Anyone who has sat on the tarmac for hours, navigated a crowded, crumbling terminal or languished in long TSA lines knows that our nation's airports need help. Politicians from Donald Trump to Hillary Clinton agree. But the current airport funding system provides little flexibility to make things any better. What to do?
First, it's important to know a little bit about the congressionally concocted funding scheme that keeps U.S. airports stuck in the last century.
Here's how it "works." Congress applies a mix of federal taxes and fees to the base airfare for each flight, which fund government services like air traffic control, TSA screening, safety inspections and airport upgrades. These taxes typically account for 13 to 16 percent of the total ticket price, although their individual rates have almost nothing to do with the actual cost of the services being provided for each flight.
Of the $13 billion in federal aviation taxes that flyers pay each year, Congress devotes only $3.35 billion (roughly 25 percent) to airport upgrades. That's paltry compared to what's needed — $15 billion per year, according to one recent survey. And of the $3.35 billion that Congress does spend on airports, approximately $1.17 billion (35 percent) goes to airports that primarily serve private jets and recreational aircraft, and have virtually no commercial service.
To supplement this meager investment, Congress also allows airports to collect a Passenger Facility Charge of up to $4.50 per passenger, which each airport can use to fund projects that reduce flight delays, enhance security or increase the number of available flights. These funds totaled another $3.3 billion in 2015. But since 2000, Congress has neglected to raise the PFC from that $4.50 maximum, even as inflation has doubled construction costs during that period.
So while airlines are in the midst of an eight-year fee-ing frenzy (checked baggage, change fees, you name it), Congress has frozen airport fees in place for more than 16 years and stopped airports from raising — even by $1 — their PFCs to pay for projects that actually make it easier and better to fly. What's worse, for every federal tax dollar that flyers pay, Congress spends only 65 cents on airports that actually have commercial passengers, while the other 35 cents goes to subsidize airports that most people will never use.
That sounds like the definition of inefficiency to me.
Thankfully, a solution resides in a bill introduced by Reps. David Jolly, R-Belleair Bluffs, Gus Bilirakis, R-Palm Harbor, and Thomas Massie, R-Ky. The Restoring Local Control of Airports Act of 2016 (HR 5563) would allow airport authorities to set their PFC rates based on what's needed to adequately fund essential maintenance and upgrades.
Even better, because airports could raise more money locally, the bill would also — hallelujah — cut federal ticket taxes by $2 on the average roundtrip airfare and reduce congressional spending on airports by $400 million per year.
If this bill were enacted today, every flyer in the country would pay less in federal ticket taxes tomorrow. What's more, flyers would only pay an increased PFC when departing from an airport that's in need of substantial upgrades — and much of the increased fee would be offset by the ticket tax cut. Also, unlike today, all of it would be reinvested back into providing flyers a better experience the next time they travel.
This bill may not magically solve every issue with our current aviation system. But compared to how airports are funded today, it's simply brilliant.
Travel is an essential part of our daily lives and critical to our economy, generating $2.1 trillion in domestic economic output and supporting 15 million American jobs. Safe, modern and efficient airports are vital to sustaining this growth by keeping travelers moving.
Roger Dow is the CEO of the U.S. Travel Association, which represents all sectors of the U.S. travel industry.