The bi-state agency that oversees Newark Liberty International Airport and the Hudson River crossings plans to borrow money under a federal lending program as the COVID-19 pandemic shatters ridership and virtually all types of travel.
Airport traffic dropped 97 percent, rail ridership at the PATH commuter line dropped 95 percent and tunnel traffic – including the Holland and Lincoln tunnels – fell 40 percent, the Port Authority of New York and New Jersey said in a Thursday morning statement. That spells out a $3 billion hole in revenue over the next two years, out of the agency’s $8.3 billion budget.
“During this period our operating volumes have plunged to levels we have not seen before,” Port Authority Executive Director Rick Cotton said at the agency’s live-stream meeting in April.
Cargo shipments in and out of the agency’s seaports dropped 22 percent, Cotton said, as the pandemic and ensuing recession indefinitely disrupt long-standing global trade routes.
Under the Federal Reserve lending program, the Port Authority would sell bonds to the U.S. central bank to shore up finances and provide the cash-strapped agency with immediate funding.
It is not clear how much the bi-state agency would borrow under the program, as Port Authority officials did not immediately respond to inquiries.
But the agency has maintained that it needs federal funding under future federal rescue packages, which spell out the latest political showdown in Washington.
Both the Trump administration and U.S. Senate Republican leadership have shown resistance to dolling out federal aid to states whose budgets and tax revenue have nosedived because of the pandemic.
Under the $2.2 trillion Coronavirus Aid, Relief and Economic Security Act, which U.S. President Donald Trump signed in late March, PANYNJ’s five airports are eligible for a combined $450 million.
But PATH was left out of that round of funding, and Port Authority officials maintain that the agency would need far more federal dollars to stay afloat.
“In the face of an estimated $3 billion in revenue losses, the Port Authority is exploring every option,” Port Authority Board Chair Kevin O’Toole, an appointee of former New Jersey Republican Gov. Chris Christie, said in a Thursday statement.
“[D]irect funds through the next aid package are needed to enable the agency’s capital construction projects to provide vigorous support to a strong economic recovery,” he added. “Federal assistance is key to moving this region out of crisis and into recovery.”
New Jersey Transit – and more broadly the entire state – are facing much similar woes.
For NJ Transit, the agency was finally okayed to receive $1.4 billion under the CARES Act, which would go to the agency as it seeks reimbursement for eligible projects.
That’s on top of an additional $1.2 billion that the cash-strapped agency, which has seen near triple-digit drops in ridership, argued needed to be included in future federal aid packages.
For New Jersey, the state is facing a $10 billion shortfall in revenue through June 2021, plus billions more in expenses for the response to COVID-19 and for beefing up the state’s health care infrastructure, according to the Murphy administration.
Murphy officials are looking to borrow $5 billion from the same Federal Reserve program to provide immediate cash. And they are counting on billions of dollars more in federal aid under a new CARES Act bill.
The administration is planning to cut or delay $5.3 billion in spending through Sept. 30, the end of the current, extended budget year, because both funding mechanisms are up in the air.