Airports looking for financial flexibility

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WASHINGTON - Lawmakers are moving closer to a long-term re-authorization of Federal Aviation Administration spending that airports hope will include a long-awaited provision allowing them to increase the revenue they use to back their bonds.

The House is set to consider a new long-term FAA bill, H.R. 4, this week after an unpopular bill privatizing air traffic control failed to gain traction last year. Airports are hopeful that bipartisan support can propel a bill that removes the cap on Passenger Facilities Charges collected at ticketing, which airports use for infrastructure investment and as revenue securing their bonds.

PFCs have been capped at $4.50 per ticket since the year 2000, and airports have been pushing hard to have that cap either removed or substantially raised as a means of giving them additional financial flexibility to make infrastructure investments. Airports Council International-North America estimates that U.S. airports need some $100 billion in new infrastructure investments. A bipartisan duo, Reps. Thomas Massie, R-Ky. and Pete DeFazio D-Ore. have introduced an amendment to H.R. 4 that would uncap the PFC and give airports the ability to set their own. ACI-NA supports the measure, as do some free-market groups.

“We believe that market forces—not the federal government—should be what drives a 21st century aviation policy in this country and strongly support policies that reflect this free market belief,” a group of free-market interests wrote in a letter to the House Committee on Rules April 23. The groups, including the Competitive Enterprise Institute, Taxpayers Protection Alliance, and FreedomWorks, urged the leaders of that committee tasked with considering amendments to move the Massie/DeFazio measure through.

“Congress must remove the federal yoke from airport financing,” the groups wrote. “We need to move to a system where airports are fully self-sufficient, instead of reliant on federal tax dollars. We need a system that will allow decisions to be made at the local level and a system where the users of airports bear the responsibility of paying for that use—not taxpayers.”

Some low-tax advocacy groups have opposed uncapping the PFC, arguing that it amounts to a hidden tax on American travelers. Americans For Tax Reform president Grover Norquist sent letters to Senate leaders last year urging them not to support a PFC uncapping or increase.

The House Rules Committee is set to go through the amendments Tuesday night, and the bill could reach the House floor shortly thereafter. When and if the House passes its FAA bill, it would need to go to conference committee with the Senate to create a final bill both chambers could approve before sending it up to the White House for the President’s signature.

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Infrastructure Airport revenue bonds Bond legislation Law and regulation ACI Washington DC