Date: Aug 20, 2011
Press Release Number: 96-2011
Good Morning Mr. Chairman and Fellow Commissioners:
When Governor Andrew Cuomo appointed Commissioner Scott Rechler and me to serve on the Board of The Port Authority of New York and New Jersey, we knew this to be an organization with an extraordinary historic mission and a fine record of accomplishment. We knew of its pioneering leadership in the construction and operation of complex transportation systems and its reputation as an "engine of economic growth" for the
bi-state metropolitan region. You can imagine our surprise when we found that we had arrived just in time to participate in complex deliberations for controversial trans-Hudson toll and fare increases.
On September 11th, 2001 the destruction of the World Trade Center dealt a crippling blow to the economic strength of the Authority. As the landlord of what has become a national symbol of pride and patriotism, the Authority has undertaken a Herculean effort to lead the rebuilding of a project which is now estimated to cost in excess of $11 billion. Further, as mentioned by the Authority's CFO previously, over the last 10 years $6 billion of dollars has been spent to safeguard our airports, tunnels, bridges, rail lines and marine terminals from further indiscriminate acts of terrorism. Unfortunately no incremental return has been generated by these major and costly initiatives.
As Commissioners we are faced with several dilemmas simultaneously. The Authority has proposed significant increases in order to address a potentially destabilizing debt capacity issue. Without additional revenue to support incremental borrowings, the Authority will be unable to complete current projects, execute its long term Capital Plan, and maintain satisfying jobs for the people of New York and New Jersey. At the same time, with the substantial current softness and difficulties in our economy, many citizens would prefer no increases.
Commissioner Rechler and I take our fiduciary responsibilities very seriously and Governors Cuomo and Christie would expect nothing less. Thus we have concluded, after significant review and analysis of a multitude of business, legal, financial, environmental, recreational, and congestion pricing considerations, as well as issues impacting the lives of individual commuters and small business owners, that the Board of Commissioners should authorize the proposed $4.50 toll and fare increases as revised and announced here today.
In this economic climate however, a toll and fare increase should go forward only if it is coupled with the enactment of significant austerity measures to contain and rescind some of the previous business decisions and fiscal practices. As a condition for the Governors not vetoing the proposed toll and fare hike, the Commissioners will commence a comprehensive financial and operating review of the Authority. It will also focus on the Authority's 10-year Capital Plan to further reduce its scope and cost along with a bottom-up management review to define and implement ways to lower costs as well as increase efficiencies.
Taken together, these initiatives should ensure the completion of the World Trade Center as well as hundreds of other capital projects. This in turn will reinforce the safety and economic viability of the region's transportation system which millions of New York and New Jersey residents have come to rely upon and will improve the likelihood that the Authority will retain its current AA- investment grade rating, thereby reducing its borrowing costs now and for the next decade.
In conclusion, Commissioner Rechler and I recognize that the Authority must maintain its financial strength and reputation to be able to access today's volatile financial markets on the most cost-effective basis. Nevertheless, many families in the states of New York and New Jersey are themselves dealing daily and directly with financial stress. It is the Commissioners, who are responsible ultimately for "balancing the equities" involved here, and I want to thank them and the Authority's management for working closely and successfully on this challenging effort.
Thank you, Mr. Chairman
The Port Authority of New York and New Jersey
The Port Authority's tunnels and bridges – the George Washington, Goethals and Bayonne bridges and Outerbridge Crossing and the Lincoln and Holland tunnels – were fully reopened by Sunday afternoon. The PATH system resumed regular service at 4 a.m. today. LaGuardia Airport reopened to arriving and departing flights at 7 a.m. John F. Kennedy International and Newark Liberty International airports reopened for arriving flights at 6 a.m. and for departing flights at noon today.