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No, the GAO Report Does Not Undermine Christie’s Tunnel Cancellation

In 2010, New Jersey Governor Chris Christie announced he was canceling a proposed public transportation project that would have constructed a new train tunnel under the Hudson River. The project was meant to ease commuter congestion between New Jersey and New York City. Christie was sympathetic to the aim of the tunnel, but when it became clear the costs would spiral, he realized it would contravene his gubernatorial mandate, which was to bring the state’s shockingly debt-burdened books closer to fiscal sanity.

In addition, the state’s transportation trust fund was almost bankrupt, and would have necessitated an increased gasoline tax to pay for the shortfall. That means the cost of the tunnel would have been far higher to New Jerseyans than just the on-paper cost estimate. So Christie canceled the tunnel and steered $4 billion earmarked for the project to the transportation trust fund. It’s hard to imagine a more reasonable decision, especially in light of the state’s finances and Christie’s promise to cut spending and eliminate waste rather than simply raise taxes even more to pay for the state’s exploding debt. But Democratic Senator Frank Lautenberg swore that neither he nor the federal government were done with Christie. Today, via the New York Times, they seek their revenge.

When Christie canceled the tunnel, he cited estimates that the project’s cost overruns would be even higher than previously expected and that New Jersey would be left holding too much of the tab. So Lautenberg had the Government Accountability Office (GAO) investigate Christie’s claims. The GAO investigation seems to have amounted to asking the federal government whether they swear, scout’s honor, that the project would meet its cost estimates–because, come on, the federal government never underestimates the price of a massive construction scheme.

The GAO will release its report this week, accusing Christie of misleading about the costs of the project. The GAO leaked the report today to the Times, however, so they could slap a headline on it that would cement the parameters of the discussion while discouraging anyone from actually reading the report. Even the leaked accusations, however, miss their mark. Any honest reading of the GAO’s findings shows Christie to have been right all along. Here is the crux of the disagreement:

The report by the Government Accountability Office, to be released this week, found that while Mr. Christie said that state transportation officials had revised cost estimates for the tunnel to at least $11 billion and potentially more than $14 billion, the range of estimates had in fact remained unchanged in the two years before he announced in 2010 that he was shutting down the project. And state transportation officials, the report says, had said the cost would be no more than $10 billion.

Mr. Christie also misstated New Jersey’s share of the costs: he said the state would pay 70 percent of the project; the report found that New Jersey was paying 14.4 percent.

In fact, the “range of estimates” most certainly did not remain unchanged, as the GAO and the Times claim. The project was thought to be too expensive for the state when Christie was told it would cost more than $8 billion. As the GAO admits, state officials then said the tunnel could cost up to $10 billion. But the cost estimates didn’t stay at $10 billion either. As the Times report buries later on in the story, federal and state officials admitted costs could rise to as high as $12.4 billion, and then six weeks before Christie cancelled the project federal officials came back and said the cost might actually hit $13.7 billion. When state officials who supported the project got nervous about Christie’s dedication to the tunnel, they returned to insist it would probably stay at about $10 billion.

In other words, Christie was right. As for the state’s share of the costs, the article goes on to explain that the GAO only arrived at its number (14.4 percent) by excluding another bridge New Jersey would be required to build as part of the project, excluding the fact that New Jersey would have to fork over earmarked transportation stimulus funds for the project, and excluding the share of costs held by the Port Authority, which is run by both New Jersey and New York.

It is the GAO, egged on by Christie’s Democratic opponents and spun by the New York Times, that is misleading about the costs of the project. In hindsight, this only makes Christie’s decision not to be cozened by the tunnel project even wiser.



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