Almost a year after U.S. Transportation Secretary Elaine Chao called a massive tunnel connecting New Jersey with New York “an absolute priority,” she said federal loans shouldn’t count toward the states’ share of funding.
The states have pledged some $6 billion, mostly from federal loans, toward a proposed new $12.7 billion commuter crossing under the Hudson River and were counting on federal grants to cover the remainder. Federal authorities have said loans shouldn’t count as the states’ share.
U.S. Senator Kirsten Gillibrand, a Democrat from New York, and Senator Cory Booker, a New Jersey Democrat, asked Chao on Thursday during a committee hearing on President Donald Trump’s infrastructure plan why the federal loans that the states must repay don’t count as local funding.
“We’re not anxious for a fight on this, but for New York and New Jersey to consider funds, debt that we have given them, as part of their equity back to us is something that we disagree with,” Chao said. She said under federal calculations that disregard the loans, the states are putting up only 5 percent.
Gillibrand told Chao that the loans are state obligations that should count as “skin in the game.”
The tunnel is part of a series of projects that compose the $30 billion Gateway project.
Booker pressed Chao about whether loans are now being ruled as local matches across America.
“We should have a fair standard,” he said. “This would crush every area of our country if you shifted that.”
Chao repeated that there is no agreement for the federal government to fund half the Gateway program as state officials have said. That agreement with the Obama administration was a sentence “given at a rally, a political rally, no less,” Chao said.
New Jersey Governor Phil Murphy, speaking at a state Chamber of Commerce dinner in Washington on Thursday night, said he was “committed to getting Gateway back on President Trump’s priority list.”
“No single project is more critical, not just to our state’s economy but to our nation’s economy as well,” said Murphy, a Democrat who took office in January.