Port Authority Board Adds Nearly $5B for Critical Projects; Approves Toll Increases

NEW YORK—The Board of Commissioners of the Port Authority of New York & New Jersey approved a host of initiatives at its meeting on Thursday, including toll increases and nearly $5 billion in additional capital project spending.

In its biennial reassessment of the agency’s 2017-2026 Capital Plan, the board approved funding for a brand new AirTrain Newark and additional spending for AirTrain LaGuardia and the addition of three new projects—the PATH Improvement Plan; electric vehicle infrastructure and planning for a new Newark Liberty Terminal Two. The reassessment also involved adjustments to the capital plan regarding JFK’s redevelopment and the Newark Terminal One projects.

The increases in funding for its capital plan were proposed earlier this year.

“We have an unwavering commitment to rebuild the region’s aging infrastructure and have taken major strides forward, including the completion of the Goethals and Bayonne bridges, the opening of a new state-of-the-art concourse at LaGuardia Airport, and the opening of new head houses at the Harrison PATH Station,” said Port Authority vice chairman Jeffrey Lynford. “But the region’s transportation needs are far, far greater. That’s exactly why we approved this reassessment which will allow the Port Authority to advance these essential projects.

“The Port Authority is committed to rapid progress on all our critical capital projects to deliver the 21st century transportation infrastructure that the region deserves. The $37-billion Capital Plan that the Board approved today is part of that commitment,” said Port Authority executive director Rick Cotton. “This Capital Plan funds major infrastructure projects like the new AirTrain Newark, the AirTrain LGA and redevelopment at JFK and Newark and makes good on sustainability commitments, such as new, clean electric vehicle charging stations, the PATH improvement plan, and planning for a brand-new Terminal 2 at Newark Airport. Both the original 2017-2026 Capital Plan and the modifications approved today provide for extraordinary and unprecedented levels of investment needed to replace and upgrade our facilities to meet the standards of 21st century infrastructure.”

The specific changes to the Port Authority’s major projects include:

New AirTrain Newark ($1.64 billion increase; $2.05 billion total): The reassessed Capital Plan provides for a new AirTrain Newark for $2.05 billion. This represents an entirely new project. The new AirTrain project replaces the planned spending of $300 million to keep the old AirTrain in a state of good repair. The increase is informed by previously authorized planning efforts and will be covered by: airline cost recoveries; rental car fees; future period PFCs; farebox revenue; and $110 million of reduced spending elsewhere in the Aviation Capital Plan. This major new commitment is in direct response to a request from Governor Murphy. The proposal targets a start to construction in late 2020 or early 2021.

JFK Redevelopment ($1.9 billion increase; $2.9 billion total): Approximately $2.9 billion of the $13-billion JFK project will be spent on Port Authority infrastructure, e.g. roadways; airfield improvements; a ground transportation center; and utilities and electrical substations. The original 2017-2026 Capital Plan provided $1 billion for spending on PA infrastructure. This incremental cost of $1.9 billion is projected to be funded from private sector sources – rental revenue from private terminal developers and airline cost recoveries

AirTrain LGA ($390 million increase; $2.05 billion total): The reassessed Capital Plan provides for a $2.05-billion project to build an AirTrain to serve LaGuardia Airport. The current capital plan included $1.5 billion in spending for this project. The revised project cost is informed by the planning efforts and preliminary engineering analysis underway as a result of previously authorized spending by the Board. The increase to the Capital Plan is $390 million, net of $160 million of reduced spending on other Aviation projects. This increase is projected to be covered by multiple sources, including: farebox revenue; airline cost recoveries; and future period PFCs.

Newark Liberty Terminal One Redevelopment ($350 million increase; $2.7 billion total): In February 2018 the Board reauthorized this project because the total cost to complete the project increased by $350 million to $2.7 billion due to market conditions increasing construction costs. The additional funds required for this increase are projected to be fully provided by revenues from the new terminal.

PATH Improvement Plan ($200 million): As announced in June, the PATH Improvement Plan includes three core elements: increased capacity on the Newark-WTC line by 40% and all other lines by 20% by 2022; a six-point plan to reduce system delays; and a series of actions to improve customer experience including full integration with the MTA’s new tap-and-go fare payment system, OMNY.

Electric Vehicle Infrastructure ($50 million): These funds will provide the electric charging infrastructure needed to support the electric vehicle initiative, including: 1) infrastructure needed for the conversion of airport shuttle buses to an all-electric fleet; 2) the conversion of 50% of the agency’s light vehicle fleet to electric; and 3) charging stations for public use at various parking facilities.

Planning for Newark Liberty Airport Terminal Two ($35 million): Just as Newark Terminal A is currently being replaced by the new Terminal One, the reassessed Capital Plan enables planning to replace the existing Terminal B with a new Terminal Two.

The capital plan reassessment also evaluated the state of good repair projects in the agency’s portfolio to ensure adequate progress, proper prioritization, and sufficient capital capacity. Of the $4.8 billion increase, approximately $4.5 billion, or 94% of the increase, is projected to be funded by additional project-related revenues, including revenue increases from the following: terminal rents; airline cost recoveries; user fees; anticipated receipt of passenger facility charges; Hurricane Sandy recovery; and airport improvement grants associated with certain projects.

Toll Increases Approved

The Board of Commissioners also approved the first inflation-based adjustments to the agency’s tolls, fares and fees since 2015 in line with the inflation-adjusted schedule mandated by the Board in 2008 and reaffirmed in 2011. The automatic increases are triggered when the cumulative impact of inflation on existing toll rates reaches $1.00, as measured from the last increase. The cumulative impact of inflation since 2015 will reach this level in 2020, prompting an increase of the cash toll rate at all Port Authority crossings from $15.00 to $16.00, as of January 5, 2020. The adopted proposal also eliminates the E-ZPass discount for out-of-state accounts.

In addition, there will be changes to PATH’s fare structure with the PATH base fare remaining at its current $2.75 for a single trip but reducing the discount for PATH multi-trip fares. Increases to the AirTrain fares at JFK and Newark, which have not changed since 2003 and 2005, will go into effect later this year. An airport ground transportation access fee, to be implemented in late 2020, will be charged to all for-hire vehicles and taxis, consistent with the practice at peer airports. This fee was reduced from the originally proposed amount of $4.00 for for-hire drop-offs and pick-ups and $4.00 for taxi pick-ups to $2.50 for for-hire drop-offs and pick-ups; $1.25 for pooled for-hire drop-offs and pickups and an initial taxi fee of $1.25 per pick-up.