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How Chris Christie Gave NJ Taxpayers a $271 Million Bill (Plus Interest)

How Chris Christie Gave NJ Taxpayers a $271 Million Bill (Plus Interest)

While New Jersey governor Chris Christie was collecting accolades for his talk about ending teacher tenure, limiting the power of teachers’ unions, and more to faculty and students at Harvard University’d School of Education, US transportation secretary Ray LaHood was letting New Jersey know that the state owes the federal government $271 million for the cancelled Hudson Tunnel project. Declaring that costs to build the railroad tunnel were running far higher than estimated, Christie cancelled the project last October and hired Patton Boggs, a Washington, D.C., law firm to clear the state of its debt obligations, to the tune of $800,000 so far.

In other words, not only do New Jerseyans have to continue to trudge to work on severely overcrowded and overtaxed trains, but we have to pay back a bundle to the government including interest on the debt. As the federal government currently charges interest at a rate of 1 percent a year, thanks to a decision made by a governor who’s been styling himself as Mr. “We Gotta Exercise Fiscal Conservatism,” the debt will be more than $50,000 a week.

In a letter to New Jersey’s senators and representatives in Congress, LaHood wrote that “‘the law was clear” that New Jersey had only received federal funding that would total $3 billion on the condition that it finish the project. Says the Star-Ledger:

“After the initial contract was entered into and later expanded at Governor Christie’s request, the state of New Jersey broke the terms,” LaHood said. “The governor’s unfortunate decision will affect the commuters in New Jersey and the entire Northeast region for generations.”

Christie’s office said it disagreed with LaHood’s conclusion but had not decided how to respond or whether it would appeal.

But LaHood has said New Jersey has no options left, and that the Department of Transportation has “many ways to extract the money, including withholding a wide range of federal funds.”

According to the New York Times, the tunnel was projected to cost $8.7 billion, with the Port Authority of New York and New Jersey committing $3 billion more on top of federal funding. The Star-Ledger describes the dispute which began last fall when Christie said he just didn’t know the tunnel would cost so much:

Launched under Gov. Jon S. Corzine with the support of Democrats and Republicans as well as labor unions, Christie abandoned the tunnel — known as ARC for Access to the Region’s Core — in October after initially expressing his support for the project.

He said it was only then that he had learned the state would be liable for $2.5 billion in cost overruns on top of the $8.7 billion price tag.

“New Jersey was unable to move forward with the ARC project for reasons beyond the state’s control,” [governor spokesman Kevin] Roberts said today. “Billions of dollars in unaccounted-for cost overruns and re-estimates of project costs late in the process only continued to increase New Jersey’s already heavy financial burden.”

But LaHood wrote in the letter, which was sent to U.S. Sen. Frank Lautenberg, that state officials were well aware in August 2008 — before Christie became governor in January 2010 — that costs could grow to as much as $12 billion.

“Any notion that the potential for cost growth constituted new and emergent information when the governor made his decision is simply not accurate,” he wrote.

Roberts declined to comment about whether the governor knew about the higher cost projections in 2008. 
I guess Christie should have done his homework better.

 

 

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Photo by Hoboken Condos.

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61 comments

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11:28AM PST on Dec 29, 2012

Thank you for sharing.

2:03PM PDT on Jul 5, 2011

This man wants to be President. Watch out world.

7:17AM PDT on May 28, 2011

Judy K,

Does a bear poop in the woods?

5:36AM PDT on May 6, 2011

IS GOV.CHRISTIE A REPUBLICAN ?

8:39AM PDT on May 5, 2011

makes you wonder.....

6:32AM PDT on May 4, 2011

Why are people shocked at this? Gov. Christie is just operating under his MO

10:09AM PDT on May 2, 2011

Nice going, Gov. Talking the talk but not walking the walk. Too busy talking trash about the inadequacies of others -- a typical Republican't strategy is belittling opponents or those who propose different strategies -- that he forgot or neglected to factor in that it sometimes takes money to make or save money. Billions out of the state treasury now in upfront costs, but tens of billions back over ensuing years in saved time and productivity, and more tax revenue when more workers are willing and able to work in NY metro because of more reliable transportation. Furthermore, if/when some fiscal balance is restored, and a NJ governor and the Port Authority agree to restart the program, as they must -- costs will have risen or spiked, and the urgency will be all the greater as they already frayed rails and infrastructure will need that much more engineering to be made ready. Christie declines to invest in NJ so he can get a head start on his campaign as a fiscal hawk -- but that frugality is not evident in his approval of the revival and rehab of Xanadu, a $1 billion+ behemoth in the Meadowlands, replete with shopping mall and ski slope -- certainly facilities that metro rail riders need to be gainfully employed taxpayers.

9:47AM PDT on May 2, 2011

Tana I believe in protesting and would love to but between my two jobs and family the only time I have available is after midnight. There are a lot of people who can't afford to get arrested at a protest because their families are barely holding on as it is. To all those saying NJ got what it deserves, there are plenty of people in NJ who didn't vote for Christie (I sure didn't) and are suffering under his reign. He isn't willing to compromise at all and doesn't care about who gets screwed in the process he is the worst.

11:57PM PDT on May 1, 2011

Is this the same repug who was talking to taking a bat to another politician ?

11:56PM PDT on May 1, 2011

Vote repug and vote your own demise.

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Kristina Chew Kristina Chew teaches and writes about ancient Greek and Latin and is Online Advocacy and Marketing... more
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