Obama’s Budget Would Restructure Airport Improvement Program

Posted May 6, 2013 at 1:49pm

While President Barack Obama complained that averting Federal Aviation Administration furloughs by transferring airport capital improvement funds amounted to “using our seedcorn,” his own fiscal 2014 budget would cut the Airport Improvement Program by 17 percent.

Obama’s plan would reduce Airport Improvement Program grant authority to $2.9 billion from $3.5 billion and restructure the program in a way that leaves larger hub airports such as those in New York, Chicago, Washington and Los Angeles on the hook for more of their capital costs.

To compensate for those cuts, the larger airports would be able to set higher passenger facility charges. The cap on per-ticket charges would be lifted from the current $4.50 to $8.

Deputy Transportation Secretary John D. Porcari said such a change would give big airports a better chance to raise the funds they need to stay competitive with international rivals.

“We heard loud and clear from our partners at big hub airports that this is the best way to invest,” Porcari said. “We believe we can make a very strong case for it.”

For their part, airport operators say they are fine with the higher charges because the funds go directly to the facility that charges them. Airports Council International – North America even proposed last month to allow a passenger facility charge increase to offset the loss of Airport Improvement Program funds to the FAA’s operations account, a request that went unheeded on Capitol Hill.