Yet Another Funding Decision Looms for Congress: How to Pay for Airports
Posted at 9:41 a.m. on June 18, 2014
Even as Congress tries to come up with a user fee or other funding source to replenish the Highway Trust Fund that pays for roads and subways, lawmakers are beginning to ponder next year’s Federal Aviation Administration reauthorization bill, which will grapple with finding money for the nation’s airports.
At today’s hearing of the House Transportation and Infrastructure Subcommittee on Aviation, which gets started at 10 a.m., members will hear clashing views on how much money will be needed and specifically on whether Congress should raise the ceiling on the Passenger Facility Charge, or PFC, — the fee airports can impose on passengers.
The fee is capped at $4.50 per leg of a trip. The cap was set in 2000. In 2013, airports collected approximately $2.8 billion from PFCs, according to the FAA. Airports use PFC money partly to pay off bonds they issue for capital projects.
Vaughn Jennings, a spokesman for Airlines for America, the trade association for the major passenger and cargo airlines, said Tuesday, “Collaboration between airlines and airports has worked remarkably well, as evidenced by the massive infrastructure investments underway, or already completed, at U.S. airports across the country. The aviation trust fund has a high uncommitted balance of more than $5 billion. We have a winning formula for investing in infrastructure, and raising the PFC tax would simply hurt the traveling public and isn’t needed.”
Sharon Pinkerton, Airlines for America’s senior vice president, will be testifying for the airlines at Wednesday’s hearing.
The airlines’ view contrasts with the prepared testimony of Mark Reis, managing director of the Seattle-Tacoma International Airport and chair of Airports Council International-North America.
Reis will tell the subcommittee that since the last PFC increase in 2000, “airports have been doing more with less. The reality is that we have hit a wall.”
He says, “PFC user fees have not kept up with inflation. To provide airports the same PFC spending power today as we had in 2000, the PFC cap would need to be $8.50.” He will urge Congress to raise the PFC user fee limit to $8.50 and then peg it to inflation, which would be “the lowest cost solution to keep American’s airports modern and competitive.”
Reis will discuss another funding source, the Airport Improvement Program (AIP), which is funded by passengers as part of the 7.5 percent ticket tax and segment fees assessed on airline tickets.
“For the past few years, Congress set the AIP at $3.3 billion, which is down from the $3.5 billion level between 2007 and 2011,” Reis will tell the committee. “AIP truly serves as a lifeline for the non-hubs, small hubs and many medium size hub airports. However, funding for the program has declined over the past decade.”
Also set to testify are FAA Deputy Associate Administrator for Airports Ben De Leon, Gerald Dillingham, director of Civil Aviation Issues for GAO, Mark Baker of the Aircraft Owners and Pilots Association, and Todd Hauptli, who heads the American Association of Airport Executives.