The greatest threat to New Jersey Gov. Chris Christie’s political future may be
“Bridgegate,”
the unfolding scandal centered on evidence that his staff engineered a
massive traffic jam as an act of political retribution. But Christie’s
constituents could face longer term consequences from another
transit-centered controversy from the governor’s first term.
In 2010, Christie decided to kill a project called Access to the
Region’s Core, a years-in-the-making effort to build a new rail tunnel
from New Jersey to New York City. Proponents of the project say it could
have
created as many as 44,000 jobs in and around the state and
hiked local property values by up to $18 billion. A
recent report [PDF]
from the office of New York Governor Andrew Cuomo even suggests that an
additional tunnel under the Hudson River connecting New Jersey and New
York could make regional infrastructure more resilient in the face of
disasters like Hurricane Sandy.
Up With Steve Kornacki, 1/26/14, 10:34 AM ET
“Going back to when I first started in 1996, people always talked
about the need to have a trans-Hudson tunnel for rail service built, but
it was spoken of in almost mythic proportions,” Assemblyman John
Wisniewski, a Democrat and fervent critic of the Christie
administration, told msnbc. State officials spent years trying to get
the project up and running.
“Then it actually got legs, got moving, and ground was broken, which
was incredible,” said Wisniewski. “And even better, there was a huge
allocation of federal money.”
Yet Gov. Christie abruptly
scrapped the project
during his first year in office. In doing so, he willingly gave up $3
billion in promised federal assistance, infuriated a local senator, and
provoked the federal Department of Transportation to demand some of its
money back. More importantly, critics say Christie may have stunted his
state’s economic development in such a way that it could take decades to
recover.
“I have a lot of bitterness about this. I think that the future of
our state has been very, very seriously compromised,” said Martin
Robins, director emeritus of Rutgers University’s Alan M. Vorhees
Transportation Center and original director of the ARC project.
So why did Christie kill the new tunnel? Ostensibly, he was
worried about cost overruns; but an independent inquiry by Congress’
investigative arm found no evidence of the massive price inflation which
Christie predicted. To many many of the governor’s critics, the death
of the ARC tunnel looks more like a political ploy, crafted to boost his
reputation and pocket billions of dollars in construction funds at the
expense of New Jersey’s transit system and economic well-being.
The two men who allegedly led this effort at the Port Authority
are David Wildstein and Bill Baroni—both of whom have subsequently been caught up in the Bridgegate scandal.
On September 10, 2010—less than nine months into his first
term—Christie ordered a month-long pause in new ARC expenditures, during
which time the ARC Executive Steering Committee would compile a report
on the projected cost of construction, originally pegged at $8.7
billion. On October 7, the committee issued a memorandum projecting that
the total cost of the project “is likely to top $11 billion and could
exceed $14 billion.”
Christie promptly
announced the cancellation of the project, citing the state’s strained finances in the wake of the recession.
“I have made a pledge to the people of New Jersey that on my
watch I will not allow taxpayers to fund projects that run over budget
with no clear way of how these costs will be paid for,” he said in a
statement. “Considering the unprecedented fiscal and economic climate
our State is facing, it is completely unthinkable to borrow more money
and leave taxpayers responsible for billions in cost overruns. The ARC
project costs far more than New Jersey taxpayers can afford and the only
prudent move is to end this project.”
Officials in the federal Department of Transportation (DOT) were reportedly
appalled.
Transportation Secretary Ray LaHood had committed $3 billion to the
project, hundreds of millions of which had already been spent. Now,
after a decade and a half of work and planning, Christie had decided to
shut down the project in the space of a month.
Up With Steve Kornacki, 1/26/14, 10:33 AM ET
LaHood rushed to Trenton, where he persuaded Gov. Christie to
delay cancellation of the project for two weeks. In the meantime, members of DOT and NJ Transit would work together to try and keep it afloat.
Over the course of those two weeks, DOT
offered concession after concession, according to local press: “
a
federal loan, the use of private financing and an offer to split the
cost of $1.1 billion in overruns with the state and the Port Authority
of New York and New Jersey.” But none of those options satified
Christie, who again killed the project on October 27. Robins
said he believes that Christie was always going to cancel the ARC
project, regardless of the outcome of the review and DOT negotiations.
“I know that the staff at NJ Transit was beside themselves,” he told msnbc. “They were not listened to.”
A spokesperson for NJ Transit declined to comment for this article. A
former NJ Transit employee who was present at the time of the review
said that he had signed a non-disclosure agreement, but added that he
had “a lot of feelings” about the process.
