Murphy, Cuomo share blame for Gateway funding woes

By Larry Penner, transportation historian and advocate
Great Neck, New York | Mar 19, 2018 at 10:39 am
Op-Ed

Previous governors of New York and New Jersey found billions in hard cash for their local share to obtain Federal Transit Administration New Starts funding for the following projects. These include New Jersey Transit’s Hudson Bergen Light Rail Minimum Operating Segment One ($992 million), Segment Two ($1.2 billion) and Secaucus Transfer ($450 million). The Metropolitan Transportation Authority did the same for Long Island Rail Road East Side Access to Grand Central Terminal ($10.8 billion) and Second Avenue Subway Phase One ($4.5 billion). None of these projects required federal Railroad Rehabilitation and Improvement Financing or Transportation Infrastructure Finance and Improvement Act loans.

The Gateway Tunnel Portal Bridge ($1.6 billion) and Hudson River Tunnel ($11 billion) portions, along with Second Avenue Subway Phase 2 ($6 billion) are currently in the first phase of Federal Transit Administration’s New Starts program known as “Project Development.” This status comes from recent release of the Federal Transit Administration’s FY 2019 New Starts Report. MTA Second Avenue Subway Phase 2 has $1.7 billion in approved local funding within the MTA $32 billion 2015-2019 Five Year Capital Plan. The MTA intends to program an additional $2.3 billion in local funding within the next MTA 2020-2024 Five Year Capital Plan, for a total of $4 billion in local funding. They hope to use these local dollars to leverage $2 billion in future Federal Transit Administration New Starts funding. MTA LIRR has previously provided billions in over match to cover billions in cost overruns for East Side Access. Any Federal Transit Administration Full Funding Grant Agreement requires the recipient to be legally responsible for any additional costs above the agreed upon Full Funding Grant Agreement project cost.

Justification for replacement of the Northeast Corridor Portal Bridge has been discussed since the 1980s. It is really the first phase of the $29 billion Gateway Tunnel project.

The project has been in the development stage since July 2016. Environmental review process was completed in July 2017. The Gateway Development Corp. is seeking entry into the New Starts program’s engineering phase along with approval of a FFGA in 2018. This has yet to take place. The $1.56 billion cost would be comprised of $772 million New Starts, $119 million Federal Highway Administration Congestion Mitigation and Air Quality dollars transferred to FTA and $682 million in local dollars. Completing both final design and engineering along with approval of a FFGA within 12 months appears overly optimistic. This is based upon past history of other New Starts projects. Final design and engineering completion in 2019 with an approved FFGA assuming funding availability in 2020 is more realistic.

Gov. Phil Murphy appears to support New Jersey Transit’s proposal to finance his $1.9 billion initial contribution by attaching a 90 cent “fee” to riders coming to Penn Station starting in 2021, going up to $1.70 in 2028 and $2.20 in 2038. This would be used to pay back their own federal loan. Any proposed fare increase or surcharge would require public hearings, followed by approval of the NJ Transit board of directors. NJ Transit fares have gone up five times, for a total of 30 percent, since 2010. This includes the most recent 9 percent 2015 fare increase. NJ Transit riders pay 50 percent of the cost per ride, which is more than most other transit systems around the nation. These fare increases help pay for operations, including basic service and employee salaries. These proposed “fees” would be on top of other inevitable upcoming fare increases in future years. How many fare increases and “fees” does anyone believe NJ Transit riders will put up with? Using the New Jersey Transportation Trust Fund for financing would make more sense.

Why would the Federal Transit Administration have accepted other federal dollars under its New Starts program local share financing requirements? This would be double-dipping, using FRA funding toward local share to obtain additional dollars from the FTA.

Previous governors found billions in real local dollars to provide real skin in the game today, not over decades. Why can’t current Gov. Murphy of New Jersey and Gov. Andrew Cuomo of New York do the same today?

It should not be that difficult for Cuomo and Murphy, with the assistance of the Port Authority of New York and New Jersey to come up with several billion each toward their local share to begin both the $1.6 billion Portal Bridge and $11 billion Hudson River Tunnel early phases of the overall $29 billion Gateway project. Time to stop crying poverty and man up.

Without real, hard financial resources from up to Washington ($14.6 billion), New Jersey ($7.3 billion) and New York ($7.3 billion) along with some private sector investments, how will the full $29 billion Gateway Tunnel be paid for? A project can’t be financed by borrowing and fare surcharges alone. Washington, Albany and Trenton all share equal blame for the lack of a real $29 billion Gateway Tunnel financing package.

Larry Penner is a transportation historian and advocate who previously worked 31 years for the U.S. Department of Transportation‘s Federal Transit Administration Region 2 New York office. 

ROI-NJ Staff | editorial@roi-nj.com | @ROINJNews