I’m back in Champaign after visiting Peoria and Springfield earlier this week (a real pleasant surprise: the sunset as you come out of the Burger Barge restaurant in Peoria; looking over the Illinois river with the city of Peoria on the far shore and the sunset behind it. One of the nicest sunsets I’ve seen).
Both airports had stimulus projects either completed or underway (lots of stimulus projects on the highways between Virginia and here, and on the highways of central Illinois too). I’ve often said that the airport provisions of the stimulus (the grant money AND the AMT waiver on airport bonds) are among the most effective and efficient provisions of that legislation. You can see that with your own eyes out here.
While traveling here I’ve been actively plugged in to developments surrounding FAA Reauthorization. I am amused that several airline CEO’s wrote a letter urging its passage even after they have spent months trying to kill the bill. It is disappointing that the bill has been de-railed, for now. Interesting timing.
Perhaps the most interesting development so far is the piece put out by Senate Republicans on the Commerce Committee and they way they describe the PFC user fee.
Passenger Facility Charge (PFC)
- The House bill included an increase to the maximum allowable PFC from $4.50 to $7.00 per flight segment. The Senate compromise proposes allowing a $1.00 PFC increase, maximum PFC to $5.50 per takeoff.
- Airports use these fees to fund FAA-approved projects that enhance safety, security, or capacity; reduce noise; or increase air carrier competition.
- PFCs are local fees in lieu of taxes dedicated to capital projects needed at local airports. Unlike a federal tax, only users pay PFCs. PFCs are not collected by the federal government, not spent by the federal government and not deposited into the federal treasury. Decisions on whether to impose a PFC are determined locally.
I couldn’t have done a better job myself except for the fact that they proposed an increase in the cap to just $5.50 rather than $7.
I have visited three airports on this trip, to go along with many others. Most airports were originally built decades ago, and much work remains to be done to bring our national aviation infrastructure up to date (an engineering group that grades US transportation infrastructure recently gave aviation a “D”). The PFC is the most effective, efficient and conservative transportation funding mechanism used anywhere in America today. Conservative leaders should be its most outspoken supports and some are.
Bob Poole, Director of Transportation Studies, Reason Foundation recently wrote, “some are quibbling over whether the PFC is a user fee or a tax. It is definitely not a federal tax, and since the funds are raised and spent by individual airports, for project(s) on that specific airport, and only for a time period sufficient to pay for the FAA‐approved project(s), in my book that is a user fee, not a tax. But for conservatives, the for more important argument is that the PFC program is an excellent example of exactly the kinds of devolution most conservatives and most Republican favor.”
And Paul Weyrich, in 1999 as the chairman of the Coalition for Americans, urged Congress at the time not to cap PFCs, noting that local communities should have the prerogative to set this local fee.
A FAA Reauthorization Bill, with a PFC user fee limit increase and a strong airport improvement program, will create tens of thousands of jobs and have no impact on the federal deficit. It is the best jobs bill on the radar screen today. It is a bill any incumbent of either party should be dying to run on.
As I reported last time, it will play in Peoria!