The Avenue

The Pluses and Minuses of the New FAA Bill

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After more than 20 temporary extensions and a near-complete agency shutdown, the country is finally on the doorstep of long-term aviation legislation. Cue the applause.

They also didn’t skimp on the impact, authorizing $64 billion in investment over four years. And like with most pieces of bipartisan legislation, there are elements for everyone to love and hate. But for us, it’s what’s missing that’s the most aggravating.

Let’s start with what legislators did include. Our main concern at the Brookings Metro Program is restoring broad-based economic growth in the country’s metro areas, and the Federal
Aviation Administration spending bill addresses major programs to that end. We’ll list them because there’s some real ground to cover what with 374 pages of legislative text:

  • Airport Improvement Program (AIP). The AIP is the FAA’s main capital improvement program, and we found misplaced grant apportionments back in 2009. Unfortunately, there’s no specific amendments to improve AIP targeting towards the country’s most congested airports--but there is a study to judge the current apportionment methods. Not a good start.
  • Essential Air Service (EAS). The equity-driven, small community program that had a hand in the July FAA shutdown, we’ve railed against this program’s misplaced subsidies for years. Fortunately, the agreement establishes some ridership benchmarks to start eliminating under-used routes, at least for those communities within 175 miles of certain hub airports. But is this enough change?  Taxpayers for Common Sense has some thoughts.
  • NextGen Satellite Technology. The most innovative and transformative investment on the horizon, NextGen promises to simultaneously improve capacity and safety by replacing decades-old radar systems. Reauthorization really delivers here, making NextGen investments a priority under the nearly $11 billion Air Navigation umbrella, establishing two administrative positions with real accountability and bonus opportunities, creating a public-private loan program to assist air carrier upgrades, and requiring 35-plus airports to implement NextGen plans by June 2015.

These three programs, and their divergent impacts and efficacy, are just the tip of the iceberg. House and Senate drafters also included studies around baggage fees and cell phone usage, methods to reduce flights in the face of poor on-time performance, and a whole suite of environmental improvements.

But Congress also missed on a few critical opportunities to empower metro areas. The first was raising the cap on Passenger Facility Charges (PFCs) at the country’s largest and busiest airports. PFCs are the locally-controlled revenue device to improve physical capital. Right now, the largest airports may only levy a $4.50 user fee per passenger, they haven’t raised the cap for years (reducing purchasing power), and revenues cannot fund multimodal projects. Yet at a time when domestic airports continue to experience capacity constraints and aesthetic failings next to our Asian and European peers, Congress failed to give localities more tools to improve.

Likewise, Congress also failed to fully recognize the local economic impact of airports. In an increasingly globalized world--and a domestic economy increasingly focused on global trade--airports are regional gateways to the world. As such, it’s important that businesses of all kinds optimize their physical access to aviation infrastructure. The reauthorization mostly skimmed this concern, offering only a land redevelopment pilot and an intermodal GAO study. Instead, the bill should’ve either maintained House language about “Aerotropolis” concepts or created more specific language tying AIP investments to regional economic concerns.

In the end, this bill pushes the country in the right direction--but there’s room for more (economic) growth. We need to get realistic that upgrading global infrastructure is a national priority, and one that can be driven by our metropolitan economies.

 

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