- The Port Authority of New York and New Jersey has revealed a slimmed-down budget for 2021, which includes a reduction in capital construction spending. The $2.4 billion earmarked for construction spending in 2021 is $1.2 billion less than the contemplated amount for the year in the authority’s 10-year capital plan.
- The $7.3 billion overall 2021 budget, which represents a $1.3 billion reduction from 2020, also slashes jobs and cuts into retirement benefits for employees. Port Authority officials blamed the budget cuts on the COVID-19 pandemic, which caused 2020 revenues to fall flat following high traffic volumes in 2019.
- The proposed budget will be an action item on the Board of Commissioners’ Dec. 17 meeting agenda.
The Port Authority oversees aviation, rail, surface transportation and seaport facilities in the New York City area. Although it's not clear which projects would be impacted by the cuts, Executive Director Rick Cotton indicated that those under construction now — including LaGuardia and Newark airports and their accompanying AirTrains — would continue, according to NorthJersey.com.
Due to the intense drop in vehicle traffic and passengers from the pandemic, the Port Authority is expecting a $3 billion revenue loss by 2021, according to NJ.com.
Unlike the Metropolitan Transport Authority, the Port Authority said it is not considering increasing tolls, fees or fares. The fees were raised in Sept. 2019 for funding a $37 million capital plan.
The one bright spot, officials said, is that cargo volume is expected to rise over 2020’s record levels.
The Port Authority is far from the first major organization to slow or halt projects. Other massive projects have been impacted, public and private, across the country.
Construction at FG LA's $9.4 billion Sunshine Project petrochemical plant in Louisiana was put on hold in October due to the continuing impacts of the pandemic, the company said. Construction plans for Foxconn’s $10 billion LCD manufacturing plant in Wisconsin are all but dead as well, and, earlier this month, Chinese development company Oceanwide Holdings stopped construction on the second tower of its $1.6 billion Oceanwide Center project in San Francisco.
San Francisco International Airport also announced it will postpone more than 20 construction projects in order to defer $550 million in debt service as passenger activity continues to crater.
Although construction mostly has soldiered on through the pandemic, the most recent wave of COVID-19 cases is impacting the industry. According to a survey from the Associated General Contractors of America published in October, 75% of contractors said they’d had projects pushed out or nixed, up from 60% in August and 32% in June. Only 23% reported working on new or expanded jobs.
“The survey results make it clear that the months-long pandemic is undermining demand for projects, disrupting vital supply chains and clouding the industry’s outlook,” AGC Chief Economist Ken Simonson said during a virtual news conference.