By Rebecca Mulholland, Director, Legislative Affairs
This week was a busy one for Washington – President Donald Trump released his long-awaited $1.5 trillion infrastructure proposal and his fiscal year 2019 budget request on Monday, February 12th. Here is a look into each proposal, and what they mean for aviation:
President Trump’s infrastructure plan aims to invest $1.5 trillion into our nation’s infrastructure, including $200 billion in investment from the federal government and the remaining funds from states and the private sector. The proposal has been met with skepticism in Congress, with Republican frustrations on the $1.5 trillion price tag and Democratic concerns about the disproportionate federal government share. The proposal seeks to change existing infrastructure programs and creates pilot programs to incentivize, transform and finance state and local governments to make their own investments, allocating $50 billion of investment in rural America to states to prioritize their needs.
For aviation, the proposal:
- Seeks to provide government agencies the ability to sell off federal assets, including airports, if it can be demonstrated that “an increase in value from the sale would optimize the taxpayer value for federal assets” (p. 19). This would include the potential sale of Reagan National Airport (DCA) and Dulles International Airport (IAD).
- Aims to expand the streamlined passenger facility charge (PFC) application process, currently at non-hub airports, to small hub airports.
- Calls for Congress to limit the FAA’s authority to manage and approve airport projects that are not related to “critical airfield infrastructure.” The proposal names hangars and terminals as examples of projects that the Administration says are not “critical airfield infrastructure projects.”
- Encourages airports to offer incentive payments for Airport Improvement Program (AIP) projects and limits FAA oversight of AIP funds.
However, questions remain. For example, how much of the $1.5 trillion will go to each mode of transportation (given that some grant programs may be utilized for non-transportation fields, like broadband) or what the revised PFC process means for charter operators (will making the process easier for small airports increase the likelihood that PFCs will impact air charter operators more than they currently do?). It is also unclear how interested Congress is in taking up this transformative proposal given the recent passage into law of a two-year fiscal 2018 budget bill.
While Congress celebrates the passage of the Fiscal Year 2018 Budget, the Trump Administration has shifted gears to the next fiscal year, releasing its $4.4 trillion federal budget blueprint for Fiscal Year 2019. This budget blueprint aims to provide more details of how the proposed $200 billion from the infrastructure proposal discussed above will be divided up, department by department.
The budget request does not bode well for transportation, slashing the Department of Transportation’s (DOT) discretionary funding by 19 percent, to $15.6 billion, compared with what was enacted for Fiscal Year 2018. Here is a brief breakdown of how aviation is impacted by the budget request:
- $16.1 billion allocated to FAA. This is down from the $16.3 billion that was enacted this year;
- $3.35 billion allocated to AIP. That number is the level at which AIP has been flat-lined since fiscal year 2014; and,
- $93 million for the Essential Air Service (EAS) program, down 38 percent from the $149 million provided in fiscal year 2018. The proposal also calls for reforms to who is eligible for the EAS program.
Also, it is important to note that, like last year, the budget proposal calls for privatizing our nation’s air traffic control system, beginning in 2022. NATA released a press statement in strong opposition to this addition, noting that privatization has continuously “been met with the collective resistance of NATA and hundreds of other leading general aviation organizations.” Also, a strong bipartisan and bicameral coalition in the House of Representatives and the Senate are not supportive.
Now that Washington has had time to absorb what is in the budget proposal, the legislative process begins. The House and Senate Budget Committees will review the numbers and supply budget resolutions to the House and Senate Appropriations Committees. The Appropriations Committees will markup the bills, send to the House and Senate chambers for approval and the President will sign each appropriation (or one omnibus) bill into law.
Note that the budget proposal is just that, a proposal, and Congress can accept or reject any cuts suggested. There is still a long way to go to a final deal, and a lot can happen, so follow NATA as the legislative process continues.