Propping up small-town airports with $200 million
By Editorial Board, Published: March 8
THE $85 BILLION in across-the-board budget cuts known as sequestration have begun to affect places like Garden City, the Kansas county seat (pop. 26,880) whose airport will lose $318,756 in Federal Aviation Administration funds that pay for four air traffic controllers. As The Post’s Stephanie McCrummen reported, Garden City Regional Airport’s control tower is one of 238 affected by sequestration, which will reduce total FAA spending in fiscal 2013 from about $16.7 billion to $16.1 billion. Small towns are lamenting the potential impact on air safety and local economies.
Another case of sequestration madness? The increased safety risk is likely to be marginal at worst. At Garden City, only two commercial jets take off and land per day — connecting to and from Dallas — and one already does so when the tower is closed. As for local economies, the federal government already spends many billions of dollars in pursuit of prosperity for rural America. Though undoubtedly nice for the folks who benefit, one might well question the national interest in subsidizing a couple of flights a day between Garden City and Dallas.
Garden City’s predicament does illustrate the senselessness of sequestration in a different way. Its airport is one of 120 in 49 states (not including Alaska) that receive federal support under the Essential Air Service (EAS) program. Established in 1978 as a 10-year measure to help small towns adjust to airline deregulation, EAS has mushroomed into a seemingly permanent $200 million-a-year subsidy, fiercely defended by rural lawmakers from both parties. EAS pays airlines to provide scheduled flights to and from places with so few passengers that it wouldn’t make sense to operate there otherwise. That is to say, it subsidizes inessential air service.
Garden City has had twice-a-day jet service to Dallas since April because EAS gave American Eagle Airlines a two-year contract, at $2.9 million per year, to provide it, according to the Congressional Research Service. That works out to $107 in taxpayer aid for each of 18,000 passengers in 2012. Such subsidy rates are typical under the program. State and local governments also chip in to keep Garden City going. Airport officials note that their plan is to use federal subsidies to establish a large enough customer base so that the airline can eventually provide service without a subsidy. But given the program’s history as “temporary,” we’re skeptical.
The point is not to vilify Garden City or any other small town but to note that EAS itself has long since outlived its ostensible purpose and now serves only to illustrate the federal government’s utter inability to establish sensible priorities. If the relative handful of people who choose to live in rural communities want scheduled air service, they should draw on the resources of their own states, or of the private sector, to provide it — or do without and content themselves with the compensating virtues of small-town life.
Ideally, EAS would be zeroed out, and the $200 million we waste on it devoted to a truly national purpose: perhaps deficit reduction, military readiness or the social safety net. Alas, if Congress and the White House were capable of making such choices, we probably never would have had sequestration in the first place.
Earlier this week, the Department of Transportation’s inspector general released a detailed review of the aviation industry from 2008 to 2011. Requested by Congress, the review concluded that while the airline industry remains one of the most important in the American economy, “significant and frequent challenges to the economic and operating environment appear to be the new norm for the airline industry, causing airlines to innovate and take drastic action to survive.” According to the report, some of the most significant trends of recent years, like a more consolidated industry with less competition or fewer flight options for small communities, “may continue for the foreseeable future as airlines further improve their adaptability to changing market forces.”
On the impact for small communities, the inspector general report states that the FAA Modernization and Reform Act of 2012 significantly altered the protection that small communities previously enjoyed under the Essential Air Service (EAS) program, making it “easier for airlines to reduce the number of communities they support, without advanced notice of withdrawal.” The roughly 50 small communities currently served by only one air carrier are particularly vulnerable, the report acknowledges.
“The [FAA Modernization and Reform] Act introduced new limits to the program by restricting eligibility and appropriations. Eligibility for communities in the lower 48 States to participate in the program is now restricted to only those that received subsidized service between September 30, 2010, and September 30, 2011 (no new communities in the lower 48 states are eligible for subsidy). Further, except at the limited number of subsidized communities, airlines are no longer required to provide advanced notice of their intention to terminate service.”
The report concludes its findings on the EAS program by pointing out that program appropriations will be steadily reduced from $195 million in FY 2011 to $93 million in FY 2015 and prior to these legislative changes, “EAS subsidies increased from $50 million for 115 communities in FY 2001 to $195 million for 162 communities in FY 2011, caused in part by higher fuel costs and lower ridership.” How this planned reduction in appropriations will affect the number of communities that can be funded in the future is “unknown.”
