Gateway tunnel would see first federal funds in Biden budget

The long-stalled, $12.7 billion Gateway tunnel project linking New York and New Jersey would see its first infusion of federal funding under President Joe Biden’s 2023 budget unveiled Monday.

The money would mark the first tranche of an expected $5.6 billion of federal dollars promised for the high-profile project. The Biden Administration has said the Gateway project is of “national significance” and a top priority after Trump officials stalled it for years.

The Gateway Program funding is allotted under the Federal Transit Administration’s Capital Investment Grants program, the federal government’s primary financial resource for supporting transit capital projects.

Victor J. Blue/Bloomberg

Biden’s FY 23 CIG proposal totals $2.85 billion. When combined with Infrastructure Investment and Jobs Act funding, the budget provides a total of $4.45 billion in CIG dollars to advance 15 major transit projects in seven states, including the Gateway project.

The CIG funding’s largest allocation is $400 million for New York City’s Second Avenue Subway extension. The Los Angeles Westside Subway Sections 1,2 and 3 would see a total of $663 million under the budget proposal.

Overall, Biden’s FY23 budget features $142 billion for the U.S. Department of Transportation to spend in FY23. That includes $105 billion in new appropriations and $37 billion in advance funding from the IIJA. Nearly half of that, $69 million, would go to highways. Aviation would see $23.9 billion; mass transit $21.1 billion; and railroads $17.9 billion.

After years of being stalled by the Trump Administration, the Gateway Program advanced on several fronts over the last year though it still lacks a final financing package.

FTA Administrator Nuria Fernandez said Monday that the money was “an affirmation that they’re on the right track,” according to local reports.

The new funds will not be allocated until the project sponsor meets statutory requirements for receipt of federal funds, according to the U.S. DOT.

In May 2021, the Federal Railroad Administration approved its environmental impact statement and granted a record of decision, clearing the way for preconstruction work like property acquisition. In December 2021, the project cleared the last regulatory hurdle when it won a permit from the U.S. Army Corps of Engineers for construction of the new tunnel. The permit allows construction to begin once funding is in place.

In January 2022, the FTA upgraded its rating on the project, which made it eligible for federal CIG funding.

The Gateway project creates rail infrastructure between Newark NJ and Penn Station in New York City along the Northeast Corridor, the most heavily used passenger rail line in the U.S. The Northeast Corridor contributes 20% of the national GDP and directly connects rail traffic between eight states and the District of Columbia.

The work is a joint undertaking among the Gateway Planning Development Corp., Amtrak, NJTransit, the Port Authority of New York and New Jersey, and the states of New York and New Jersey. It will build a new two-track rail tunnel under the Hudson River to connect the Bergen Palisades in New Jersey to Penn Station in New York City. The project also includes the full rehabilitation of the existing North River tunnel, which is 111 years old and was badly damaged by Superstorm Sandy in 2012 and the replacement of the Portal Bridge in Secaucus.

The $12.3 billion price tag includes $10.1 billion for the new tunnel and $2.2 billion for the existing tunnel's rehab.

Financing includes the $5.6 billion of federal funds and $6 billion from the local partners, including the states of New York and New Jersey and the Port Authority of New York and New Jersey. Amtrak has committed to up to $1.4 billion.

The FTA says the financing package will include Railroad Rehabilitation and Improvement Financing Loans: $2.5 billion that will be repaid by New York State, $2.3 billion repaid by the Port Authority of New York and New Jersey and $1.7 billion repaid by New Jersey.

The CIG funding will “provide historic and generational investments in public transportation that will enable our communities to provide access to opportunities and create family-wage jobs, advance equity, and tackle climate change," said American Public Transportation Association President and CEO Paul P. Skoutelas.

Ultimate budget authority rests with Congress.