The U.S. Dept. of Transportation has sent New Jersey a second and final notice, directing the state to repay $271.1 million in federal funds disbursed for a $9.1-billion rail-tunnel project that Gov. Chris Christie (R) canceled last October. The Access to the Region's Core was to be a nine-mile commuter rail link under the Hudson River, from Secaucus, N.J., to midtown Manhattan.

DOT's Federal Transit Administration in November issued its first formal demand that the state repay the money. New Jersey reviewed the amount of the repayment claim and examined FTA project records. In a final decision issued on April 29, FTA said Christie and New Jersey Transit (NJT) “terminated the project for reasons manifestly within their control” and must repay the funds.

“We disagree with the FTA's conclusion,” says Kevin Roberts, a Christie spokesman. “New Jersey was unable to move forward with the project for reasons beyond the state's control. Billions of dollars in unaccounted-for cost overruns and re-estimates of costs late in the process only [increased] New Jersey's financial burden.” He adds, “We will review the decision before determining next steps.”

FTA's decision, signed by its associate administrator for budget and policy, Robert J. Tuccillo, says the state knew in August 2008 the costs ranged from $8.4 billion to as much as $12 billion. Last fall, FTA updated the numbers to $9.8 billion to $12.4 billion.

The Port Authority of New York and New Jersey had committed $2.7 billion, and New Jersey pledged $2.7 billion, including $1.25 billion from the New Jersey Turnpike Authority and $1.35 billion in federal highway aid. FTA was to provide about $3 billion.

In an April 29 letter to Sen. Frank Lautenberg (D-N.J.), U.S. DOT Secretary Ray LaHood said, “The law is clear on this matter. … The statute requires FTA to collect the taxpayers' funds if … NJT disavows its responsibilities under the contract and fails to complete the project.”