New Jersey leaders say they believe President Joe Biden’s proposed $2 trillion infrastructure plan can overhaul the state’s aging infrastructure and boost the state’s post-pandemic recovery. The package, known as the American Jobs Plan, is the second leg of the president’s effort to jumpstart the nation’s economy, following a $1.9 trillion relief bill in March.
Announcements of even more relief bills are expected in the weeks ahead. Some economists have characterized the latest plan as the largest federal economic intervention since President Franklin D. Roosevelt’s New Deal nearly a century ago.
New Jersey – the most densely populated state in the nation with myriad roads, bridges, tunnels, trains and pipes along with clean energy aspirations – stands to reap in much from the proposal. But the plan has been mired in partisan warfare since Biden unveiled the proposal. Republican lawmakers on Capitol Hill – who all opposed the American Rescue Plan – are vowing to do the same with this new proposal, which includes a higher corporate tax rate.
Gov. Phil Murphy, in a March 31 statement, said the plan “recognizes that tax fairness and ensuring equity for the middle class, and those struggling to join its ranks, must be a national guidepost.” In prior years, Murphy pushed for a millionaire’s tax, framing it as “tax fairness” and ensuring the “wealthiest among us pay their fair share.”
Murphy also cited the boost for the state’s burgeoning offshore wind sector, cash infusions to the state’s highways and the Hudson River tunnel proposal, and money for rebuilding many of the state’s schools, saying Biden’s proposal could “set us up for success for decades to come.”
“Infrastructure has always been something where we’ve had tremendous [return on investment], every dollar spent turns to much more than a dollar in the broader economy,” Greg Lalevee, business manager of the International Union of Operating Engineers Local 825, said in a recent interview. “Anything that the government can put into infrastructure spending is momentum for the entire economy.”
Amtrak is slated to get roughly $80 billion. That money could go toward projects across the nationwide transit agency, Lalevee noted. But the focus in New Jersey has been the Hudson River tunnel replacement, part of the broader $30 billion transit overhaul for the New York City metropolitan area.
Tony Coscia, Amtrak’s chairman, said he was ecstatic about the prospects for the ambitious project. “We’ve had lots of interactions with the new administration … and all have been very receptive toward working with us on the Gateway program” Coscia said of the project to repair and improve the rail connection between New York and New Jersey. “There is a clear recognition of the importance of the project and a willingness to be very engaged.”
He said there’s been a “significant difference” from the attitude of the Trump administration, which blocked the tunnel’s funding and slow-walked the approval of its environmental impact report. “There are a lot of people frustrated by the inability to advance significant capital projects” across the country “and I think they’re going to welcome the idea that a program like Gateway, that requires cooperation between different agencies, complicated engineering, significant amounts of money” can get off the ground.
Coscia said that officials working on major projects across the country may very well take the stance that “if these guys can figure out how to do it, if these guys can get it done,” then other work can be accomplished. “It puts us on the focus for ‘we can build this, we don’t have to throw our hands up and say it’s too complicated.’”
Amtrak put the current price tag for the new tunnel and the rehabilitation of the existing tubes at about $11.6 billion. The Portal North Bridge replacement is about $1.8 billion, for which Murphy was able to secure a 50% financing commitment from the federal government during the final days of the Trump administration. Amtrak estimated that the project cost for the tunnel has gone up by at least $1 million a day – $365 million a year for the past four years because of inflation – but officials are confident that they won’t cut any corners on the tunnel’s replacement.
In the pipeline
Nat Bottigheimer, the New Jersey director for the Regional Plan Association, estimated that there are dozens of infrastructure projects in the Garden State that could benefit from the federal funding. “It’s hard to think of any areas of infrastructure in the state that wouldn’t be touched by this,” he said in an interview. “The amount of money we’re talking about, just in transportation, represents a couple of years of capital funding in the state. It’s really an opportunity to make progress on a lot of fronts.”
New Jersey Transit has a $17 billion capital plan for overhauling its systems over the next five years, but roughly $5.7 billion of those projects lack funding. The plan includes the proposed 18-mile Glassboro-Camden Light Rail in South Jersey with a $1.7 billion price tag, electrification of NJ Transit’s 3,000 buses by 2040 and an extension of the Hudson-Bergen Light Rail in Bergen and Passaic Counties.
Biden’s plan would allocate $115 billion for repairs of roughly 10,000 bridges and modernization of roughly 20,000 miles of road. U.S. Rep. Josh Gottheimer, at an April 1 news conference, pointed to the aging Route 4 bridge over the Hackensack River, which was built in 1931. “It’s just one of the 502 bridges in New Jersey that are rated as structurally deficient, not to mention all our pothole-pocked roads,” Gottheimer said.
