2004 Appropriations Issue Brief______________________

Author: Joel Bacon, (703) 575-2478



What's at Issue?

Traditionally, the majority of airport funding concerns have been considered as part of the bill funding the Department of Transportation, including the Federal Aviation Administration and its programs.  With the creation of the Transportation Security Administration and the broad assumption by the agency of airport passenger and baggage screening requirements, airports now have a number of security-related policy and funding issues to consider as well.  For the most part, those issues will be considered as part of the annual appropriations bill funding the Department of Homeland Security, which houses the TSA.  Customs and immigration issues will likewise be considered as part of the homeland security bill with the move of those agencies to the new Department.       


From an organizational standpoint, fiscal year 2004 is the first year with separate House and Senate appropriations subcommittees charged specifically with funding the operations of the Department of Homeland Security.  In fiscal year 2003, the TSA was funded as part of the bill funding the Department of Transportation.  Consequently, the AAAE/ACI-NA legislative affairs staff will spend much of this year working with the members and staff of both the transportation appropriations subcommittee, which has responsibility for drafting the DOT spending bill, and the homeland security appropriations subcommittee, which has responsibility for the DHS spending bill, on the priorities outlined below.  


In addition to the uncertainties created by the new subcommittee structure, fiscal year 2004 presents other challenges thanks to the fact that the authorization under AIR-21 for many FAA programs, including AIP, expires at the end of fiscal year 2003.  In previous years, AIR-21 provided a specific dollar amount authorization – $3.4 billion in FY 03, for example – and provided budget point-of-order protections that made it difficult for Congress to fund the program below that amount.  While we do not anticipate calls for major cuts in AIP, the fact that the program authorization and the funding guarantees are not currently in place beyond FY 2003, makes it all the more important for airports to remain engaged in the process.  For its part, the Administration has requested $3.4 billion for AIP in FY 2004. 


Aside from AIP, the major issue for airports will continue to be gaining resources to meet the multi-billion dollar cost of permanently installing explosive detection equipment into airports across the country.  While we have been successful in gaining close to a billion dollars for this purpose in previous appropriations measures, it is clear that much more is needed.  Without additional federal funding, airports fear that the TSA and FAA will attempt to continue the use of limited AIP dollars for this purpose.  Already nearly $600 million in AIP that would have otherwise been used for important capacity, safety and noise-related projects has been used for security.   


For other airport priorities, a great deal of work will be required. Many airports remain without reimbursement for hundreds of millions of dollars in security expenses, and while we will continue to seek reimbursement, the prospects for success are limited given the dismal federal budget situation.  In addition, the issues of TSA and FAA cost-free space will need to be addressed yet again as part of the appropriations process, although we will hope to get a permanent fix for this issue as part of the FAA reauthorization process.   The same holds true for the provision we have recently been able to secure allowing airports to pay for FAA project-specific staff and consultants to review environmental work for key airport projects. 


Funding for the Contract Tower and Contract Tower Cost-Sharing Programs remain a high priority as does funding for the Essential Air Service Program and the Small Community Air Service Development Pilot Program.  The fight on EAS and the small community program will be more difficult this year given the fact that the Administration has proposed major cuts and changes in eligibility criteria for EAS and no funding for the Small Community Air Service Development Pilot Program. 


It should also be noted that there is a strong possibility that Congress will consider a supplemental spending bill for Fiscal Year 2003 because of ongoing military and homeland security needs.  Although the Administration is unlikely to request funding for airport priorities in a supplemental bill, it does give us another opportunity to push for important funding and policy changes to benefit airports.      