Evidently, the late Sen. Frank Lautenberg, D-N.J., also had a
lot of feelings. In a blistering statement to the press, he accused
Christie of making “the biggest policy blunder in New Jersey’s history.”
“The Governor has put politics before performance, and it is the people of New Jersey who will pay the high price,” he said.
Christie stood firm, insisting that the
“long-term fiscal health” of New Jersey was
at stake. While critics were more than a little skeptical, it wasn’t
until 2012 that independent investigators released a comprehensive
fact-check of that claim. In April of that year, the nonpartisan
Government Accountability Office (GAO) released the findings of
a thirteen month investigation into the ARC tunnel cancellation.
Their conclusion: As of October 2010, estimates for how much the ARC
project would cost ranged from $9.78 to, at most, $12.43 billion. And
whereas Christie had said that the state of New Jersey would be on the
hook for 70% of the total cost, the GAO found that the real number was
closer to 14%.
Meanwhile, the project cancellation did not exactly come free. An
incensed LaHood, who declined to comment for this article, demanded that
New Jersey
return the $271 million
which the federal government had already poured into the project.
Christie refused, and hired the law firm Patton Boggs to negotiate a
settlement with DOT. Ultimately, New Jersey only had to return $95
million—plus
over $1 million in legal fees for Patton Boggs. The law firm—which now represents Christie’s reelection campaign and the New Jersey Republican State Committee in
the Department of Justice’s Bridgegate investigation—did not return a request for comment, and Christie spokespeople did not respond to multiple requests for comment.
Despite all the fallout from the ARC project cancellation, New Jersey
voters did not punish Christie. In fact, support for his decision to
kill the project grew in hindsight, from
51% in October 2010 to 56% two months later.
“My guess is, he was appealing to people’s basic instinct that
government is too big, inefficient, bloated, and just wastes their
money,” said msnbc’s Steve Kornacki, a close observer of New Jersey
politics. “I think any time you dangle a price tag around these big
public works projects, you can get people going in that direction.”
The cancellation may have also been an attempt to establish
Christie’s fiscally conservative bona fides with the national Republican
base.
“If you look at the time of it, Christie was having that big year
with [cutting] pensions, going after teachers’ unions, making a series
of plays that were translating really well on the Republican national
stage,” said Kornacki.
That’s where Wildstein and Baroni, Christie’s men at the Port
Authority, come in. Killing the tunnel had freed up some $1.8 billion
which the Port Authority had pledged towards the project. And while that
agency was established to serve both New York and New Jersey, the ARC
funds all wound up going to infrastructure upgrades inside the latter
state. In January 2011, Christie announced that the $1.8 billion would
go towards upgrading crumbling New Jersey roads, including the historic Pulaski Skyway.
Such projects are supposed to be paid for out of the New Jersey Transportation Trust Fund, but the trust fund had been
hovering near bankruptcy
for years. Even now, all of the fund’s income goes towards financing
debt, said the Tri-State Transportation Campaign’s Veronica Vanterpol.
“The Transportation Trust Fund was meant to be a sustainable vehicle
for funding these projects, and that was created in 1984,” she said.
“The problem is that one of the main revenue sources, which is the
state’s gas tax, has not kept up with inflation even though the
transportation needs of the state have grown.”
Christie had pledged during his first gubernatorial campaign that
would not raise New Jersey’s gas tax
under any circumstances. That meant the only way he could pay for
upgrading infrastructure was by issuing more debt and raiding the Port
Authority’s ARC tunnel funds. According to a recent report from
investigative journalist Andrea Bernstein,
that may have been the plan all along.
“According to documents and interviews with more than a dozen
top-level sources, the governor made clear from the get-go that the
agency would be the source of cash for New Jersey’s hard-up
infrastructure budget,” writes Bernstein. “And he and his team proceeded
to wrangle billions from the bi-state authority to further his
political goals—much of that for projects that had never been under the
Port Authority’s jurisdiction before.”
Wildstein and Baroni allegedly worked within the Port Authority
to kill the tunnel project so they could redirect the money toward New
Jersey road projects.
Although the ARC project may be dead and buried, New Jersey may still
eventually get its second rail tunnel to New York. Last May, the
Department of Transportation offered New York $185 million for
a project known as Gateway,
which would serve the same needs as ARC. But the project is still not
fully funded, and it could be years before construction begins.
Meanwhile, the Port Authority’s $1.8 billion is set to run out in
2016, leaving the New Jersey Transportation Trust Fund in much the same
shape it was before.
“From a transportation perspective, it’s been a total and complete
disaster, and I think we’re going to suffer probably for the rest of my
life,” said Robins. “People my age will have to live with Christie’s
decisions.”
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