Will Unions Eat The ARC?

Why NJ can’t afford new tunnel

It looks like New Jersey Gov. Chris Christie will kill a mas sive new commuter rail line to connect Secaucus to Midtown. Rather than scuttle the tunnel, Christie should leave the choice up to Jersey’s public-sector unions. That is: He can save the tunnel — and the state’s hopes for growth — if they agree to enough givebacks to pay for it.

The project would be a boon to New Jersey and New York. Under the $9.2 billion “Access to the Region’s Core” plan, NJ Transit — until Christie makes the cancellation official — is to build a nine-mile route under the Hudson to run parallel to the congested Amtrak rails it shares now. Two new tunnels would connect commuters to a new underground station on Manhattan’s West Side.

The number of Jersey commuters with a 50-minute ride to Midtown would double, the Regional Plan Association says. Workers in both states could get to jobs more easily, a boon to property values and income-tax revenues.

But, as Christie told Bloomberg News last month, “I don’t have the money . . . I can only spend what I have.” Worried about cost overruns and delays, he’s ordered a 30-day review.

For that, a New York Times editorial accused the governor of “tunnel vision” for sacrificing jobs and imperiling federal funding. In fact, he’s just being realistic. It’s cynical planning under his predecessor, Jon Corzine, that left ARC a basket case.

Corzine broke ground on the job a year ago without having anything close to a plan for finishing it.

A recent federal audit made it clear that Corzine was more interested in the “shovel ready” photo op than in assuring competent management to get the project finished. Most obviously, he didn’t put in place standard practices to prevent fraud and waste. The audit suggested that Jersey go to New York’s Metropolitan Transportation Authority for advice here — and when you need to ask the MTA how to avoid waste, you’re in trouble.

Then, there’s money — or lack of it. Yes, ARC was slated to get $4.4 billion in federal funds. But nobody knows how much the project would really cost — it’s already $500 million over its original $8.7 billion price tag.

Cost overruns are inevitable on urban infrastructure: ARC workers have to thread their way around Manhattan’s water tunnels, electricity and gas lines and subways. You never know what you’re dealing with down there until it’s too late.

That overruns are near certain doesn’t mean that ARC is a bad idea (and continuing it in a recession, when contractors are desperate for work, could help save money). But it does mean that Jersey has to be confident it can afford any contingencies.

The state was supposed to put in $4.8 billion, with $3 billion coming from the Port Authority of New York and New Jersey.

But the Port won’t have extra cash lying around to cover overruns — it’s already stressed to the breaking point by World Trade Center reconstruction. And other potential sources — the Turnpike Authority and NJ Transit itself — are broke, too.

As the audit noted, New Jersey pretty much has no new money for transportation through 2028. Yet the Corzine team didn’t even think about the problem. As the feds’ audit notes, the project agreement “states only that [New Jersey Transit] and the Port Authority will work together in good faith to secure additional funds.”

So Trenton would have to foot any extra billions. But New Jersey, too, is in distress. It already owes $46 billion for its public-employee pensions — a figure set to grow to $85 billion over the next 15 years.

Christie is trying to do something about that. Two weeks ago, he proposed reforms such as hiking the retirement age to 65 and requiring workers to contribute more. But if the Legislature and the unions stymie those changes, the state will need all its borrowing ability just to cover public-employee benefits.

Christie should make a deal outright here: If the Garden State can pare its future pension liabilities by 20 percent, it could save $7.8 billion, enough to pay for ARC and long-neglected maintenance on roads, bridges and transit.

That is, offer New Jersey a basic choice: 1) Keep borrowing to maintain a failed status quo, while neglecting vital investments like ARC, or 2) Make the cuts that will give it the flexibility to grow, by building ARC to support new people and new jobs.

This piece originally appeared in New York Post

This piece originally appeared in New York Post