Aviation Projects Up in the Air
FAA Funding Reauthorization Will Allow States to Plan Long-Term
By Brydon Ross, CSG Director of Energy Policy
Illinois Transportation Secretary Ann Schneider is frustrated.
Like many other heads of state transportation agencies, Schneider is trying to manage a billion dollar budget and thousands of employees with no long-term strategic financial guidance. It’s not just the gridlock over a surface transportation reauthorization bill that’s causing her frustrations, it’s also the gridlock over air transport.
Illinois has nearly 900 aviation landing facilities. The state has committed more than $250 million in funding for 165 airport project agreements to improve runways, taxiways, parking facilities and terminals between January 2009 and December 2011.
But that commitment to aviation improvements hasn’t been easy: The Federal Aviation Administration reauthorization bill—which provides policy guidance, collects aviation trust fund revenues and finances airport improvements—has endured more than 20 temporary extensions since Congress passed the last comprehensive bill in 2007. Congress finally passed a $63.4 billion, four-year reauthorization bill in early February.
Schneider said the absence of multi-year federal guidance in the form of full reauthorization delayed needed improvements. “It’s unfortunate because it really makes it difficult for the states to plan,” she said.
While gridlock is the norm in Washington, the differences between the competing House and Senate versions of the FAA reauthorization were particularly acute. Disagreements abounded over authorized funding levels, policy disputes over easing unionization rules for rail and aviation workers, creating new takeoff and landing slots at Reagan National Airport, and the effectiveness of subsidizing smaller and remote airports through the Essential Air Service program.
The final bill partially rolled back regulatory changes that had made it easier for unionization and set aside $190 million annually to subsidize airline service for rural communities.
While transportation leaders across the country have maintained their commitment to airports and air travel despite the lack of a reauthorization to help guide planning decisions, that gridlock made it difficult.
Schneider, one of only six women to lead state departments of transportation, said Illinois has dealt with the unpredictable nature of short-term reauthorizations through the creation of “innovation teams,” which encourage creative thinking for traditional improvement projects to capture additional cost savings and environmental benefits.
In addition, Schneider said other states could use Gov. Pat Quinn’s Illinois Jobs Now proposal as a template to ensure growth for their airport facilities. Under the program, the state provided $380 million for airport improvements to match federal dollars and provided additional dedicated funds for important airport improvement projects that may not necessarily qualify for FAA funds.
But even those projects that qualify for FAA funding come with uncertainty.
The two-week shutdown of the FAA in August 2011 created a $1 billion hole in baggage collection fees for local airports and temporarily halted work on 200 airport improvement projects, according to the North American Branch of the Airports Council International.
States, localities and industries that rely on air travel have been kept in limbo without certainty that future projects can be built. Airport directors around the country have said for some time that uncertainty over FAA funding—particularly the Airport Improvement Program that helps finance expansion programs—created disruptions to airport construction projects.
“A lack of an FAA funding bill has forced some contractors to adjust their timelines for those projects and, in doing so, caused them to miss out on the prime construction season when the weather was good,” Victor Bird, director of the Oklahoma Aeronautics Commission, noted in State Aviation Journal.
Nationwide, the impact of airports and air travel is tremendous, with more than 11 million jobs tied to commercial and general aviation. The aviation industry and airports contribute more than $1 trillion a year in economic activity, according to Airlines for America, the airline industry’s trade association.
Economic and other benefits can be found through modernizing the air-traffic control system by converting ground-based radar systems in control towers to GPS. This Next Generation Air Transportation System, known as NextGen, could provide added safety benefits, reduce travel delays and save more than 1 billion gallons of jet fuel, based on FAA’s estimates, while keeping up with growing passenger demand. While airlines and the FAA will pay for NextGen, states could use Airport Improvement Project grant funds to purchase new tower equipment once the program gets off the ground.
The Bureau of Transportation Statistics found that from October 2010 through October 2011, U.S. airlines carried their largest number of passengers since 2008. According to the U.S. Travel Association, simply reducing delays in air travel could add $17 billion in travel spending and support an additional 155,000 jobs in lodging, food services, amusement, recreation and retail sectors of the economy. Lieutenant governors and state-appointed delegates, through the Aerospace States Association, have been among the earliest champions of NextGen and have been highly involved in the multi-agency review effort at the Department of Transportation.
The major stumbling block to implementation, however, is funding. Retrofitting a plane with NextGen avionics can run upward of $500,000, in addition to the significant cost to update control towers with new technology. The funding is a key part of the FAA reauthorization bill.
In the new bill, Congress allotted $11 billion toward modernizing the air traffic system and a provision was included that offers loan guarantees for airlines to help pay for modernization equipment in airplanes. It also set a deadline of June 2015 for the FAA to develop new procedures at the nation’s 35 busiest airports to accommodate planes using GPS navigation. The new procedures will allow planes to take off and land closer together because pilots will know the precise location of objects and other planes using GPS.
Congressional approval for that reauthorization is good news for states looking for long-term guidance.
“Transportation in Illinois is at a crossroads,” Schneider said. “I think there are some exciting times ahead, but we really have to work hard now to change how we look at transportation and transportation solutions.”