US port facing US$3bn loss seeks support

The Port Authority of New York and New Jersey (PANYNJ) announced that its Board of Commissioners has authorised management to apply for support from the Municipal Liquidity Facility, a new program created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

“The Municipal Liquidity Facility is an important and critically valuable short-term backup financial resource as the agency manages its cash flow during this crisis,” said Rick Cotton, executive director of PANYNJ.

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 COVID-19 pandemic.

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.

Federal grant support

Congress is now considering additional legislation to provide direct grant support to replace revenues lost by state and local governments as result of the crisis. The Port Authority has made an urgent plea to Congress asking that multi-state agencies, as key local government agencies, be made eligible for direct federal support in the same way that multi-state agencies were made eligible for the Municipal Liquidity Facility.

The Port Authority is seeking federal aid to enable it to proceed with developments including capital construction spending. In March it confirmed it was seeking federal support of US$1.9bn.

“In the face of an estimated $3 billion in revenue losses, the Port Authority is exploring every option: a short term loan through the Municipal Liquidity Facility would provide immediate liquidity relief, while direct funds through the next aid package are needed to enable the agency’s capital construction projects to provide vigorous support to a strong economic recovery,” said Kevin O’Toole, port authority chairman.