Port Authority Faces Huge COVID Cash Crunch, Seeks Short-Term Fix

ESSEX COUNTY, NJ — As Port Authority officials scramble to plug an estimated $3 billion revenue gap from the COVID-19 outbreak, they’re leaving no stone unturned, including a new Coronavirus Aid, Relief, and Economic Security Act (CARES) Act program that may give the struggling agency a short-term cash boost.

On Thursday, the Port Authority of New York and New Jersey board of commissioners authorized management to apply for support from the Municipal Liquidity Facility, a new program created under the CARES Act.

Here’s how it works, according to the Port Authority:

“The Municipal Liquidity Facility enables the Federal Reserve to take action to stabilize the municipal bond market by buying bonds and serving as the lender of last resort to eligible issuers of municipal bonds. The Municipal Liquidity Facility enables the Federal Reserve to buy bonds of eligible state and local government entities to help them manage cash flow stresses caused by the coronavirus pandemic. The original CARES Act did not include multi-state agencies in the list of eligible entities. The final version of the CARES Act was amended to make multi-state agencies - including the Port Authority of New York and New Jersey- eligible for Municipal Liquidity Facility support.”

Port Authority Executive Director Rick Cotton, who had his own bout with the disease in March, called the new program an “important and critically valuable short-term backup financial resource.”

Cotton thanked Sen. Bob Menendez and Rep. Albio Sires of New Jersey, and Sen. Chuck Schumer and Rep. Jerry Nadler of New York, for supporting the Port Authority’s request to add multi-state agencies as eligible entities for the program.

Port Authority officials say the agency is facing an estimated $3 billion in revenue loss over a 24-month period as a result of the coronavirus pandemic, which means a hazy future for some key projects at its airports, bus terminals and PATH stations.

• See related article: Port Authority May Lose $3B From Virus; Big Projects In Jeopardy

The agency gave a grim update on the situation Thursday:

“Airport traffic is down 97 percent; PATH commuter rail ridership is down 95 percent; bridge and tunnel traffic is down over 40 percent. This collapse in traveler volume continues to produce enormous revenue declines. The Port Authority is seeking federal aid to enable it to proceed with its capital construction spending, be a driver of the desperately needed economic recovery, and pursue its agenda to bring 21st century transportation facilities to the region.”

Port Authority Chairman Kevin O’Toole said that a short-term loan from the Municipal Liquidity Facility would provide immediate liquidity relief. But direct funds through the next aid package are needed to help the agency – and region – recover from the effects of the coronavirus outbreak.

“Federal assistance is key to moving this region out of crisis and into recovery,” O’Toole said. “We look forward to doing our part to spur economic recovery and job growth while building the critical infrastructure New Jersey, New York and this nation deserve.”

READ MORE: NJ Coronavirus Updates (Here's What You Need To Know)

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