Port Authority: $7.9B Budget Shows Signs Of COVID Recovery

NEWARK, NJ — The wheels of economic recovery may be slowly starting to turn for the Port Authority of New York and New Jersey, officials say.

On Thursday, the Port Authority of New York and New Jersey released its proposed 2022 budget, which comes to $7.9 billion. That total includes $3.4 billion for operating expenses, $2.7 billion for annual capital spending and $1.8 billion for debt service and deferred expenses.

Spokespeople said the proposed budget reflects the “ongoing impact of the COVID-19 pandemic on the Port Authority’s financial condition.”

The agency reported a major cash crunch in 2020 because of the pandemic. Read More: Port Authority Faces Huge COVID Cash Crunch, Seeks Short-Term Fix

But things may be starting to look brighter this year, spokespeople said. According to the Port Authority:

“The proposed 2022 budget investments are supported by a substantial increase in projected revenues in 2022, reflecting the agency’s ongoing activity recovery from the COVID-19 pandemic, even as all budget levels remain significantly below pre-pandemic projections.”

Toll rates for autos and trucks, as well as PATH fares, will remain unchanged in 2022. There will be other toll increases however, including:

• A toll increase of $3 per bus, effective in January 2022
• Based on an automatic inflation increase, a 25-cent AirTrain fare increase, also effective January 2022

The Port Authority is seeking public comment on the proposed 2022 budget, which is available online here. The proposed 2022 budget will be on the agenda for action at the board of commissioners’ meeting on Dec. 16.

The public can submit written comments here on the proposed 2022 budget by Dec. 10.

“The board’s proposed 2022 budget pragmatically balances the growth we anticipate in the year ahead with the realities the pandemic has imposed on us – reduced revenues and operational adjustments that have enabled us to continue to move the region forward in the most efficient way possible,” said Port Authority Chairman Kevin O’Toole.

Despite the light at the end of the tunnel, the agency isn't home free yet, Port Authority Executive Director Rick Cotton said.

“The agency continues its recovery from the extreme revenue loss due to the impact of the pandemic, and the challenges COVID-19 has imposed remain significant,” Cotton said. “The proposed 2022 budget will prudently and responsibly help us rebuild, sustain and enhance critical operations and services in the year ahead.”

Other budget information released by the agency on Friday includes:

CORE OPERATING EXPENSE BUDGET

According to the Port Authority:

“The proposed core 2022 operating expense budget, totaling $3.4 billion, reflects a core increase of $211 million, or 6.6 percent versus the 2021 austerity operating expense budget. The 2021 austerity operating expense budget reduced the agency’s head count by 626 positions (7 percent) and carried forward approximately $190 million of cost reductions implemented in 2020 (in addition to making further cost reductions needed to offset unavoidable contractual and structural increases elsewhere), among other reductions.”

Officials said the proposed core 2022 operating expense budget holds the head count flat to the reduced 2021 levels and provides for inflation-based growth for labor and contracts, non-discretionary contractual increases, and targeted incremental spending to:

• prudently restore resources reduced as a result of lower activity volumes at the height of the pandemic in relation to the ongoing activity recovery;
• make incremental security investments including funding for two new police classes (necessary to maintain the size of the police force after considering retirements) and additional cyber security protections;
• invest in new projects and initiatives, including innovative demonstration projects, sustainability initiatives to advance the agency’s new net-zero commitments, and revenue generating and customer experience projects.

CAPITAL SPENDING BUDGET

According to the Port Authority:

“The proposed 2022 capital spending budget of $2.7 billion reflects an increase of $316 million, or 13 percent versus the 2021 austerity capital spending budget. This proposed 2022 capital spending budget phases in additional spending in a fiscally prudent manner from the reduced spending levels in 2020 and 2021 that were necessary as a result of the adverse impacts of COVID-19 on the agency’s cash flow and financial position. This proposed 2022 capital spending budget advances the agency’s pre-pandemic commitment to rebuilding the region’s aging infrastructure.”

DEBT SERVICE/DEFERRED EXPENSE BUDGET

According to the Port Authority:

“The proposed 2022 debt service and deferred expense budget of $1.8 billion reflects an increase of $74 million, or 4.5 percent versus the 2021 debt service and deferred expense budget. This increase is driven by the schedule of borrowing required to help fund the capital plan, in addition to an increase in deferred expenditures to fund sustainability initiatives, vehicle purchases and replacements (including electric vehicles and buses), and planned technology investments.”

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