New Jersey Governor Chris Christie, a Republican, announced yesterday that New Jersey was withdrawing from participation in opening a second rail tunnel beneath the Hudson River. The decision came after New Jersey officials determined that the state would have to bear $2.5 billion in cost overruns. Mr. Christie said he could not put New Jersey taxpayers on a “never-ending hook.”
Senator Frank Lautenberg, a New Jersey Democrat, condemned Christie’s decision. “Killing the ARC (Access to Region’s Core) Tunnel will go down as one of the biggest public policy blunders in New Jersey’s history…Without increased transportation options into Manhattan, New Jersey’s economy will be crippled.”
Dr. Paul Krugman, a Professor of Economics at Princeton University (formerly the College of New Jersey) and a columnist for the New York Times, excoriated Christie for his decision, calling it “destructive and incredibly foolish on many levels.” As Dr. Krugman pointed out , New Jersey is “the most densely populated state in America, more densely populated than any major European nation.” Many of those people work in Manhattan. Thus, the single rail tunnel, more than 100 years old, is insufficient. “The need for another tunnel couldn’t be more obvious,” Dr. Krugman concluded.
However, the scrapping of the tunnel may have an unarticulated consequence. The massive New Jersey population may decide not to commute. Those who live in New Jersey may if possible move their work there. They may try to telecommute. Businesses with incentives to leave Manhattan due to the high cost of doing business may view New Jersey even more desirably if the commutation becomes more difficult and expensive. Cancellation of the tunnel project may have the effect of capturing more business for New Jersey, resulting in more in-state spending and an increased tax base. New Jersey would be made more desirable if the state funds earmarked for the tunnel are redirected to intrastate improvements.
Governor Christie did not give these as reasons for his decision. Perhaps this gives him too much credit in view of the fact that he is promoting this decision as a cost-saving measure only.