ON Wednesday, Gov. Chris Christie of New Jersey announced that he was canceling the proposed Hudson River
rail tunnel known as Access to the Region’s Core, saying that his state is unable to pay its share of what he
believes will be a $10 billion to $13 billion project after cost overruns. He had made the same declaration a
few weeks ago, but was convinced by Secretary of Transportation Ray LaHood to give the proposal more
The region is in desperate need of the tunnel. Every day, about 275,000 New Jerseyans commute across the
Hudson River to New York. During rush hour, Amtrak and regional trains are full and the two Hudson River
tunnels are near or at capacity. The third tunnel would provide room for 70,000 more New Jerseyans to reach
Manhattan each day.
So Governor Christie’s position is shortsighted — but he also has a point: New Jersey is being asked to
shoulder too much of the burden for the project. Where, specifically, is New York’s contribution to the effort?
Original estimates put the project’s cost at $8.7 billion, with New Jersey chipping in $2.7 billion and the
federal government and Port Authority of New York and New Jersey each contributing $3 billion.
In other words, New Jersey would have to shell out more than its fair share for the tunnel project, while
New York, which stands to gain in a number of big ways, would pay nothing.
Already, serious imbalances exist between New York and New Jersey. More people commute into New York than
into New Jersey — and all those commuters calculate how much income tax they owe New York State and take that
as a credit against what they owe New Jersey. Because effective income tax rates are higher in New York, they
pay little, if anything, to their home state. (New York salaries are, on average, 60 percent higher than in New
Jersey, according to a recent report by the Regional Plan Association.)
This tax agreement between the states represents a huge revenue loss to New Jersey, more than $2 billion in
income taxes that could be used, say, to support its schools. And that number would likely grow if a new tunnel
made it faster and easier to commute into the city.
The solution here is simple: those who would benefit should share the cost. To match New Jersey’s
contribution, New York should dedicate the billions of dollars of income taxes that it annually collects from
New Jersey residents toward construction of the tunnel. That way each party would have a quarter in the
If New York were to become a true partner in this project, Governor Christie might be more likely to cover
New Jersey’s share of the tunnel’s cost. And despite his state’s well-known budget woes, Mr. Christie does have
options for raising the money — he just refuses to acknowledge them.
For starters, New Jersey should raise its gas tax to improve the state’s transportation network. The tax, at
14.5 cents per gallon, is the third lowest in the nation and hasn’t been increased since 1988. The state’s gas
is so cheap that every driver in the region knows to fill his tank here — about 30 percent of gas sales in the
state are to out-of-state drivers.
An increase of 15 cents a gallon would generate about $750 million annually. At 29.5 cents per gallon, New
Jersey’s rate would be still lower than most states in the region. And it’s a fair deal for drivers, because
more commuters traveling by train would mean less traffic congestion on the roads. The state should also
require drivers to pay sales tax on gasoline purchases. Several states — including New York — do this. With gas
at $2.50 per gallon, applying sales tax would raise another $750 million a year for the state.
Beyond just helping to transport more commuters, the tunnel was expected to create 6,000 construction jobs
and at least 40,000 permanent jobs of all sorts in both New York and New Jersey. Research also suggested that
within eight years of opening, Access to the Region’s Core would add $18 billion to residential and commercial
property values within two miles of New Jersey Transit and Metro-North stations.
The tunnel would increase the reliability of commuter trains, reduce car traffic, drive economic growth and
increase home values. Governor Christie must recognize that the benefits of the project outweigh his anti-tax
rhetoric. And New York must recognize its responsibility to share the costs as well as the future benefits of
the new tunnel.