Funding Forecast: Cloudy with a Chance for More Cuts

The contract tower program is safe, at least for now.

But the budget sequestration that ignited funding cuts to the contract tower program is not going away any time soon. Sequestration’s a decade-long deal designed to chop 5 percent of total spending government-wide. The question on everyone’s mind as we settle into a summer with fewer air traffic control delays and hopefully safer airports is: What happens when the money runs out on September 30? Will we again face a meat cleaver approach to cost cutting that threatens to cripple the industry, or has everyone learned their lesson … enough at least to prevent future tower closures and FAA air traffic controller furloughs?

The simple answer, of course, is that with a federal budget currently resembling a moving target, no one is really sure what will happen next. But most experts agree the aviation industry cannot remain healthy, much less thrive, under the instability of an annual race for dollars.

J. Spencer Dickerson, executive director of the U.S. Contract Tower Association, explains some of the basics. “First the continuing resolution needs to be dealt with for the entire government. Usually funds [for programs like the contract towers] are set at previous levels, but that’s uncertain right now,” he says. “Furloughs will be back in play again though.”

Adds the Reason Foundation’s Director of Transportation Policy Bob Poole: “The sequester is built into the Congressional Budget Office’s (CBO) baseline.” Because the initial implementation of the sequester didn’t begin until well into Fiscal Year (FY) 2013, the system was required to absorb the entire 5 percent cut in six months, making it feel like a cut of 10 percent. “The cuts won’t seem as dire next year though,” he says, “but they will be a problem unless Congress replaces [the sequester] with something else.”

When Airport Business queried the FAA about air traffic control post-September 30, an agency spokesperson quickly responded: “President Obama’s budget does provide funding for the FAA to keep the towers open and the Midnight shifts staffed at the roughly 70 affected airports. We can’t speculate on whether these services will continue next fiscal year until the FAA has final FY 2014 funding.”

Texas Department of Aviation’s (TexDot) Director of Aviation Dave Fulton was considerably more succinct about the depth of the problem the industry faces. In this state, the initial cuts would have halted federal funding at 14 of its contract towers. “Business aviation is huge in Texas,” he says. “We’ve seen considerable traffic using our reliever airports (the primary targets of contract towers cuts). Some airport managers told me they stood to lose airport tenants if the towers closed.”

 

Counter Moves

Texas Gov. Rick Perry, himself a former C-130 pilot, grabbed a leadership role early on in the contract tower debate by asking that state’s aviation commission to fund the cost of the towers. Texas’ price tag would have been $2 million for each 90 days of continued service, a figure the state could absorb, but only in the short run.

While a state willing to pick up the tab certainly represented good news to tenants and employees at the affected airports, the move would also have set a precedent some states were not keen to follow, fearing the complete loss of future federal funding once they paid the first dime. Some state officials (who preferred not to be named) told Airport Business they were simply not willing to throw in the towel and commit to permanently funding towers locally.

“The thought of the FAA trying to shove this all back on the states worried me too,” says Fulton.

 

Safety in the Air

If the threat of contract tower cuts reappears in the government’s FY 2014 budget, the 40 odd lawsuits filed this year on behalf of the individual airports affected are certain to come back as well. Within those suits, the principal argument was that the FAA needed to prove the cuts would not adversely affect air safety.

The quagmire for the FAA then becomes, if control towers are necessary for airport safety, how could the agency possibly be attempting to cut them out of the National Airspace System (NAS) without first conducting a thorough audit of how those shutdowns might affect airport operations? Or, if the towers were never necessary for safety reasons, why did the FAA support the contract tower program in the first place?

These legal issues certainly made Fulton wonder from Austin. “What concerned me the most is that there are 251 contract towers in the program that handle 30 percent of towers operated in the United States. And the FAA says that [cutting most of them] wouldn’t affect safety, which is somehow confusing to me. We [originally] built those towers for safety and economic development.”

When the FAA announced the potential closings in March, Administrator Michael Huerta claimed the agency had analyzed the safety issues and concluded safety was not a concern, a finding industry experts doubted considering the workload involved in reviewing data from hundreds of airports. Then too, there were the public comments from many airport managers claiming no one from the FAA had ever contacted them to so much as discuss safety issues before making a shutdown decision.

Whose Responsibility?

Fulton spoke to another critical element in the contract tower debate: “ATC is not bounded by geography. It has always been a national responsibility and to say that this not a federal responsibility makes no sense to me. The FAA’s own audit said they provide comparable service at much less cost.”

Poole raised another concern that he’s spoken on time and again over the past decade … privatization of the ATC system. “I think the perspective on ATC privatization has changed recently. People are really fed up to their eyeballs with the Administration,” he says. “I think this [contract tower issue and controller furloughs] has been a wakeup call to everyone, especially since the Airport and Airway Trust Fund was set up from the beginning specifically to protect the system against these kinds of problems.”

Despite the value of organizations like the Contract Tower Association and other alphabet groups, no one should depend on one group to handle the necessary heavy lifting to prevent a repeat of the financial and operational chaos the system just avoided. “I don’t think this was a scare tactic either,” Dickerson says. “We and 40 airports didn’t think safety should have been politicized. We won the battle but the war continues.”

Jennifer Imo, executive director of the General Aviation Airport Coalition, which claims over a hundred general aviation airports as members, says, “Airport managers should be assessing all of their options right now. They should be calling their congressional delegations to advocate for continued federal funding for the contract tower program in FY 2014, and mobilizing local supporters to do the same. They should be talking to local leadership about budgeting to pay controllers past FY 2013, doing benefit/cost analyses of continuing towered operations—with or without federal funds, and researching the latest technology that provides remote ATC operations for multiple airports—sharing and lowering the cost of operations.”

The fight is not over by any means, stresses Poole.

“Unless something happens [in Congress] to change things, this will start all over again this September for FY 2014,” he says. “I’d be working right now with the Contract Tower Association to develop a funding solution to cover the cost. If you believe the rhetoric that the contract tower program represents a viable option, how can you as a good manager not develop a contingency plan?”

 

About the Author

Robert Mark ,CEO, CommAvia

Mark, a 35-year aviation-industry thought leader, is CEO of CommAvia, a marketing communications group that delivers leading edge media to the aviation industry, and author of the award-winning industry blog, JetWhine.com. Mark, a commercial pilot who has logged 7,000 flying hours in airliners and business jets, as well as dozens of small training aircraft, is uniquely poised to write about the air traffic control tower issue. He spent 10 years as an air traffic controller and supervisor with the FAA. He can be reached at rmark@commavia.com.

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