This just in from the U.S. Department of Transportation, there is an ARC tunnel settlement. The federal government had maintained that New Jersey owed $271 million for money spent on the now-cancelled Access to the Region’s Core Tunnel project that would have expanded rail access between New Jersey and New York’s Penn Station. As recently as this morning, the feds had said that NJ owed an additional $2.6 million in interest on that money.
We’ll have reactions and analysis coming in a bit. Here are the official statements.
Statement of U.S. Transportation Secretary Ray LaHood
U.S. Transportation Secretary Ray LaHood announced today that he has signed an agreement with New Jersey Gov. Chris Christie for the state to reimburse the federal government $95 million for money that was supposed to be spent building the ARC Tunnel. New Jersey terminated the project and the Department has been seeking repayment of $271 million in federal dollars spent by the state on the project.
The $95 million settlement will permit DOT to recover all of the $51 million in New Starts money provided to New Jersey for the ARC Project, so that those funds can be made available to other communities for public transit projects. This amount also recovers approximately 50 percent of the funds provided to New Jersey under the American Recovery and Reinvestment Act, and this money will be returned to the United States Treasury. 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.
“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. “I thank the governor and his legal team for reaching this agreement.”
Here’s the statement from New Jersey Governor Chris Christie:
“I am pleased to announce that we have negotiated a good-faith settlement with the Federal Transportation Administration that puts the interests of New Jersey taxpayers first by substantially reducing the federal government’s original demand. The 5-year payment schedule on a $95 million settlement – which contains not one additional dollar of New Jersey taxpayer money – would be offset by more than $100 million in insurance premium refunds. This represents a fraction of the federal government’s initial claim and won’t cost New Jerseyans any additional money, which would otherwise go to infrastructure improvements. I want to thank U.S. Transportation Secretary Ray LaHood and his staff for their good-faith efforts in working with us and putting the interest of New Jersey taxpayers ahead of politics. I also want to thank New Jersey Transit and Executive Director Jim Weinstein for their commitment to working toward this settlement.”
NJ’s Senate delegation has also weighed in. A joint statement reads:
Today’s agreement builds on a deal reached in December between DOT and Senators Frank R. Lautenberg (D-NJ) and Robert Menendez (D-NJ) that New Jersey would not have to ultimately pay back $128 million of the total $271 million debt. Of the remaining $143 million, thanks to pressure from Senators Lautenberg and Menendez – as well as members of the state’s House delegation, New Jersey’s liability will be reduced to $95 million under this deal.
“I thank Transportation Secretary LaHood for honoring our initial agreement to reduce New Jersey’s liability by $128 million off the bat. The further reduction in the state’s liability will take pressure off New Jersey taxpayers as well,” Lautenberg said. “The Governor’s decision to kill the ARC tunnel project will hurt New Jersey in the long-term, but we were happy to work with the Department of Transportation to help reduce the costs of this mistake.”
“While I remain disappointed that the state abandoned this job-creating project for which we fought so hard to fund, I’m thankful to Secretary LaHood for working to resolve this dispute in a way that best protects our taxpayers,” Menendez said.
