Some Airport Directors Forego Federal Funds
October 21, 2013
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  • The nation’s airports once counted on billions of dollars in federal grants to upgrade their facilities, but in an increasingly uncertain fiscal environment, some would prefer to leave the money on the table and leverage their own resources instead.

    For three decades, the federal Airport Improvement Program has helped airports build new runways, make safety improvements and pay for planning and environmental studies, funded by taxes on airline tickets and aviation fuel.

    But Washington’s erratic approach to budgeting has tested airports’ traditional dependency on federal funds, and some airport directors have had enough.
    “We want the government out of this,” said Mark VanLoh, the director of the Aviation Department at Kansas City, Mo.

    He’s planning a $1.2 billion remake of Kansas City International Airport, but he doesn’t want to wait for the federal government to get its act together. Instead, he wants Congress to raise a per-ticket fee to pay for the improvements, a move that lawmakers and airlines oppose.

    “The airlines have been very successful as characterizing it as a tax or a tax increase,” said Joel Bacon, the vice president of federal affairs at the American Association of Airport Executives, an industry group. “It’s a local fee.”

    Airport megaprojects such as the one planned for Kansas City are partly financed with the Passenger Facility Charge, which each traveler pays with every ticket purchase. The fee has lost value to inflation since Congress capped it at $4.50 in 2000, according to the Airports Council International-North America, an industry group.

    “With inflation, we’re not getting any money out of it to construct anything,” VanLoh said. “It’s really worthless.”

    VanLoh said that if Congress allowed airports to charge $7 to $8 per ticket, he wouldn’t need any federal airport improvement funds. “We’re not looking for a very large amount,” he said.

    VanLoh said he expected to receive no more than $30 million to $40 million from the Airport Improvement Program, money that would help pay for infrastructure around a new terminal. That’s far less than other airports have received in recent years for similar projects.

    “In general, there’s a frustration on being dependent on the government for infrastructure dollars,” Bacon said. “You’ve just got this constant crisis to crisis.”

    The Federal Aviation Administration shut down temporarily in 2011 after Congress couldn’t agree to authorize funding for the agency. Lawmakers passed 23 stopgap funding bills for the FAA until they finally agreed on longer-term legislation last year. But it expires in 2015, and the uncertainty makes it harder for airports to plan.

    “That’s the one that really puts airports on hold,” VanLoh said.

    Then sequestration — the across-the-board spending cuts enacted by Congress — kicked in last spring, leading the FAA to furlough air traffic controllers. Amid a backlash from the very lawmakers who approved the law, the FAA brought the controllers back to work by paying them with $253 million in funds intended for airport improvements.

    Congress has shown little willingness, however, to change the fee, with the airlines leading the opposition.
    Raising the passenger charge “will drive up the cost of flying for millions of Americans who rely on air travel,” said Vaughn Jennings, a spokesman for Airlines for America, an industry group.
    “There’s always a disconnect between what airlines want and what airports want,” said Tom Reich, the director of air service development at AvPORTS, an industry consulting firm.