As the aviation community waits for the other shoe to drop, airports are hopeful that the next FAA reauthorization proposal treats them better that this week’s 2008 federal budget submission.
The Bush Administration’s outline for the FAA 2008 spending plan cuts the Airport Improvement Program (AIP) spending, again reduces the Essential Air Service (EAS) program, and fails to fund the Small Community Air Service Development Grant program. Furthermore, the Transportation Security Administration (TSA) proposed budget does not include any funding for the purchase of in-line Explosive Detection Systems (EDS) baggage screening equipment.
The FAA will soon submit legislation – perhaps as early as next week – that reauthorizes the agency for another three years. The administration has already says that it will seek a change in the funding mechanism for the FAA. It wants to end a reliance on the ticket tax paid by commercial airline passengers by also instituting a user fee to be paid by general and business aviation.
The Airports Council International-North America (ACI-NA) is not wading into the funding debate. It is not siding with the airlines or with general aviation, says Greg Principato, the ACI-NA president. “We have not taken sides in that debate. Our view is that everything is on the table.
“The current trust fund environment is not stable or predictable. It depends upon fares and traffic. If there is a fare war then the support for the system goes down. It does not make sense. If you are planning infrastructure improvements it is difficult to do in that environment,” Principato says.
Funding Airport Projects
The administration proposes cutting the AIP program by 27 percent next year. The AIP would be funded at $2.75 billion compared to the $3.5 billion it is slated to receive this year.
Congress is scheduled to enact a continuing resolution by Feb. 15 to fund the federal government, including the FAA, for the remaining months of the fiscal year at the same levels as the 2006 spending measures. The last Congress adopted only two appropriation bills for 2007 and as a result the federal government has been operating on continuing resolutions that mirror the 2006 spending plans.
An early analysis of the 2008 FAA budget indicates that the AIP program is being cut, not because of a lack of funds, but a change in priorities, says Principato. “We are concerned about the budget. It seems to on the face of it represent a reduction in infrastructure funding. This does not seem to be a good way to go.”
"Airports are disappointed that the administration has again chosen to request an artificially low funding level for AIP," says Todd Hauptli, the American Association of Airport Executive (AAAE)'s senior vice president for legislative affairs. "We are however confident that Congress will again reject this proposal and choose to fund the AIP at a much more robust level than that proposed by the administration."
Small airports could be hurt the most with a cut in the AIP funding, says Todd Jorns, the legislative director for the Regional Aviation Partners (RAP), a lobbying group of smaller airports, local governments and airlines. If AIP appropriations fall below $3.2 billion, then small, non-hub airports will receive only 18.5 percent of the funds – instead of 20 percent.
In good news-bad news scenario, Principato says the current FAA reauthorization legislation with these caps on AIP funding for non-hub airports expires on Sept. 30. The FAA’s much smaller budget is for the fiscal year that begins the next day.
“We will have to see what happens,” Principato says concerning the language in the yet-to-be submitted reauthorization measure. He says he presumes the next reauthorization measure would detail a new AIP distribution formula.
The budget narrative does give airports some hope, he says. Without naming the Passenger Facility Charge (PFC) program, Principato says the FAA alludes that the reauthorization act will be provide airports with greater flexibility for locally generated revenues.
The Bush budget plan fails to provide enough dollars to fund the industry's capital needs.
The Bush budget plan fails to provide enough dollars to fund the airports' capital needs.
... it’s all upbeat. Then there’s FAA reauthorization … not so upbeat. Last week started with NATA’s FBO Leadership Conference, followed by NBAA’s Schedulers and Dispatchers Conference...