Friday, December 15, 2017

Gateway: Ball is in Trump’s (and Chao’s) court—and they haven’t picked it up

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USDOT Secretary Elaine Chao and President Donald Trump USDOT Secretary Elaine Chao and President Donald Trump

Outgoing New Jersey Gov. Chris Christie and New York State Gov. Andrew Cuomo on Dec. 14 said that have agreed that their states and the Port Authority of New York and New Jersey have agreed to contribute $5.55 billion toward the Gateway Program—50% of the massive project’s cost, and placing responsibility with President Donald Trump and the U.S. Department of Transportation to contribute the remaining half.

So far, Trump and USDOT Secretary Elaine Chao have been noncommittal.

In this most recent iteration, New Jersey’s share is $1.9 billion, New York’s is $1.75 billion, and the PANYNJ’s is $1.9 billion, which the bi-state agency already authorized as part of its long-term capital plan. This is a departure from a prior scenario in which the shares would be split equally.

Cuomo’s Budget Director, Robert Mujica Jr,. said New York State “commits to propose in the State’s executive budget an appropriation each year over a 35-year period to pay debt service on a $1.75 billion fixed-interest loan to the GDC (Gateway Program Development Corp.) with a 35-year term under the USDOT Railroad Rehabilitation & Improvement Financing (RRIF) loan program, which is to be used toward construction of a new tunnel, and use good faith efforts to obtain New York State legislative approval of these appropriations. The State expects to recoup its debt service costs from new infrastructure revenues and offsets.”

However, New York State is currently dealing with a budget crisis, facing a projected $4.4 billion deficit that must be eliminated before Cuomo releases a new budget in January.

NJ Transit customers will be expected foot the cost of New Jersey’s share of the project cost through user charges on trains using the new the tunnels in and out of Manhattan. “Funding to support this commitment will be generated by a new charge on Trans-Hudson rail use,” said NJ Transit Executive Director Steve Santoro. “Specifically, NJ Transit intends to generate the revenue to support $1.9 billion in project design and capital construction costs through a per-passenger trip charge for all NJT rail passenger trips each way across the Hudson River. The estimated per-trip cost to NJT rail customers using the Trans-Hudson tunnels will be $.90 beginning in 2020 and increase to $1.70 in 2028 and $2.20 in 2038.”

Gov.-elect Phil Murphy, who takes office Jan. 16, said he will not honor Christie’s commitment, pointing to how Christie began his governorship by cancelling a prior project, the ARC (Access to the Region’s Core) rail tunnel, also called THE (Trans-Hudson Express) Tunnel, as well as “The Tunnel to Macy’s Basement” by critics. “It set us back at least a decade, and many billions of dollars,” said Murphy. “And now it seems we’re going to have to pay for that gap by further raising fares on commuters. When I am sworn in as governor, we will review the application and see if there’s any way to provide additional relief to our commuters, and if there is, we will pursue it.”

Trump and the UDSDOT are expected to release a $1 trillion federal infrastructure plan early in 2018. They have been obtuse about funding the 50% federal share of Gateway, to which former President Barack Obama had committed. On this latest proposal, “This is not a serious plan at all … It is also important that we clarify that there is no DOT match,” a USDOT spokesperson told NJTV Senior Correspondent Brenda Flanagan. “The much discussed ‘50/50’ agreement between USDOT, New York, and New Jersey is mythical. There is no such agreement.

Interestingly, in the recent past, Senate Majority Leader Mitch McConnell, who is married to Chao, has called Trump’s infrastructure proposal a “non-starter.” And with the federal deficit expected to increase under the income tax overhaul currently being hashed out in Congress, skeptics believe Trump’s infrastructure plan is also mythical.

U.S. Sen. Chuck Schumer (D-N.Y.), the Senate Minority Leader, along with Sens. Cory Booker (D-N.J.) Kirsten Gillibrand ((D-N.Y.) and Robert Menendez (D-N.J.), have responded to Trump’s refusal to provide a clear answer on Gateway by purposely holding up Senate confirmation of career railroader Ron Batory as Federal Railroad Administrator.

Until Schumer relinquishes his political chess pieces, Batory is serving as a special advisor on railroad matters to USDOT Secretary Elaine Chao.

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