Five questions about the Gateway Program, answered

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Five questions about the Gateway Program, answered

The Gateway Program, five questions answered
December 17, 2017

The Gateway program is the Lucy’s football of regional politics – long-promised and long-awaited, but always just out of reach. In 2010, New Jersey Gov. Chris Christie scuttled a plan to construct a tunnel underneath the Hudson River, which had already secured $3 billion in funding. Nearly eight years later, progress towards the project continues to be agonizingly slow. On Thursday, Gov. Andrew Cuomo and Christie reached a tentative funding deal for the tunnel project, but local and national considerations may get in the way of the agreement. Here are five things to know about what the Gateway program is, who’s involved, and why this latest football may also be snatched away.

What is it?

The project includes building an additional rail tunnel underneath the Hudson River and repairing existing tunnels. It also involves expanding Penn Station, and replacing the Portal Bridge, which carries NJ Transit trains to and from New York. Construction for the Portal Bridge began in October, with state funding secured and federal funding pending. The Gateway Program, and specifically building and repairing tunnels beneath the Hudson, was a priority for the Obama administration. In 2015, that administration ranked it as the most important rail infrastructure project in the country in 2015, and committed to paying up to half the cost.

How much will it cost?

A report released in July by the Federal Railroad Administration and NJ Transit estimated that the entire Gateway program could cost as much as $29.1 billion, while the tunnel project could cost nearly $13 billion.

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Who are the key players?

Planning for the project is administered by the Gateway Program Development Corp., which was formed in 2016. Its stakeholders include Amtrak, the Port Authority of New York and New Jersey, NJ Transit, and the U.S. Department of Transportation. The corporation originally had four trustees – one representative each from the states of New York and New Jersey, one from Amtrak, and one from the U.S. DOT. However, in keeping with President Donald Trump’s tradition of opposing most policies championed by his predecessor, his administration has backed away from supporting the program. In July, the U.S. DOT pulled out of the board overseeing the corporation. The Trump administration also aims to phase out a grant program that would have provided funds for the project.

In September, Trump met with Cuomo and Christie and a bipartisan congressional delegation from both states to discuss the issue, but no definitive deal was made. According to Regional Plan Association President Tom Wright, the two governors are hoping to put pressure on Trump with their new joint proposal.

“I think what they're doing is they're advancing the issue and forcing the federal government to keep playing ball and to stay on the field,” Wright said.

So what’s the new plan?

The agreement reached by Christie and Cuomo specifically addresses the Gateway tunnel project, that is, building the new tunnel under the Hudson and repairing existing infrastructure. Cuomo proposes contributing $1.75 billion from New York using a loan from the federal Railroad Rehabilitation and Improvement Financing program, and designating a portion of the state budget to refinance that each year for 35 years. NJ Transit would provide $1.9 billion, also financed through a RRIF loan. NJ Transit would generate funding for the loan by hiking train fares beginning in 2020. The Port Authority previously committed $1.9 billion to this project, bringing the total contributions to $5.55 billion.

The federal government would be expected to finance the other portion of the project, in addition to providing the loans. Wright said it would be “absurd” for the Trump administration to believe that the RRIF loans would be their only contribution, likening these loans to ones from the bank.

“When I bought my house, I borrowed money from a bank to buy it, but I was still paying for the house, not the bank,” he explained. He also noted that this project fulfills the purpose of RRIF loans, which is to finance railroad infrastructure.

With New Jersey and New York splitting half of the local cost through RRIF loans, the federal half of funding for the Gateway project will need direct investment.

“It may be that a portion of that comes from surcharges on Amtrak riders – wouldn't surprise me – but a large portion of it is really going to have to come from direct federal support,” he said.

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What are the chances for this plan to succeed?

Apathy from the White House and animosity from some New Jersey officials may dim this proposal’s chances for success. According to reporting by Politico New York, the Trump administration is unenthusiastic about Christie and Cuomo’s proposal, which focuses on funding for the new tunnel while sidestepping the issue of repairing existing tunnels. The two states also have not yet applied for the RRIF loans upon which their whole plan relies. Crain’s New York Business reported a senior administration official calling this proposal “entirely unserious.” Furthermore, Trump is planning on releasing his own $1 trillion infrastructure proposal in January, which may include a plan for the Gateway tunnel.

Wright believes that Christie and Cuomo were smart to reach a deal before the possible federal infrastructure plan is released, because it draws federal attention to the issue, even if it is not directly addressed by the government.

“I think that until New York and New Jersey stepped forward with something like this, the feds could keep saying, ‘Well, we're waiting to see the local match,’” Wright explained. “So, what they're doing is, they're taking that card off the table.”

The new plan was also hammered by New Jersey Gov.-elect Phil Murphy and New Jersey Democratic leaders for adding a fee to NJ Transit tickets. Murphy questioned the timing of the plan, given that Christie is about to leave office, and said that he would review the proposal.

While Wright said that Murphy has the responsibility to study the plan, it should be expected that commuters will pay the price in one way or another.

“I think the more detail that can be put behind this, the better, because this is all – again – about forcing the federal government's hand and making them step up with their commitment,” he said.

Grace Segers
is City & State’s digital reporter. She writes daily content on New York City and New York state politics.