WALL STREET JOURNAL – “I cannot place upon the citizens of the State of New Jersey an open-ended letter of credit,” said Garden State Governor Chris Christie yesterday.
Mr. Christie was affirming his decision to cancel a bloated project to build a new railroad tunnel under the Hudson River to New York City. He also affirmed that a government that already taxes its citizens more heavily than any other state in the country and has still racked up more than $100 billion in unfunded liabilities must finally recognize its limits.
The proposed tunnel was a joint project of the state of New Jersey, the Federal Transit Administration, and the Port Authority of New York and New Jersey, with each contributing roughly equal amounts. The catch was that Jersey would pay for any cost overruns.
What are the chances that this project would have been completed on budget? Consider the history. Expected to cost less than $5 billion during initial planning, the price tag jumped to $7.6 billion amid environmental impact studies in 2005. By the fall of 2008, $8.7 billion was the working assumption—until last summer when the feds forecast at least $10.9 billion, and possibly as much as $13.7 billion. After Mr. Christie made it clear last month that he wanted to avoid the fiscal train wreck looming under the Hudson, the feds reduced their estimated costs to a range of $9.8 billion to $12.7 billion.
In any case, Garden State taxpayers would still have been on the hook as soon as the meter ran above $9.8 billion, which even the feds acknowledge was a 90% certainty. It’s hard to blame Mr. Christie for sparing taxpayers from such a fate.
Printed in The Wall Street Journal, page A16