Port Authority, NJ Transit seek bailout funds amid COVID-19 battle
The Port Authority of New York and New Jersey and New Jersey Transit both requested federal bailouts as revenues plunge because of the COVID-19 pandemic.
They asked for $1.9 billion and $1.25 billion, respectively, last week. The two agencies have also joined a coalition of U.S. mass transit entities in seeking a $25 billion relief package for COVID-19-related support.
Port Authority Executive Director Rick Cotton sent a letter last to New York and New Jersey congressional representatives stressing the need for nearly $2 billion in aid following sharp revenue declines in March across its various transportation assets. Cotton said vehicle traffic on the bi-state agency’s crossings is down 22% compared to a year ago while ridership on the PATH rail transit has dropped 75%.
Passenger volume throughout Port Authority’s airport system has also fallen more than half compared to March 2019 average weekday levels with threats of continued declines while the nation confronts COVID-19. The Port Authority operates New York City's three major airports, Kennedy, LaGuardia and Newark-Liberty.
“As a fundamental component of the New York and New Jersey metropolitan region’s transportation network, the Port Authority will require federal assistance to continue fulfilling its mission at the service levels the region depends upon and requires," Cotton said in his letter. "Additionally, our tenants are requesting fiscal relief from rents and charges as their industries contract under the strain of this pandemic.”
The Port Authority is one of the nation’s largest municipal bond issuers and had around $22.1 billion in outstanding bonded debt at the end of 2019. The transportation agency’s bonds are rated Aa3 by Moody’s Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.
NJ Transit CEO Kevin Corbett drafted his letter to New Jersey’s congressional delegation after the agency experienced a system-wide ridership dip of 88% in 10 days. The nation’s third largest commuter rail network is facing a $1.25 billion budget gap by the end of the 2021 fiscal year resulting from lost revenues and “unavoidable” COVID-19-related costs, according to Corbett.
Janna Chernetz, the Tri State Transportation Campaign’s senior director of New Jersey policy, said NJ Transit’s passenger drops amid COVID-19 underscores the agency’s over-reliance on passenger revenues, which comprise 39% of the agency’s operating revenue. While this is an improvement from 51% in 2016, Chernetz noted that it is still below the 28% to 32% average at other transit agencies.
“The dip in passenger revenue was drastic and it came fast,” Chernetz said. “Any dip can throw their whole budget out of whack.”