Chance for Relief

May 8, 1999

Chance for Relief

Initiatives being pushed in the U.S. House offer long-term funding solutions for airports, states

BY Henry M. Ogrodzinski, President & CEO, Nasao

June 1999

Henry Ogrodzinski serves as president and CEO of the National Association of State Aviation Officials, based in Silver Spring, MD. He is former president of the U.S. Air & Trade Show in Dayton, and has held positions with Gulfstream Aerospace, the General Aviation Manufactur-ers Assn., and the Experiemental Aircraft Assn.

Governor Jesse Ventura said about his recent election in Minnesota, "I told them the truth, and they voted for me." What a concept. We can certainly use a dose of truth in federal budgeting and a bit of "trust" in the Airport and Airways Trust Fund. Perhaps some of our elected federal representatives should study the Governor's philosophy.

The Budget Resolution passed by the House in late March contained $730 billion in general tax cuts. This was reduced from the original proposal of $780 billion. Some of those playful scamps on Capitol Hill wanted to finance $50 billion of the original proposal by shamelessly raiding the projected surplus in the Aviation Trust Fund. Really.

Fortunately, the guys in the white hats came riding to the rescue: House Transportation and Infrastructure Committee Chairman Bud Shuster (R-PA), Ranking Member Jim Oberstar (D-MN), Aviation Subcommittee Chairman John Duncan (R-TN), and ranking Member William Lipinski (D-IL) are the leaders of the largest (75 members) and most bipartisan cooperative committee in Congress.

They are also strong advocates of unlocking the Aviation Trust Fund, which today has a surplus of about $9 billion. That surplus is projected to grow to over $90 billion by 2009. Some in Congress and the Administration find the temptation to use these aviation tax dollars for non-aviation purposes overwhelming. But Chairman Shuster and his colleagues persuaded Speaker of the House Dennis Hastert (R-IL) to shield the trust fund from the tax-cutting scheme. Just as important, this same team convinced Speaker Hastert to bring AIR - 21 (also known as H.R. 1000) to the floor of the House for a straight up or down vote. At NASAO, we are guessing that the vote will take place this month (May).

H.R. 111 takes the aviation trust fund off budget; AIR - 21 promises a five-year AIP program funded at $5 billion annually. They are two of the most important pieces of legislation facing the 106th Congress.

Impact of the Industry
Our national economy is dependent upon a safe, secure, efficient, and relatively inexpensive national air transportation system. If we fail to invest in the system's infrastructure today, the economy eventually goes south taking Medicare, Social Security, and everything else with it. Every American is a beneficiary of our aviation system, which the National Civil Aviation Review Commission (NCARC) called, "one of the most significant engines for national economic growth."

Today, aviation accounts for more than 6 percent of the U.S. Gross Domestic Product (GDP) and it is growing everyday. More than 1.5 million people work in the aerospace and airline industries, generating a payroll of more than $100 billion annually. To quote the NCARC report again, "The world's air travelers are expected to double from one billion to more than 2 billion over the next 20 years. The total economic impact of air transportion on the world economy was $1.4 trillion in 1994. This is expected to increase to over $1.7 trillion by the year 2010. Currently, over $1.5 trillion worth of air freight is moved around the globe annually."

Falling far short of predicted needs
As indicated at FAA's recent Commercial and General Aviation Forecast Conferences, many experts are now predicting even faster and more explosive growth trends across the board. Yet, our present infrastructure is incapable of handling current demand, and we are unprepared for the growth that is about to be thrust upon us.

DOT Secretary Rodney Slater has eloquently stated that aviation will be to the 21st Century what highways were to the 20th and railroads were to the 19th. Yet, Americans suffered through more than half a million hours of flight delays last year. Our country's 30 largest airports are already congested. Chairman Shuster recently cited a report estimating that we must increase airport capacity by 60 percent by 2015 just to maintain our current unacceptable levels of delays. Every credible authority predicts gridlock if we do not change our ways. The solution is locked in the Aviation Trust Fund.

The AIR-21 bill continues the historic "general fund" contribution to aviation of $2-3 billion annually. Sen. John McCain (R-AZ) has put some very positive and important features into the Senate FAA/AIP reauthorization bill (S.82). But, in the March issue on this page, Senator McCain wrote, "If you take aviation off budget, you lose this general fund contribution." I respectfully disagree.

Broad-based support
Many groups and individuals across the nation have advocated special budget treatment for the Aviation Trust Fund. These include an alliance of NASAO; the National Governors' Association; the Southern Governors Association; the National Conference of State Legislatures; and the American Association of State Highway and Transportation Officials.

In campaigning for H.R. 111, Thomas Donahue, President of the U.S. Chamber of Commerce, wrote, "It is not only an issue of tax fairness but is the key to helping maintain our competitive edge in the global marketplace." The Coalition for TRUST (Transportation Revenues Used Solely for Transportation) and the Alliance for Truth in Transportation Budgeting, both made up of broad groups of business, industry, labor, and state and local governments, have been indispensable leaders in the charge towards special budget treatment for the Aviation Trust Fund. These large, highly respected groups have all called for unlocking the Trust Fund.

How radical can this idea be?

Holding back the States
An important facet of AIR-21 is that it is a five-year funding bill. Most airports and states already have five-year Capitol Improvement Plans; all states have long-range system plans. Aside from inadequate funding, short-term reauthorization has had a disastrous effect on their carefully planned infrastructure improvements. With the deadlock on Capitol Hill last year resulting in a six-month AIP extension, followed by a two-month extension this year, we may as well have thrown the plans out the window. The best guess is that this year's start and stop funding has forced 284 airports in 31 states to delay important projects valued at $500 million.

Airport infrastructure improvements have been delayed while the proponents and opponents of increasing slots and PFCs have used the reauthorization bill as their battleground and the airports as their hostage. Slots and PFCs are sideshow issues which have been blown out of proportion and, as a result, limit debate on the critical core issues of AIP funding. Slots and PFCs must be dealt with, but a five-year AIP program funded at adequate levels by an unlocked trust fund is of critical importance.

If AIR-21 does not pass, and an acceptable compromise is not reached with the Senate, we will have to return to the daily struggle of keeping our national aviation system functioning and patched together until some new disaster catches the attention of the general public and reignites the funding debate.