The Port Authority of New York and New Jersey has authorised its 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), to stablise operations during the COVID-19 pandemic.
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 Port Authority stands to lose approximately $3 billion in revenue as a direct result of the COVID-19 pandemic. Since the outbreak and subsequent lockdown, traffic, in particular passenger traffic, has collapsed.
“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.
“We thank both states’ Congressional delegations for their hard work in supporting the Port Authority’s request to add multi-state agencies as eligible entities for Federal Reserve support through the Municipal Liquidity Facility.
“In particular, we thank Senator Chuck Schumer (D-NY) and Senator Bob Menendez (D-NJ) for their leadership in the Senate in securing this eligibility, and we also thank Congressman Jerry Nadler (D-NY) and Congressman Albio Sires (D-NJ) for their leadership in the House,” Rick Cotton added. “We also appreciate the engagement from the Federal Reserve professional staff on this issue.”
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.
“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.
“Federal assistance is key to moving this region out of crisis and into recovery. 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.”