AAAE/ACI-NA Priorities

AAAE and ACI-NA have identified a number of priorities for fiscal year 2004, including additional resources for security-related items, the Airport Improvement Program and others.  A more detailed list of our priorities and their justification follows:   


Department of Homeland Security Spending Bill


§       Installation of Explosive Detection Equipment in Airports – The Aviation and Transportation Security Act required the federal government to install explosive detection systems in all commercial service airports across the country by the end of 2002.  As anyone who recently has traveled through airports knows, a majority of these machines currently sit in already crowded terminal areas, where they were dumped in order to meet the 12/31/02 deadline for screening all checked baggage.  The longer the existing “temporary” arrangement persists, the bigger the security threat to waiting passengers and the more inconvenienced they are as they attempt to check baggage and board flights.   


The estimated costs of moving the equipment “in-line” with baggage systems out of the way of check-in areas are staggering.  Estimates vary from $3 billion to $5 billion to complete the extensive work required to make space available; to create new space in airports for the truck-sized EDS machines; to create and expand baggage make-up facilities; to integrate the various systems; and to reinforce existing floors. 


While it might be easier from a funding perspective to simply ignore these costs and try to “get by,with leaving the machinery where it now sits, doing so would have serious ramifications on security and passenger convenienceflows and processing.  The passenger’s difficulties in dealing with today’s security mazes, the latter of which remains extremely important given the current state of the aviation industry and the need to eliminate the passenger “hassle factor.”   


Recently, several Administration officials have stated that any shortcomings in this area could be addressed by shifting critical and limited Airport Improvement Program funds for this purpose.  We believe this approach is short-sighted and would result in the further diversion of important AIP funds from ongoing capacity and safety –related airport projects across the country.  We ask that additional funding be made available in FY 04 or as part of a FY 03 supplemental spending bill for the costs associated with the installation of EDS/ETD at the nation’s 429 commercial service airports.  We further encourage the TSA to make use of the LOI-type program that was recently created to fund these projects.        


§       TSA Use of Space in Airport Facilities – As the Transportation Security Administration has grown to address its broad mandates to oversee passenger and baggage screening at airports and other aspects of airport security, the agency has requested a significant amount of space in airports across the country – for passenger and baggage screening as well as for TSA employee break rooms, parking and training facilities.  Given the direct costs (maintenance, electricity, etc.) of providing this space, the opportunity costs associated with not having other airport tenants or customers in the space occupied by TSA, and the fact that airports are required by federal regulation to have a fee and rental structure that make the airport as self-sustaining as possible, airports believe that the TSA should pay for its use of space at airports just as other tenants are required to do.  


Provisions requiring the TSA to pay for its use of all space with the exception of “necessary security checkpoints” have been included in several recent appropriations bills, including the fiscal year 2003 omnibus appropriations bill (P.L. 108-7), which covers the period through September 30, 2003.  While the AAAE/ACI-NA legislative affairs team will be working to gain a permanent fix on this issue as part of the FAA reauthorization process, we believe this provision should be extended as part of the FY 2004 DHS spending bill.  


§       Reimbursement to Airports for Costs Associated With Meeting Federal Security-Related Requirements – New federal resources must accompany federal requirements.  Airport operators can no longer absorb additional security costs without serious consequences to capital improvement programs and other airport operations.  Airports are already stretched thin trying to deal with a number of unfunded mandates imposed on them by the federal government.  In addition, the Airport Improvement Program has already been tapped heavily for security-related items, with more than $560 million in FY 2002 devoted for security, up from $57 million the previous year.  Without incremental federal assistance, airports would have no choice but to lay off part of the burden Turning to on our partners in the airline industry, which is for assistance also is not a viable option given their dire financial situation.   


§       Other Airport-Security Related Items – Although airports have had some success recently in addressing law enforcement issues at screening checkpoints and parking limitations, the relationship between the TSA and airport operators in these and other areas requires further modification.  The AAAE/ACI-NA legislative staff will continue looking for opportunities to address ongoing security-related issues as part of the appropriations process. 


§       Customs and Immigration Funding – AAAE/ACI-NA will continue to seek adequate funding to help facilitate the timely processing of passengers at airports.



