The Ghost of ARC Continues to Haunt

The consequences of the ARC cancelation continue to reverberate in NJ on the state and federal levels – almost five months since the project was canceled.

On Wednesday, NJ’s congressional delegation — republicans and democrats — delivered a unanimous letter to Transportation Secretary Ray La Hood, requesting that the federal government drop their demands for repayment of the ARC Tunnel money. The logic of their request is that the federal funding can be re-used in the future. The letter states:

“While some of us may differ on whether or not the ARC project should have been cancelled, we are united in our effort to protect New Jersey taxpayers from harm. We are deeply concerned that forcing New Jersey to pay these funds will undermine efforts for a new Trans-Hudson tunnel, and require the State to postpone or cancel other essential, job-creating transit projects throughout the State. This will only exacerbate the State’s transportation and economic challenges, and impose an unfair burden on taxpayers in New Jersey.”

This bi-partisan effort is the most recent of a series of steps by lawmakers to remove the bill. Since October, Christie has been waging a legal fight against the bill. Meanwhile, in December, NJ Senators Frank Lautenberg and Robert Menendez successfully negotiated with La Hood to effectively cut the $271M bill in half. As part of the deal, NJ would re-pay the bill in full, while La Hood would provide a $128M credit to the state for future transportation projects. Christie did not take up the offer. Now, with the Gateway Tunnel  on the table and Obama’s infrastructure plan the center of a fight between republicans and democrats, La Hood may need to heed this letter to ensure the support of the NJ delegation.

While the federal legislators have exhibited an uncharacteristic bi-partisanship, state lawmakers have shown less cooperation. On Thursday, the NJ Senate voted to cancel planned toll increases that were meant to fund the ARC Tunnel. NJ Democrats are using Christie’s own anti-tax argument against him. Christie has repeatedly declared that there be no new taxes for NJ residents. If the tunnel project is canceled, the Democrats’ logic goes, then the associated tax should be canceled as well.

Without the toll revenue, NJ will have to find an alternative way to fund the depleted Transportation Trust Fund, which Christie had planned to support using the tolls. With the margin of victory in the Senate so high (27-9), an over-ride of any veto seems very possible. If the repeal goes through, Christie may be forced to raise the gas tax — a move he has repeatedly refused to make. Before Christie can sign or veto, the bill will have to be voted on by the Assembly, also controlled by Democrats.

Despite targeting Christie, the bill wasn’t without Republican support. Seven republican senators voted for the toll repeal. On the other side of the aisle, only one democrat, Senator Ray Lesniak (D) voted against the repeal.  Unlike his fellow democrats, he had a constructive idea for the toll revenues: re-direct the funds to the Gateway Tunnel.

Although Lesniak’s plan would provide the biggest benefit for trans-hudson capacity, his proposal is pre-mature. Relatively little is known about the Gateway Project and its funding mechanisms are likely a year or two away. Furthermore, it remains in the states’s best interest to wait for the federal government to firmly articulate its plans for High-Speed Rail before committing any funding.


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