.”
In 2015, the Obama administration agreed to split the cost with the two governors. Earlier this month, New York committed $1.75 billion, NJ Transit committed $1.9 billion and the Port Authority said it will fund $1.9 billion, for a combined $5.5 billion. Fixing the tunnel would cost about $12.7 billion, which falls under the $24 billion Gateway Program that includes a Penn Station expansion and new bridges.
FTA Deputy Administrator K. Jane Williams said “there is no such agreement” for the federal government to fund the other half. “We consider it unhelpful to reference a non-existent ‘agreement’ rather than directly address the responsibility for funding a local project where nine out of 10 passengers are local transit riders,” Williams wrote.
The tunnel project, aimed at better connecting New York and New Jersey, is considered one of the most crucial infrastructure plans in the nation. The economy of the region provides hundreds of billions of tax dollars to Washington each year.
Cuomo’s office responded Sunday to the federal government’s refusal to recognize the agreement. The state’s budget director, Robert Mujica, wrote to Williams and referenced a meeting among the governors, Senators Chuck Schumer, Cory Booker, Kirsten Gillibrand and Rep. Peter King and Trump back in September.
“USDOT stepping away from the 50:50 framework now would represent stepping away from a previously agreed upon path and the entire basis for getting this critical national infrastructure project done,” Robert Mujica wrote, according to Crain’s.
The FTA dismissed Mujica’s letter: “There has been no 50/50 agreement, as has been stated on multiple occasions to the project sponsors. New York and New Jersey have not stepped up in a serious way to fund this local project.”
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