Thursday, October 7th, 2010
New Jersey Governor Chris Christie today officially pulled the plug on an $8.7 billion plan to build new rail tunnels from New Jersey to New York. Commuter and Amtrak trains today are limited to a single pair of tracks that is already at capacity, meaning New Jersey has in effect permanently decided never to expand commuter rail connectivity to New York.
I’ll admit I kind of like Chris Christie. His east coast combative style is entertaining, but what’s more important, he’s tackling the entrenched interests in New Jersey such as the leadership of the teachers’ unions head-on, and also starting to restore fiscal sanity to the state. Unfortunately, Christie also embodies the worst aspect of his breed, notably a tendency by some Republicans to see the entirety of public policy in terms of simplistic cost cutting, a sort of political version of “Everything I Need to Know to Run a State I Learned in Kindergarten.” Alas, Christie appears to be a graduate the infamous “Chainsaw Al” Dunlap school of management, where there are no problems that can’t be solved by firing a few thousand people, and the budget ax is a substitute for strategy. Just cut the budget, then cut some more. Rinse, repeat. Actually coming up with a positive program for transportation or anything else is not required.
The sad thing is, the ARC tunnel project is a debacle, and most sensible transportation advocates are up front about that. There are better options out there (Alt-G, for example). I was optimistic Christie would look at this and change course in a more sane direction, to deliver the value New Jersey needs at much lower cost.
As it turns out, he just wanted to cancel the whole thing, and it seems likely the real motivation was to seize the $2.7 billion the state had allocated to it to paper over a budget hole at the state department of transportation. Once that money is depleted, New Jersey will be right back where it started, and with North Jersey’s connection to the regional economic engine of New York probably permanently capacity crippled.
Christie rationale is that the project looks like it might run over budget. Well if so, whose fault is that? Isn’t it actually Christie’s job to manage New Jersey’s projects to a successful on time, on budget completion? I mean, at $8.7B, nobody can complain that the budget isn’t generous. It sounds to me like Christie’s saying that the people of New Jersey elected as their governor someone without the executive and managerial competence to run the programs the state has undertaken. Perhaps that’s not surprising. Cutting budgets is easy, actually managing the accomplishment of a major project is hard. Why bother even trying when you’re already a star on the town hall You Tube video circuit? All you can do is screw it up.
The crazy thing is, this was already largely an OPM project – Other People’s Money. The federal government had committed $3 billion – the largest commitment to a transit capital project in US history. The Port Authority was chipping in another $3 billion, of which we can assume half or so is coming from New York. So to grab $2.7B back for him to play with in the state budget, he’s forfeiting $4.5 billion in non-New Jersey cash plus abandoning long term infrastructure investment in New Jersey future’s. New Jersey already looked to be getting a good ROI on it’s share of the money. By reversing the transaction, that return is the interest paid, and I’m yet again reminded of someone who is so desperate for cash he’s running down to the local check cashing store for a pay day loan to tide him over till the next election rolls around.
Future generations will pay the price for failing to invest in infrastructure. A guy who gets it completely when he talks about the bills now coming due for previous promises around pensions and such can’t seem to wrap his head about the same bill coming due for not investing in infrastructure these past decades.
Ironically, Christie railed against the federal bureaucracy for Race to the Top when a clerical mistake cost his state money. But who’s complaining now as Christie throws $3B back in the feds’ faces? US DOT should promptly redirect the money from this project and let New Jersey know in no uncertain terms it isn’t going to play these reindeer games anymore. Next time New Jersey applies for a discretionary federal grant, Washington ought to stamp it “Return to Sender, re:See ARC Tunnels.”
I’ll contrast Christie with another fiscally conservative Republican, Indiana Gov. Mitch Daniels. Daniels understands the difference between operating bloat and investment, and the need to balance the short term and long term view. He didn’t rob Peter to pay Paul by shuffling money around. Rather, he did a creative lease of the state’s money losing Toll Rd., generating $3.9 billion to finance the largest road construction program in the state’s history, eliminating a huge part of the state’s backlog of projects. That money has been flowing full steam ahead while operating budgets are trimmed elsewhere to deal with fiscal reality. This investment will pay dividends for years to come for Indiana the same way a refocused, better, lower cost ARC project would have done for New Jersey. Conveniently, New Jersey does have a Toll Road – one far more lucrative than Indiana’s. Tapping that as a financing vehicle for the highway infrastructure deficit would have been the way to go.
As Christie pulls the cord to fire up his chainsaw once again, I’m sure he’ll talk about the need to balance budgets. But as I noted before, if you can’t afford your infrastructure, and you can’t afford to provide basic services, what you’re really saying is that you can’t afford to be state and are holding a slow motion going out of business sales. Budgets have to be balanced, but New Jersey’s problems – it’s ahead of only the District of Columbia on the Small Business Survival Index, for example – go far beyond that.
New Jersey is slowly sinking into the muck. In his preening on about costs, Christie is missing the big picture around the change New Jersey – and too many other states – need to make to carve out a prosperous role for themselves in an ever more competitive, globalized, changing wold. If that doesn’t change, the state can look forward to day when its stock is inevitably delisted by residents and investors. See you on the pinks, Christie.