The Lackawanna Cutoff rail project from Pennsylvania through northwest New Jersey was included last week in new federal transit legislation that labels it as one of the Garden State's key rail projects for future funding.

The legislation also includes about $11 million for eight other major transportation projects in Morris and Sussex counties, according to U.S. Rep. Rodney Frelinghuysen (R-11th Dist.).

A proposed $200 million Lackawanna Cutoff would link the Poconos and New York City with a passenger railroad that restores an abandoned rail link in Sussex and Warren counties.

The new legislation, which now goes to the U.S. Senate, would for the first time include the Lackawanna Cutoff as part of the reauthorization of New Jersey's "urban core." That infrastructure core includes what are considered critically important mass-transit projects such as the Newark-Elizabeth rail link and Hudson-Bergen light rail.

"This is a pretty important step to set up the (Lackawanna Cutoff) project for future funding eligibility," said Steve O'Hallaran, a spokesman for Frelinghuysen.

The rail line, which would have an estimated 684,000 riders daily, would parallel traffic-clogged Route 80, hopefully reducing traffic and air pollution, according to proponents.

A $2.5 million federal allocation was approved earlier this year to finance completion of all environmental and other study requirements of the Federal Transportation Administration, with a goal of moving the project to the engineering stage this summer, according to Morris County Transportation Director Frank Reilly, who chairs a bistate panel on the plan.