The bi-state operator of the region’s airports, marine terminals, PATH trains, and trans-Hudson bridges and tunnels continued to emphasize austerity in a proposed $7.9 billion 2022 budget, as air and transit travel revenues continue to lag below pre-COVID-19 levels.
The budget, introduced Thursday by the Port Authority of New York and New Jersey, continues to forecast an overall $3 billion revenue loss by early 2022 since the pandemic decimated travel and reduced some of the bi-state agency’s biggest revenue earners.
Tolls and PATH fares will not be increased, but travelers who use the Authority’s two Air Trains to reach Newark and JFK airports will see an inflationary 25 cent fare hike, which was part of the last fare increase package, officials said.
The budget is available on the agency website and comments will be taken.
As airport and PATH revenues continue to lag, officials reiterated earlier warnings that some projects not already in construction could be on the chopping block or delayed because of COVID-related revenue losses.
The agency is on track to lose a total of $2.7 billion since the beginning of the pandemic by the end of 2021, said Rick Cotton, authority executive director.
“That is what the capital plan is based on. There is no way to recover those losses,” he said. “We will look at how to manage that and that does mean some projects will need to be be deferred.”
But there is a possible savior for some — the recently approved $1 trillion Biden infrastructure plan.
As of now, the budget doesn’t include any potential aid from the Biden infrastructure bill because officials don’t know how much funding could be available for the Authority.
“The reason we’re still waiting is, what has not happened is the federal agencies responsible for distributing that money have not written their guidelines and regulations that will determine where the lion’s share of where these funds will go,” Cotton said. “We’re still grappling with that.”
But the Authority has stretched out the duration of the capital plan from a ten to 12-year plan, he said. The capital plan is still 24% lower than was envisioned in the agency’s reauthorized 2017 to 2026 capital plan, said Elizabeth McCarthy, chief financial officer.
The proposed $7.9 billion budget breaks down to $3.4 billion to cover operating expenses, a $2.7 billion capital budget and $1.8 billion to pay debt, she said on Thursday. The budget is “built off significant reductions in the 2021 austerity budget,” she said.
Gross 2022 revenues are projected to be $400 million less than pre pandemic projections, she said.
But officials are predicting the beginning of the end of pandemic losses.
“We’ll recapture 90% of (2019) air traffic at 126 million out of 140 million, pre-pandemic. Tunnels, bridges and terminals will exceed 2019 levels. PATH is a bit more of a struggle, ports have exceeded projections,” said Kevin O’Toole, board chairman. “The good news is we slogged through 2020 and 2021 and the projection is for 2022...things are nosing up. We’re coming back to pre-pandemic levels.”
Last December, Authority commissioners approved a $7.3 billion “austerity” 2021 budget that was $1.3 billion less than the agency’s $8.6 billion 2020 budget. The 2021 capital budget also was reduced to $2.2 billion, less than projected spending levels would have been before COVID-19 hit.
Authority officials have been largely unsuccessful in obtaining federal COVID aid, except for $450 million in CARES Act funds for airports, which had to be shared with airport tenants.
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Larry Higgs may be reached at lhiggs@njadvancemedia.com.
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