Plans for a new New Jersey-New York tunnel were derailed last week when the Trump administration killed plans for the federal government to pay half the cost.

In 2015, the Obama administration had reached a deal with the governors of New York and New Jersey to split the costs for a new Amtrak tunnel. However, when the state of New York sent their financial plan for the Hudson Tunnel Project on Dec. 13, 2017, K. Jane Williams, deputy administrator of the Federal Transit Administration, sent out a letter claiming that no such agreement took place.

Williams denied that a ‘50/50’ agreement between the U.S. Department of Transportation, New York, and New Jersey for the funding of the project was ever reached.

“We consider it unhelpful to reference a non-existent 'agreement' rather than directly address the responsibility for funding a local project where nine out of 10 passengers are local transit riders,” Williams wrote.

The plan to build a new tunnel is a key component of the Gateway Program, a series of rail infrastructure improvements intended to double the number of passenger trains running under the Hudson River and improve the systems that are already present.

The denial of any agreement comes as a surprise. Last September, President Trump met with the governors of the two states as well as several Congress members to talk about issues of infrastructure, and representatives came out of the meeting feeling “optimistic.” Prior to that meeting, the administration had spoken positively about the project.

“The president is a New Yorker. He understands the issue very well,” Transportation Secretary Elaine Chao said in a hearing held last May. “Please be assured that Gateway is an absolute priority in terms of our focus.”

The agreement reached by the state governors and the federal government came out of a joint letter by then Governors Chris Christie and Andrew Cuomo to President Obama, agreeing that they would pay 50 percent if the Obama administration paid the other half. Total cost estimates for the Gateway project range anywhere between 11 and 20 billion, although Amtrak's official website claims it is too early in the development of the project to come to a true reliable estimate.

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