Cuomo Seeks to Salvage Agreement on Financing Hudson Rail Tunnel

(Bloomberg) -- New York Governor Andrew Cuomo's administration is fighting back at President Donald Trump's U.S. Department of Transportation casting doubt over its commitment to finance the $12.7 billion Gateway commuter rail tunnel under the Hudson River.

The governor's budget director said stepping away from an agreement with former President Barack Obama's administration to have the federal government split the cost of the work with New York and New Jersey would cloud “the entire basis for getting the critical national infrastructure project done.”

That arrangement, state Budget Director Robert Mujica said in the letter Sunday to the Federal Transit Administration, was discussed at an August meeting at the White House attended by Trump, the governors of both states, and U.S. Secretary of Transportation Elaine Chao.

In a Dec. 29 letter, K. Jane Williams, deputy administrator of the U.S. Federal Transit Administration, said “there is no such agreement” to pay half the cost of the Gateway project. The states are racing to avoid the catastrophic failure of the two existing tubes, which serve Amtrak's Northeast Corridor service from Boston to Washington, as well as New Jersey Transit's commuter trains into Pennsylvania Station, the busiest U.S. rail hub. Both tubes are more than 100 years old and were badly damaged by salt water from Hurricane Sandy in 2012.

Mujica fought back against an interpretation put forth by Williams that 83 percent of the total project cost would come from U.S. loans and grants. The states stand ready to borrow much of that money using federal programs, he said.

“When a family takes out a mortgage to buy a house, it is the family who is responsible to pay that mortgage,” he wrote. “No one thinks the bank has bought and paid for the home just because they loaned the funds.”

To contact the reporter on this story: David M. Levitt in New York at dlevitt@bloomberg.net.

To contact the editors responsible for this story: Daniel Taub at dtaub@bloomberg.net, Bruce Rule, Mark Niquette

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