The Port Authority of New York and New Jersey approved a $7-billion preliminary budget last week that covers operating and capital expenses for 2012. The budget is subject to ongoing review and an internal audit, the agency says.

Capital spending will account for $3.66 billion of the budget. This includes funding for improvements to transportation facilities including airports, bridges, tunnels, and Port Authority Trans-Hudson (PATH) trains. It also includes a continuation of funding to the World Trade Center project.

The agency’s 10-year capital budget is $25 billion with about $10.7 billion of that dedicated to its interstate transportation network, an agency spokesperson says. The remainder will be used for upgrades to airports, seaports and the WTC, he adds.

In September, PANYNJ implemented Hudson River-crossing toll and fare hikes to help raise revenue. “When we made the difficult decision earlier this year to ask our customers to pay more in tolls and fares, we did so with a singular purpose: to deliver upgrades and enhancements that directly benefit those same customers,” says Bill Baroni, PANYNJ executive director, in announcing the budget last week.

The hikes have drawn controversy from the public and some groups including the American Automobile Association of New York, which is suing the agency for planning to use the revenue for non-transportation projects, including the WTC site.

However, in recent legal filings the PANYNJ says it will use the revenues only for its interstate transportation network and not for the WTC project, according to media reports.

AAA and PANYNJ argued their cases at a Manhattan federal court hearing on Dec. 8.