Feds to NJ: Give us back our $271 million

The fallout from New Jersey Gov. Chris Christie’s decision to cancel the ARC Tunnel continues as the feds have sent New Jersey Transit a letter formally requesting the return of over $271 million in federal funding. The letter — available here as a PDF — is the second such notice sent to the state, and while New Jersey Transit has disputed the amount requested, the feds have set a December 24 deadline for payment.

If New Jersey falls to contest the validity of the amount requested or pay by Christmas Eve, the FTA will consider the state delinquent in its payments. If the delinquency date is reached, the FTA can pursue numerous options. It could report New Jersey to credit and bond rating institutions, and it can request interest of six percent annually. Finally, it can forward the debt to the U.S. Department of Justice for collection enforcement as well.

Ultimately, the feds have “deobligated” New Jersey from repaying all it is had doled out for ARC because $77 million of the initial $348 million went unspent. Thus the state must pay the difference, and by the time they do so, New Jersey will have sunk $600 million into project planning for a total loss of $871 million.