A rendering of the new terminal to be built at LaGuardia Airport.

NEW YORK—The Port Authority of New York and New Jersey released on Tuesday the agency's proposed $3.4-billion 2020 Operating Expense Budget and a $3.6-billion capital budget for 2020.

The proposed 2020 Operating Expense Budget includes an inflation-based 1.9% increase of $64 million in core expenses versus the 2019 Operating Expense Budget. In addition, the preliminary budget provides an additional $62 million of incremental high priority spending that is comprised of 1) spending to achieve important upgrades in facility operations and in customer experience initiatives, 2) spending for Capital Plan construction project support and 3) spending that preserves or generates revenue.

The incremental high priority spending includes funds for multiple customer service initiatives as well as funding to crack down on illegal hustling at the airports, to enhance toll recovery activities, and to fund the PATH Improvement Plan. After consideration of the incremental high priority $62 million in spending, the proposed budget is $126 million (3.8%), higher versus the 2019 budget. The agency anticipates that the growth in operating expenses will be more than offset by the increase in gross operating revenues. The agency also expects that future year's operating expense spending growth will be in line with inflation, after excluding short-term high priority spending items.

"I want to thank agency staff for crafting a recommended spending plan that reflects inflation-based core expense growth of 1.9 percent and supports our most important strategic initiatives," said Port Authority Chairman Kevin O'Toole.

"This proposed budget is a fiscally sound, prudent spending plan that allows the agency to continue to address its priorities and standards, including rebuilding legacy facilities, upgrading to provide improved customer experience to the traveling public and continuing to assure a world-class level of safety and security at our transportation facilities," said Port Authority Executive Director Rick Cotton. "This proposed budget will support rapid, demonstrable progress to achieve our priority objectives."

The proposed 2020 Operating Budget includes funding to cover the agency's priorities, including:

• $787 million to provide world-class safety and security at Port Authority facilities, to upgrade cybersecurity initiatives and to enhance emergency operations. An additional $7.9 million above the 2019 budget is included to increase enforcement against unlicensed livery operators at the airports; to increase coverage for the Airport Unified Operations Centers and to increase police presence at the airports to manage traffic flow and other disruptions resulting from construction.

• $68 million to improve customer experience and to support increased volumes of activity at agency facilities, including an additional $10.4 million above the 2019 budget to enhance customer initiatives at airport terminals and at PATH.

• $76 million is included for targeted initiatives in several operating areas to achieve important operational improvements, including an additional $20 million for Newark AirTrain operational support and for AirTrain JFK for major repairs and maintenance, to advance the PATH Improvement Plan, and resources to implement the Port Master Plan. Another $15 million increase supports increased civilian operational support at facilities during construction, including traffic mitigation.

• More than $330 million is provided to support sustainability and resiliency efforts that reduce our environmental impact and enhance the resiliency of our facilities. Continued capital spending is included in the $3.6 billion Capital Budget, including $310 million for Superstorm Sandy projects for the rehabilitation of PATH substations and tunnels, for Aviation airfield lighting rehabilitation, and for Holland Tunnel's latent salt damage mitigation program.

To reduce Port Authority energy consumption, four large energy efficiency projects are underway across all facilities, with 9 additional projects under development. Approximately 15 megawatts of on-site solar projects are in design at JFK and LGA airports and PATH. The JFK project will include 10 megawatts of energy storage and 5 megawatts output of the solar system will be for the community benefit. $16 million to support the agency's Employer of Choice priority to retain, grow and attract top talent through employee training, development, recognition and compensation programs.

Major items in the proposed $3.6-billion 2020 Capital Budget include: $2.1 billion in aviation spending, including $1.5 billion to continue redevelopment of the agency's airports. At LaGuardia Airport, construction continues on building an entirely new airport, with the planned completion in 2020 of the Terminal B Headhouse and 70% of roadways, as well as planning and design for the AirTrain LaGuardia project.

At Newark Liberty International Airport, work proceeds on the construction of the new, Terminal One as well as planning for the new AirTrain Newark and a new Terminal Two. At John F. Kennedy International Airport, planning and early works construction continues to advance the redevelopment of the airport, including new and interconnected terminals, relocated, state-of-the-art cargo facilities and new airport roadways.

Other key items include:

• $739 million in spending on tunnels, bridges and terminals projects, including $471 million for upgrades to trans-Hudson crossings; the implementation of cashless tolling at the trans-Hudson crossings; advancement of the George Washington Bridge suspender rope replacement program; and further planning and design activities for a new Port Authority Bus Terminal.

• $389 million in spending on PATH, including $43 million for PATH's signal system replacement program, for the continuation of PATH station and equipment capital programs, and for vigorous implementation of the PATH Improvement Plan.

• $50 million for Port of New York and New Jersey projects, including $32 million to support construction and design activities at port facilities, completion of the Global Intermodal Container Transfer Facility, an environmental review for the Cross Harbor Freight Movement Program, and analysis and planning for critical wharf reconstruction work.

• $321 million at the World Trade Center campus, including $246 million for improvements to One World Trade Center, continued construction of the West Bathtub Vehicular Access Project; and continued construction of support infrastructure under the Performing Arts Center.

The proposed 2020 budget also includes $1.6 billion for debt service charged to operations and deferred operating expenses.

Instant Insights /

Port Authority Proposes Multi-Billion Dollar Operating and Capital Budgets

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