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News Article - February 21, 2011

FEDERAL BUDGET CALLS FOR AIRPORT CONSTRUCTION GRANT CUTS  
By PAUL LUCE

  PHILADELPHIA — Airport officials are paying close attention to a federal budget proposal that could interfere with Philadelphia International Airport’s proposed expansion plan — and make ticket-buyers foot the bill for construction. In his $3.73 trillion budget for 2012, President Barack Obama called for a $1.1 billion reduction in airport construction grants. The cuts could force the Federal Aviation Administration and airports to seek funding for approved projects from passengers’ pockets. While disconcerting, Philadelphia International Airport officials said it is still unclear what effect the proposal would have on the airport’s $5.2 billion expansion plan. “The announcement of cuts and funding is of concern to us,” Philadelphia International Airport spokeswoman Victoria Lupica said Thursday. “But there is a process and we have to wait for the budget to pass. We, like everyone else, are watching this very closely.”

   Released Feb. 14, the president’s budget would allow smaller airports to continue to receive grant funding. Larger airports, however, could be forced to raise the passenger facility charge to a maximum of $7 from $4.50 per flight to offset the cuts. Airports use the passenger-charge money for FAA-approved safety and expansion projects, such as Philadelphia’s controversial airport expansion plan. In addition to some Republicans battling the proposal, several airlines are also fighting it, saying the budget amounts to a $2 billion tax increase on the flying public. Airline executives said the increase could discourage more people from flying. American Association of Airport Executives President Chip Barclay said slashing funding from user-supported airport infrastructure investment was not the solution to the nation’s budget woes. “Airports need more tools, not fewer, to meet the safety, security and capacity needs of our national aviation system,” he said in a recent press release. “That means robust federal investments, less federal intervention into local decision making by lifting the cap on (passenger facility charges) and a tax policy that allows airports to issue bonds without being unfairly penalized.” The passenger facility charge is levied on each flight segment, which is considered to be one takeoff and one landing.

   Airlines say raising the passenger fee would slow the recovery in airline travel, which helped airlines earn about $2.3 billion in profit last year after losing billions in 2008 and 2009. However, Residents Against Airport Expansion in Delco President Dave McCann said Obama’s budget proposal gave him great optimism. “When you are talking about less money to pull from, it will inevitably call into question the ability to propose the capacity enhancement program (at Philadelphia International Airport),” McCann said. “It’s not that we’re anti-airport, but we are opposed to the capacity enhancement program because it is a short-sighted move.”

Source - Delco Times



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