The Trump administration last week killed plans for the federal government to pay for half of the cost of a new tunnel connecting New Jersey to Penn Station. Back in 2015, the Obama administration had reached and agreement with the governors of New Jersey and New York to split the costs of a new Amtrak tunnel for the busiest transit hub in the United States.
Leaders from both states recently proposed to fund their obligations with federal loans through the federal Railroad Rehabilitation and Improvement Financing program, and were told in a letter last week, obtained by Crain’s New York Business, that the agreement was non-existent.
“Your letter also references a non-existent ’50/50′ agreement between USDOT, New York, and New Jersey. There is no such agreement,” wrote Federal Transit Administration Deputy Administrator K. Jane Williams. “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.”
Administration officials also told Crain’s that the federal government would not allow New Jersey and New York to borrow federal money for the project.
The $13 billion project includes a new tube under the Hudson River, repairs to the existing tunnel conduit and the reconstruction of New Jersey’s Portal Bridge. Business leaders in New York and New Jersey have stressed the importance of the project and its impact on the future of the regional economy.
New Jersey Gov. Chris Christie killed an earlier effort to build a second train tunnel, to the chagrin of many business leaders and commuters, and federal funds that had been set aside for the project were then redirected to other states.