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  • Chris Christie Stops Dumping Money Into A Giant Hole

    New Jersey Gov. Chris Christie (R) announced today that he is standing by his decision to cancel the under-construction ARC (Access to the Regional Core) rail tunnel under the Hudson River from New Jersey to New York. According to the AP, Christie was given four financial options for salvaging the project, but said no agreement could guarantee that New Jersey taxpayers would not pay more than $2.7 billion for the completed project.

    Earlier this month when Christie first voiced concern for the project, Wendell Cox defended his decision at Newgeography.com:

    1. Exaggerating the Need for the Project The new rail tunnel is to serve a purported increase in commuter rail ridership to Manhattan jobs in the future. The project’s Final Environmental Impact Statement says that Midtown Manhattan’s employment will grow from its present 2.6 million by another 500,000 by 2030. This is unlikely. Manhattan’s entire employment (not just Midtown) peaked at 2.4 million in 2008. One might expect the planners could have gotten something so simple correct. Manhattan employment remains below 2001 levels and never rose more than 35,000 even at the peak of the last boom (annual figure, from 2001). The consultants also are projecting a 1.6 million population increase west of the Hudson River (New Jersey suburbs along with the New York counties of Rockland and Orange) by 2030. However, the New Jersey and New York metropolitan counties to the west of the Hudson are more likely to grow only 1.1 million, based upon official state projections (Note). The questionable population and employment projections reveal that the “need” for the new tunnel may have been grossly overstated.

    2. Exporting New Jersey Jobs to New York Why should New Jersey pay to build more capacity so that its people can work across the state line? Why should they not work in New Jersey? New Jersey is often thought of an economic afterthought in Manhattan centric media and business interests (such as by The New York Times). In fact only a small share of New Jersey commuters travel to Manhattan for work. Even in the New Jersey counties that border New York, only 12% of commuters work in Manhattan. In the other New York metropolitan area counties in the metropolitan area, the figure drops to 5%.

    The trends here are also important. Since 1956, every new job in the New York metropolitan area has been created outside Manhattan (Manhattan’s employment is 400,000 lower now than back then). New Jersey depends on New Jersey far more than it does New York. New Jersey has developed successful new office complexes in Jersey City, New Brunswick, along the I-287 Belt Route and elsewhere. Perhaps New Jersey should seek to minimize work trip lengths and encourage the next 500,000 jobs to be created in the state rather than in New York. Downtown Newark, for example, has excellent transit access and could use substantial new employment investment. This might prove more beneficial for New Jersey and its taxpayers.

    3. Costs Could Rise Even Higher The tunnel could easily climb in cost beyond the now feared $14 billion. Big Dig cost escalation continued almost to the project’s opening. There is no reason to expect it will be different with the Hudson tunnel. It has been reported that one of LaHood’s options is simply to lower cost projections. New Jersey should buy that option only if the federal government underwrites all of the cost overruns. However, such a deviation from federal policy would bring stiff opposition from other parts of the country.

    You can find The Heritage Foundation’s research an transportation here.

    Posted in Economics [slideshow_deploy]

    8 Responses to Chris Christie Stops Dumping Money Into A Giant Hole

    1. Jim Fraser says:

      As a Civil Engineer I have had a small amount of experience with Public projects although nothing on the scale of this project. I do not claim to be the most qualified Engineer to speak about Public Works projects such as this but certainly have a little to add to the debate.

      I have noticed on Public Projects, as opposed to Private, that people involved generally have much less regard for costs of construction. I was working on a 2 public projects in 1999 and determined a method to save about $60,000 on a project whose budget was about $800,000. I was relatively new to Public work at the time and foolishly thought I may be a hero. Long story short the method I determined would require the Gov't representatives to file new paperwork to the Gov't agencies. Needless to say they were not interested since it was only taxpayer money and basically said as much.

      When I bring these situations to my Private Clients they are quick to implement them because in the end it is their money.

      Moral of the story: When it is someone else's money people tend to be ambivalent to cost savings and is a factor in Cost overruns.

      I support Governor Christie's decision on this.

    2. gerrit, conn's says:

      "i love the money fires!"

      conn has a pro-hole agenda, btw. beware.

    3. Barbie,Hbg., PA says:

      I love this governor. These days we seldom see someone with so much common sense. Ben Franklin would be proud. Wish we had a governor in PA just like him. I wish we could clone him. lol.

    4. Tony, Garfield, NJ says:

      Christie has brought to a light an all too common government scam – low balling "estimates" for jobs in order to get approval (with minimal oppostion) – these quickly escalate without much notice.

      Look at the NJ Schools Construction Corp – 8 billion was estimated to do all that work. However, the money was drained with less than half of the work completed. Reality was that if we were initially told that the cost would be $16 billion or more at the time, everyone would have screamed.

      Have you ever of a government job coming in under budget? And we want more government?

    5. Linda, Pickens, SC says:

      Chris Christie for President….he has my vote

    6. Drew Page, IL says:

      I sure wish we had this guy in Illinois.

    7. Mike, IL says:

      "Drew Page, IL on October 27th, 2010 at 3:00pm said:

      I sure wish we had this guy in Illinois."

      Amen! to that

    8. Guy, NJ says:

      Let's face it, we need politicians who have the guts to jump in and do radical surgery and cut government spending and allow the people to keep more of their money. Most government ‘projects’ are a boondoggle and wind up costing way more than estimated. Just as the new ObamaCare health care will cost way more than estimated while permanently increasing the size of government with thousands of jobs we will have to pay for, not to mention all the pensions and health insurance we the taxpayer will pay for with these, our new government employees. You can pretty much figure a government project will cost 2-3x what we the people are told. These lies and tricks with proposals and estimates and then wasting our tax dollars are a sin. Then we form ‘committees’ to see what went wrong. You can bet any government ‘project’ will create more no-show jobs for political pay backs and more people who depend on the government for jobs. This causes all the government workers (the government being the largest employer in the world) to vote for anyone in office who wants more government.

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