As Ronald Reagan said, "There You Go Again."

  Oh, Chrissie, what have you done this time? 


    On the last Friday in April,  2011, Sen. Frank Lautenberg (D-NJ) received a very expensive letter from Transportation Secretary Ray LaHood.

    The letter said that the Department of Transportation would order the governor to repay the $271 million already provided to New Jersey for that project to build a new commuter tunnel under the Hudson River. After abruptly withdrawing from the project, Gov. Christie had appealed an earlier order to return the funds.   But as this letter clearly indicated, the DOT did not accept his rationale for bailing on the ARC Tunnel project.

   

"The law is clear on this matter," Transportation Secretary Ray LaHood wrote in a letter to U.S. Sen. Frank Lautenberg today explaining the decision. The state received federal funds on the expectation that it would see the ARC tunnel through to its completion, he wrote.



   "In this case, after the initial contract was entered into and later expanded at Governor Christie's request, the state of New Jersey broke the terms of the contract," LaHood wrote. "The Governor's unfortunate decision will affect the commuters in New Jersey and the entire Northeast region for generations."


      Christie pulled the plug on the project last year citing the possibility of substantial cost overruns, which would have fallen to New Jersey taxpayers.  

   After reviewing the state's appeal,  LaHood wrote that Christie was well aware in August 2008 that costs could grow from the baseline estimate of $8.7 billion to as much as $12 billion.

   

"Any notion that the potential for cost growth constituted new and emergent information when the Governor made his decision is simply not accurate," LaHood wrote.

   
A spokesman for the governor declined to say if the governor knew about the higher cost projections in 2008. New Jersey Transit, which received the federal funds, also declined to comment. 

      

"This is an unfortunate situation," said Lautenberg and Sen. Robert Menendez in a statement. "We worked hard to get the parties to negotiate a fair resolution of this conflict. However the state's outside lawyers pursued an all or nothing approach, which brings substantial risk to New Jersey taxpayers. Given the high stakes involved in this matter, we sincerely hope the state's approach is successful."


     Interest will start to accrue on the $271 million starting today (4-29-2011) at an annual rate of 1 percent, according to federal law.  

   Meanwhile, the D.C. based law firm of Patton & Boggs continues to work on the state's appeal, having already billed New Jersey for $800,000 in legal expenses for December and January, with additional bills to come for the tax-payers.