Members of a House aviation panel yesterday criticized a Bush administration proposal to provide $2.75 billion for the Federal Aviation Administration's airport improvement program for fiscal 2009, a $765 million cut from the funds that were provided in 2008.
"Increasing investment in aviation infrastructure is necessary to enhance capacity and reduce delays and one way to achieve that goal is through new runways and runway extensions in this country," Rep. Jerry Costello, D-Ill., chairman of the House Transportation and Infrastructure aviation subcommittee, said at a hearing on the Bush FAA budget proposal. "The AIP levels set forth in the administration's fiscal 2009 proposal will not provide the investment needed to reduce congestion and delays."
Costello's comments come as the Department of Transportation recently reported that domestic flight delays in 2007 reached the second highest levels in 13 years.
The FAA's AIP provides grants to the nation's airports to fund modernization and improvement projects. The grants are sometimes used to back tax-exempt bonds, but more often are used to augment other funding sources, such as bond proceeds, and other state and local grants.
"I am concerned about the impact that reduced funding would have on our airports' ability to keep up with capital project needs, particularly at small and medium-sized airports that are unable to rely on sizable passenger facility charge receipts to complete the needed projects," said Rep. John J. DuncanJr., R-Tenn.
Passenger facility charges, or PFCs, are fees that airports tack on to airfares and use to fund capital projects. Currently capped at $4.50, PFCs are typically levied by larger airports with high passenger levels and are often used to help repay capital improvement bonds. The PFC was last raised as part of aviation legislation enacted in 2000. Medium and smaller airports that rely more on AIP funds than on PFCs and bonds because they don't have as many passengers.
At the hearing, Ramesh K. Punwani, the FAA's chief financial officer, defended the Bush 2009 funding proposal by pointing out that it is part of the White House's broader plan to revamp the way the FAA is funded. The plan, originally put forth last year, calls for reducing AIP funding from previous levels over the next three years, while increasing the cap on the PFC to $6.
"With our proposed programmatic changes, including the proposed increase in the maximum PFC allowed, the $2.75 billion will be enough to meet capital needs," Punwani said.
However, Gerald Dillingham, director of physical infrastructure issues for the Government Accountability Office, said that medium and smaller airports will receive less funding under the Bush plan.
"According to our calculations, a $6 PFC would have allowed airports to increase their PFC collections by about $1.1 billion in 2007, while they would forgo about $247 million in AIP funds under the proposal," he said. "Conversely, smaller airports, which collect less in PFCs and are more reliant on AIP for funding, could have increased their PFC collections by about $171 million in 2007, but would have to forgo about $436 million in AIP under the proposal."
Punwani told members on the aviation panel that another extension of the laws authorizing and funding FAA programs will be needed prior to their expiration on Feb. 29.
Another extension will be needed because legislation to replace the expired laws has been held up over significant differences between bills approved by the Finance Committee and Commerce Committee. The House approved their bill in September.
Meanwhile, leaders of the House Appropriations Committee's transportation subcommittee yesterday raised concerns about whether low-income drivers would be priced out of using roads under increased use of tolling and private investment through public-private partnerships, or P3s, to fund transportation infrastructure as advocated by Transportation Secretary Mary Peters.
At a hearing on the Bush fiscal 2009 transportation budget request, Peters responded that her funding plan would likely benefit low-income drivers by taking drivers off of untolled roads and reducing congestion on them. However, she said that the DOT has not done a thorough study of the effect on low-income drivers, but she noted that where these funding mechanism are used.
She also argued that increasing the gas tax, which some believe is the most expedient way to fund infrastructure of the next 20 years, is more of a regressive tax on the poor than tolling because lower-income people often live further from where they work than more affluent people.
Also at the hearing, Rep. Frank Wolf, R-Va., raised concerns over private investment in U.S. infrastructure.
Wolf warned that private firms have motives that are often at odds with public interest. In particular, he mentioned Macquarie Infrastructure Group, which took over the Dulles Greenway toll road in 2005 for $617.5 million. It cost "$4.80 cents to go 13 miles," he said, adding that the cost hurts low-income people. q