The Port Authority of New York and New Jersey says it will spend spend more than $2 billion less than it had originally anticipated for construction work in 2021, after COVID-19 decimated traffic and revenue.
In a statement, the authority said that its capital budget for 2021 will need to be $1.2 billion less than originally projected, a 33 percent reduction, on top of the $1 billion COVID-related underspend in 2020 capital spending.
Because of an estimated 24 month $3 billion revenue loss, the authority says its overall proposed $7.3 billion budget’s proposed $2.4 billion provisionally allocated for capital construction spending is 33 percent, or $1.2 billion, below the level contemplated in the agency’s Capital Plan for the year 2021. The proposed 2021 budget is comprised of $3.3 billion for operating expenses, $2.4 billion for capital expenditures, and $1.6 billion for debt service and other expenses.
Additional capital spending reductions in 2022 will follow if federal aid is not forthcoming, the agency says.
“I want to thank agency staff for crafting a recommended spending plan that reflects the realities of operating the agency in the midst of a global pandemic and supports our most important strategic initiatives,” said Port Authority chairman Kevin O’Toole. “The proposed 2021 budget shows the Port Authority, as it has for almost a century, is adapting to face new challenges while continuing to provide safe, secure and efficient movement of people and goods throughout the region.”
“Overall, the proposed 2021 budget is an austerity budget,” said Port Authority Executive Director Rick Cotton. “In the absence of federal aid, our $3 billion revenue loss has forced us to slash our capital spending allocation for 2021 by 33 percent. That is simply not enough to deliver the rebuilding projects contemplated in our Capital Plan. On the operating side, we have aggressively but prudently cut costs, while we maintain our commitment to high standards of cleanliness and customer service to ensure the safety and security of our employees and customers, all while maintaining high levels of service at all of our facilities.”