Dive Brief:
- The Trump administration is disputing claims that there is a valid agreement on the books for the federal government to pay half the costs of the nearly $13 billion New York-New Jersey Hudson River tunnel project, according to Crain's New York Business.
- New York and New Jersey officials submitted a proposal to the Federal Transit Administration (FTA) expressing a desire to finance their half of the project with federal loans and, in the agency's Dec. 29 reply, FTA Deputy Administrator K. Jane Williams said it was "unhelpful to reference a nonexistent agreement." Williams said nine out of 10 tunnel passengers are local, making the project a local concern, even though the regional corridor it serves contributes greatly to the national economy.
- The Obama-era Department of Transportation in 2015, according to Crain's, had agreed to the 50-50 split with New Jersey Gov. Chris Christie, Senate Minority Leader Charles Schumer and New Jersey Sen. Corey Booker. In a response to the FTA, Robert Mujica, New York's budget director, said the arrangement was also discussed at a meeting in August with President Donald Trump and Secretary of Transportation Elaine Chao in attendance, according to Bloomberg.
Dive Insight:
The FTA's claims that the project is a local one run counter to the administration's past characterizations of the entire $24 billion Gateway Program. Before the inauguration last January, Trump's team put together a priority list of 50 projects — worth almost $138 billion — that were deemed critical to national security, and the Gateway project was No. 1. According to McClatchy DC, the list was circulated among the country's governors for input.
On the list, the administration also noted that 50% of the financing for those vital infrastructure projects would come from the private sector. The president appeared to walk back that strategy in September when he told a group of House Democrats that public-private partnerships (P3s) were "more trouble than they're worth" and would not play a significant part in his $1 trillion infrastructure plan. But P3s were a big part of Trump's budget proposal last year, and an administration official, D.J. Gribbin, seemed to talk up the future role of P3s in a national infrastructure plan last month in a speech at the Hudson Institute.
Before President Obama left office, Chicago Mayor Rahm Emanuel and the city council fast-tracked Chicago's application for a $1 billion FTA grant to lock in the administration's matching funds commitment for the $2.3 billion Red Line rail project, avoiding the situation in which the Gateway Program finds itself now. The city will pay for its share through a transit tax-increment financing district and bonds.