Biden has also pledged that his plan will “put plumbers and pipefitters to work replacing 100% of the nation’s lead pipes and service lines so every American, every child, can turn on a faucet or a fountain and drink clean water.” The proposal calls for $111 billion to replace lead pipes and modernize the state’s water infrastructure.
The issue exploded in 2019 following the Newark water crisis where water filters failed to stop lead from getting into residents’ drinking water. Although the city was able to replace these pipes, the pandemic has hindered statewide efforts.
The New Jersey Department of Environmental Protection has estimated that the state has at least 173,000 lead service lines, but environmental advocacy groups think the number is much higher. According to the NJDEP, a full-scale replacement would require $2.3 billion.
State advocates are confident the plan would be a major boost for New Jersey’s offshore wind and clean energy sectors, which Murphy has prioritized as promising industries. The Biden team said on March 29 that it will fast-track the application for Ocean Wind, an 1,100-megawatt wind energy project several miles off the coast of Atlantic City, which developer Ørsted said could power over half a million homes every year. That’s on top of a 2,400-MW offshore wind project under consideration.
In addition to the offshore wind farms, the state is moving ahead with a 200-acre “wind port” in Salem County, from which wind turbine components would be shipped to the rest of the country. And the state is pushing ahead a $250 million manufacturing facility for wind turbines based in Camden County along the Delaware River.
In all, Biden’s plan calls for $35 billion for clean energy and $20 billion on climate-focused research and development. “It’ll protect our community from billions of dollars of damage from historic super storms, floods, wildfires, droughts, year after year, by making our infrastructure more secure and resilient and seizing incredible opportunities for American workers and American farmers in a clean energy future,” the president said.
Ed Potosnak, executive director of the New Jersey League of Conservation Voters, said in a March 31 statement that the president’s proposal “protects our air and drinking water, accelerates our transition to 100% clean energy, and advances environmental justice.”
“The Biden Administration’s plan to invest in new infrastructure is the spark we need to get our economy back on track post COVID,” he continued.
Republicans have said they would prefer a skinnier version of the Biden’s proposal, one that would not be financed by tax increases. To them, Biden’s plan is a non-starter. And the nation’s corporate community is wary.
“Properly done, a major investment in infrastructure today is an investment in the future, and like a new home, should be paid for over time – say 30 years – by the users who benefit from the investment,” said Neil Bradley, chief policy officer for U.S. Chamber of Commerce, in a March 31 statement. “We strongly oppose the general tax increases proposed by the administration which will slow the economic recovery and make the U.S. less competitive globally – the exact opposite of the goals of the infrastructure plan.”
Rick Geddes, an infrastructure policy analyst at Cornell University and visiting scholar at the conservative-leaning think tank the American Enterprise Institute, questioned the connection between mass infrastructure spending and an economic rebound. “It takes a long time to deliver projects,” he said in an interview. “By the time you bid them out, you design them, plan them, get just to the construction stage … the economy is likely to have recovered from the business cycle. The business cycle is likely to have moved onward.”
Geddes acknowledged that there are certain large-scale projects ready to go and in a league entirely of their own, like Gateway. But not every infrastructure project in the nation is of that caliber. Infrastructure “is not something you can do quickly,” he suggested.
“If you do it quickly … the state and local [governments] are just going to do something that they can do quickly to get the federal money, and it’s not clear that those are the highest, net-social value projects. They could just be surfacing projects they can do quickly.”
But Makada Henry-Nickie, a governance fellow at the center-left Brookings Institution, insisted that infrastructure spending could make a difference. “This is firmly about investing our money in revitalizing our communities that we have talked ad nauseam about … racial equity and inclusion,” she said. “When the rubber hits the road, this is a down payment. This is the kind of scale of the investment it takes.”
She added: “Biden’s also saying ‘I don’t really care about the political calculus as to who wins, I care more about investing in our people and ensuring we make this space and use this moment when we’re all paying attention to … inequity’.”
For now, Biden will at least attempt to court votes from Republicans and moderate Democrats, an endeavor that ultimately failed with the American Rescue Plan. “Debate is welcome. Compromise is inevitable. Changes are certain,” the president said in presenting the plan.
Patrick Murray, who heads the Monmouth University Polling Institute, said Democrats are betting that should these spending plans could eventually garner Republican support in the months and years ahead. “They’ve got to see the benefits in order for this to work, and that is where Republicans and conservative Democrats who are worried about spending have kind of a leg to stand on,” he said.
“This is not one of those issues where there is this incredible public force being put on members of Congress,” he said of infrastructure spending and public transit.
And it might not be seen as a high priority compared to what could be in future Biden proposal, including “those bread-and-butter issues” such as health care affordability and reform. So the president might need to employ “a lot of salesmanship” to whip up public support.
“If we can build this stuff, you will get credit for it, and we might even get some Republicans to go along with it,” Murray continued. “That can move over a few folks, that can soften them to the Biden administration.”