(Bloomberg) -- New Jersey Transit plans to fund its share of the Gateway commuter-rail tunnel project with a surcharge on fares.
The agency on Thursday committed to funding $1.9 billion of the project design and construction costs with a federal loan that would be paid back with a per-trip fare increase for rail customers of 90 cents beginning in 2020. The cost would increase to $1.70 in 2028 and $2.20 in 2038, according to a letter to John Porcari, interim executive director of the Gateway Program Development Corp, from Steve Santoro, executive director of NJ Transit.
New York plans a $1.75 billion federal loan, to be repaid with an annual appropriation from the state’s executive budget.
New Jersey and New York have committed to funding $5.5 billion, or half of the total $11.1 billion cost of the “most urgent, time-sensitive elements of the project,” according to a statement. They are seeking a commitment from the federal government for the rest. The states’ commitment “positions the project to immediately compete for federal Capital Investment Grant Funds,” outgoing Governor Chris Christie said in a statement.
NJ Transit has increased fares five times in recent years, including twice under Christie, a Republican who leaves office next month. NJ Transit commuters pay as much as $480 for monthly train passes.
©2017 Bloomberg L.P.