New Jersey Stiffs U.S. Taxpayers over $271 Million Grant. Republicans, Democrats Collude on Cancelled ARC Tunnel

The Republican governor of New Jersey, Chris Christie, is guilty of bilking U.S. taxpayers out of most of the $271 million in Department of Transportation funds given to the “Garden State.” The money was supposed to be used to build a tunnel under the Hudson River and help end a major gridlock for commuters going to and from New York City.

Governor Christie cancelled the nation’s largest mass transit project last October because he thought spending $8.7 billion to double the capacity of rail service under the Hudson River was too expensive. Never mind that the rail tunnel in use is one hundred year’s old, or that thousands of jobs would be created and traffic congestion eased – the party of nope, once again said nope, in the view of critics.

When U.S. Transportation Secretary Ray LaHood requested that the $271 million of taxpayer money advanced for the railroad be returned – with interest – Christie hired an expensive Washington law firm, at N.J taxpayers’ expense, to fight and prevent federal taxpayers from getting their money back.

Okay so far, but that’s only part of the sad story of our dysfunctional politics. Democratic Senators Frank Lautenberg and Robert Menendez from New Jersey then lobbied the Democratic Obama Administration to get New Jersey out if its legal obligations.

The result is a deal that will reimburse federal taxpayers only $95 million for money that was supposed to be spent building the ARC Tunnel.

In addition to the cash payment amount, New Jersey will be required under the terms of the settlement agreement to spend more than $128 million in CMAQ program funds on transit-related projects that have been reviewed and approved by DOT. The catch is that CMAQ funding is different and already in place – for how much longer under the current deficit wars, remains to be seen.

“We appreciate the support and encouragement of Senators Lautenberg and Menendez in reaching an agreement that is good for the taxpayers of New Jersey, but also helps to improve infrastructure in the state,” Secretary LaHood said in a statement. “I thank the governor and his legal team for reaching this agreement.”

Well, it sounds like LaHood (an Illinois Republican appointed by Obama) had no choice. Defenders of the deal, and there are some, say that DOT maneuvered to get N.J. taxpayers some benefit from the cancelled transit investment. In their view this solves the standoff over reimbursement — interest and penalties were accruing daily that New Jersey taxpayers would have been responsible for — and maybe New Jersey residents will also get the benefit of improved transit in the state.

We will see. There sure is enough political manure here in my view to help New Jersey remain the garden state…

About Ken Zino

Ken Zino is an auto industry veteran with global experience in print, broadcast and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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