U.S. Department of Transportation
View the original article here.
Sequestration - the automatic spending cuts set to take effect January 2, 2013 – if implemented, is expected to reduce the Federal Aviation Administration (FAA) annual budget by approximately $1 billion for nine years. The exact results of this reduction are unclear, but recent reports point to detrimental economic impacts across the FAA, civil aviation industry, and national economy as a whole.
A new study released this week estimates the budget cuts to the FAA as a result of sequestration could cost up to 132,000 aviation jobs and sap $80 billion a year from the nation’s gross domestic product. The new study, released by the Aerospace Industries Association (AIA) and Econsult Corporation, claims annual economic losses could “amount to $80 billion annually by 2035, an annual decrease of 37 to 73 million in passenger enplanements and annual reductions of 1 to 2 billion pounds of transported air freight.” In response, AIA formed the Second to None campaign to head off sequestration and “preserve American leadership in Aerospace and Defense.”
“The stakes are too high not to take action,” said former Secretary of Transportation and Congressman Norman Mineta at a luncheon meeting of aviation leaders in Washington. “If sequestration is not stopped, it will be by far the most devastating budget cut to the FAA in its 54 years.”
Additionally, an article published by Senior Fellow Scott Lilly with the Center for American Progress states that as many as 106 U.S. airports could lose air traffic control service and effectively be shut down. Further, because FAA officials will likely be forced to cut air traffic service at “airports where they would have the least impact on the traveling public,” smaller airports face the greatest threat from sequestration.
In his article for the Center for American Progress, Scott Lilly writes:
The cuts to the FAA budget could also threaten Essential Air Service (EAS) funding. Todd Hauptli, Senior Executive Vice President, American Association of Airport Executives stated at the Washington luncheon, “Congress needs to act to avoid these devastating and indiscriminate cuts. This [AIA] study confirms that the entire aviation industry should be on high-alert in the weeks and months ahead as this process unfolds.”
Read Scott Lilly’s report for the Center for American Progress here.
Read the Aerospace Industries Association and Econsult Corporation study here.
House Votes To Boost Subsidies For Flights To Rural Areas
The House passed a transportation and housing spending bill that would boost funding by 11 percent for a government program that subsidizes air travel to rural areas, an initiative long criticized by budget watchdogs as rife with waste.
Lawmakers voted 261-163 to pass the fiscal 2013 appropriations measure, H.R. 5972. The bill would provide $214 million for the Essential Air Service, which pays carriers to continue flights to more than 100 small communities, such as Dodge City, Kansas, and Huron, South Dakota.
Critics say the flights often are little-used and can cost taxpayers hundreds of dollars per passenger. The program “lavishly subsidizes some of the least essential air services in the country,” said Representative Tom McClintock, a California Republican.
On June 26 McClintock offered an amendment to cut $114 million from the program. His proposal divided his Republican colleagues, with some saying their constituents depend on the service, and the House rejected it, 164-238.
“It is the only way some of these airports stay open,” said Representative Tim Huelskamp, a freshman Republican whose district covers 69 counties in central and western Kansas. “It’s a rural issue.” Without the program, he said, his constituents would have to drive hundreds of miles to the nearest airport.
Overall, the spending bill would provide $51.6 billion in discretionary spending for theDepartment of Transportation, the Department of Housing and Urban Development and other programs. That would be a $3.9 billion reduction from the current fiscal year’s level and $1.9 billion below the president’s spending request.
Among the bill’s winners are Amtrak, which would get a spending boost of 27 percent, to $1.8 billion. Funding for Community Development Block Grants, a favorite of Democrats, would increase by $396 million to $3.3 billion.
Lawmakers pared other transportation and housing initiatives. They rejected President Barack Obama’s request for an additional $1 billion for high-speed rail; ignored his proposal to spend $500 million on so-called TIGER transportation grants, which were created in the 2009 stimulus package to promote road, rail and port infrastructure projects; and denied his request for $150 million for the Choice Neighborhoods program, which is intended to promote development in blighted neighborhoods.