Department of Transportation Spending Bill 


·       $4 billion for the Airport Improvement Program – Although the events of September 11 have taken some focus away from the issue of airport capacity, it is clear that serious needs remain.  Passenger traffic is expected to grow significantly from its current level of 680 million to one billion annually within the next decade and cargo and general aviation operations will likely continue to skyrocket.  In light of those facts, additional funding for AIP beyond the current $3.4 billion level is critical.


Efforts must also be made to ensure that limited AIP dollars are not drained for security expenses or diverted for other purposes.  Specifically, we oppose the Administration’s request to divert AIP funds for administrative expenses ($70 million), and airport-related technology research ($17 million).  Those programs should be funded from sources other than AIP as they have been in the past.    


·       FAA Use of Space in Airport-Owned Facilities – In the past several years, proposals have emerged to force airports to furnish space without cost to the FAA despite decades-old arrangements in which the Agency has paid below-market rent for FAA facilities located on airport property.  Recognizing the significant burden this change would impose on airports – particularly smaller airports that rely on non-aeronautical revenues, including FAA rent, to help them remain self-sufficient several recent appropriations bills have included a general provision prohibiting the FAA from moving forward with its proposed policy in this area.  The Administration’s budget request for FY 2004 includes a similar general provision, and we urge Congress to continue its support of this policy.  Again, we will be looking to gain a permanent fix as part of the FAA reauthorization bill.


·       Funding for the FAA Facilities and Equipment Account – National Aviation System (NAS) modernization, which is funded from the F&E account, is critical to enhancing efficiency and capacity throughout the aviation system. The combination of LAAS and ADS-B offers great promise in solving the ATC component of the airport capacity/delay problem and should receive accelerated funding. Critical Free Flight Phase 1 and Phase 2 programs will improve overall system capacity and also merit adequate funding.


·       Funding for the Small Community Air Service Development Pilot Program – Gaining funding for this important program, which is aimed at helping smaller communities attract air service, is a high priority for many airports.  The $20 million dedicated for the program as part of the FY 2002 and FY 2003 transportation spending bills may prove critical in helping small communities deal with service problems exacerbated by the events of September 11.  We believe that funding should be increased in FY 2004.    


·       Funding for the Essential Air Service Program – Recognizing the importance of EAS to many smaller airports and communities, AAAE/ACI-NA supports adequate funding for this program.  We encourage Congress to improve the Essential Air Service program rather than let it die on the vine as the Administration is proposing.  The Administration’s budget request includes only $50 million for the EAS program – $65 million less than the amount that Congress approved for the program as part of the FY03 omnibus appropriations bill. The President’s request calls on local communities to provide up to a 25 percent matching share. 


·       Full Funding of $82.5 for the regular Contract Tower Program and $6.5 for the Cost Sharing Program– The DOT IG has verified that this program has been extremely successful in achieving millions in air traffic control savings while improving safety, enhancing regional airline service opportunities and increasing economic productivity in smaller communities across the country. The Contract Tower Program and the Contract Tower Cost-Sharing Program deserve full funding. 


·       Airport Funding of Project-Specific FAA Staff or Consultants – The FY 2002 and FY 2003 transportation appropriations bills included a general provision allowing airports to provide funds to the FAA to hire additional, project-specific staff to supervise and implement reviews of critical airport capacity projects.  This arrangement has already been extremely helpful in places such as Chicago and San Francisco in addressing the FAA’s resource limitations with environmental processing.  The additional staff work exclusively under FAA’s supervision and have no obligation to the airport.  We urge Congress to extend this provision through FY 2004.  We will, again, work to make this change permanent as part of the FAA reauthorization bill.


·       Funding for Aviation-Related Research and Development – Airport-related R&D offers great promise, yet it continues to struggle for attention in the FAA and NASA budgets. Funding research on quieter aircraft engines as well as the impacts of the introduction of 550-seat aircraft on airports should be a priority for Congress, as should funding the FAA’s Airport Technology Research program.