The administration has threatened to veto the measure, primarily because of a dispute over spending ceilings in the dozen annual appropriations bills needed to fund the government for the fiscal year that begins Oct. 1. The White House has argued that Congress should adhere to the caps set in the debt ceiling agreement of last August. House Republicans have set lower spending limits.
The Essential Air Service grew out of the government’s deregulation of the airlines in the late 1970s. Congress, fearing carriers would abandon routes to small communities because they were unprofitable, began paying airlines to continue service.
The initiative was supposed to be temporary, to help ease the transition to a deregulated airline industry. Since the 1980s lawmakers have resisted efforts to cut the program. The latest unsuccessful bid came from McClintock, whose amendment was defeated earlier this week by a bipartisan coalition of 161 Democrats and 77 Republicans.
“It’s not surprising,” said Erich Zimmermann, a policy analyst at Taxpayers for Common Sense, a Washington-based watchdog group. “We expect that members will continue to protect this program because it’s a way to send money back home.”
Representative Tom Latham, an Iowa Republican and a member of the Appropriations Committee, said the proposed cuts would have been “devastating” for areas in his state that rely on the program to help spur economic development. Representative Paul Gosar, a freshman Republican from Arizona, also backed the program.
“Have you had a medical emergency?” said Gosar. “Have you been to rural Arizona? Do it one time and you’ll find out how the Essential Air Service is important.”
Representative Cynthia Lummis, a Wyoming Republican, said she would be willing to cut the program, though only gradually because she said local communities need to adjust to any changes.
“It’s simply something that takes time,” she said.
Funding for the program was one element in the dispute last year between House and Senate lawmakers that led to a two-week partial shutdown of the Federal Aviation Administration.
House Republicans in a bill extending the FAA’s authority to operate sought to eliminate subsidies at 13 rural airports, including those in the states of Senate Majority Leader Harry Reid, a Nevada Democrat, and Senator Jay Rockefeller, a West Virginia Democrat who is chairman of the Commerce, Science and Transportation Committee. The Senate wouldn’t pass the extension.
About 4,000 FAA employees were out of work during the period, airport construction projects were halted and the agency lost at least $468 million in airline ticket taxes it could not collect.
A compromise to authorize FAA spending signed into law Feb. 14 included funding for Essential Air Service. The law says there should not be subsidies for flights averaging fewer than 10 passengers or at airports under 175 miles from a major hub.
FOR IMMEDIATE RELEASE
CONTACT: Brian Sowa
House of Representatives Votes to Fully Fund Essential Air Service Program
WASHINGTON, DC – The U.S. House of Representatives today voted to fully fund the Essential Air Service (EAS) program at $214 million per year, the same amount requested in the President’s budget, as part of the Fiscal Year (FY) 2013 Transportation, Housing and Urban Development appropriations bill.
“Essential Air Service provides a vital economic lifeline to rural America, connecting underserved towns and communities to the rest of the nation’s transportation network,” explained Rural Air Service Alliance (RASA) Executive Director Brian Sowa. “This modest investment allows small businesses to grow in rural America, supports what remains of our nation’s manufacturing sector, and provides access to more affordable transportation services so rural communities can attract and retain professionals from doctors to chemistry teachers.”
During floor consideration, Representative Tom McClintock (R-CA) offered an amendment to eliminate funding for Essential Air Service, claiming it “lavishly subsidizes some of the least essential air services in the country.” Not every Republican shared McClintock’s sentiment, and the House rejected his proposal by a vote of 164-238.
“We are pleased the House recognized the importance of EAS and ignored Congressman McClintock’s attempt to eliminate one of the few transportation programs focused on rural America,” Sowa stated.
The funding measure must still be approved by the U.S. Senate and negotiated by a House-Senate conference committee. Since its creation, the EAS program has withstood various assaults, including lowered funding levels and attempts to limit the program. Last year, the House voted to eliminate the program in the lower 48 states by 2013, after which Congressional members from rural states like North and South Dakota stepped in and fought to save it.
About the Rural Air Service Alliance
RASA was formed to advocate for rural communities and protect the vital access to commercial air service that they rely on. RASA is the only organization that is solely focused on promoting EAS as an economic driver and necessary in connecting Rural America to the national transportation network.
Visit us on our website: http://ruralairservice.org/.