The Reauthorization of the Federal Aviation Administration was finally completed the end of January. While much has been said about the Reauthorization, not much has been said about its adequacy.
After 22 extensions and over four years of stop-gap measures, some of which didn’t work and created significant gaps and employee furloughs, the FAA can breathe a sigh of relief through Fiscal Year 2015 – at least on the authorization side. Most of the articles I’ve seen refer to the relief of now being able to move forward without the constant threat of a shutdown of agency operations, or about the brokenness of our political system and outdated method of financing and controlling our nation’s air transportation system.
On this latter point, I worked as a civil servant for twenty years before learning an important lesson about why our federal government works so slowly or seemingly not at all. Maybe it’s because my education is largely in a technical field, but I suspect many Americans never learned this either. During a class at the American University in public administration and government, after many years of complaining about government dysfunction as an insider, I learned that our Founding Fathers and the framers of the Constitution were deathly afraid of having too powerful a federal government. They favored retention of power and rights by the States. So, the Constitution was deliberately designed to restrict the role of the federal government and make it difficult for it to do things too quickly.
Taking all of this into account, maybe the Reauthorization process isn’t too far off from what the Founding Fathers intended. Nonetheless, it’s great to finally have the Reauthorization. Unfortunately, Reauthorization takes care of only half of the budgeting task – it sets the maximum size of the bag, but the Appropriations process in fact will determine how much money is placed into the bag. The authorization is like being given credit card with a credit limit, but you still need money to use it. That money is provided through the appropriations process. Appropriators are the ones who have to deal with the fact that there are a lot of hungry mouths, but only so much to go around.
The Reauthorization is interesting from several perspectives. It directs the Secretary of Transportation to give budgetary priority to NextGen projects. Of course, in reality, there is only so much latitude that the Secretary of Transportation and the FAA Administrator have. They can request, but the appropriators in Congress are the ones who determine how much funding is provided and where it is allocated. In a constrained budgetary environment, which this is, there is never enough funding to go around. Aviation will have to complete with every other government agency and public need.
Even if the appropriators funded the FAA to the full level of the authorization, would that be enough? Over ten years ago, I was involved in doing an analysis to determine what the capital needs of the FAA ought to be. One of the driving forces turns out to be the need to refresh the existing infrastructure. Buildings last 40 years, power generators 25 years, some components 15 and 20 years, others 5 years, etc. If you could smooth your spending to maintain your infrastructure, you would replace 1/40 of your buildings each year, 1/25 of your power generators, etc. When we added it all up, it turned out we needed $1.7B each year, nearly 90% of our capital budget, just to refresh the infrastructure we had. It ate up nearly the entire capital budget, which was a little under $2B at the time. Clearly, that didn’t leave enough to pay for the myriad of new technologies that needed to be developed, built and implemented. So, we sought out ways to make the system significantly more efficient and less costly while limping along and eking out a few more years from infrastructure that had long ago passed the end of its economic service life. Under the constrained budget of that day, we figured out a way to keep the system afloat, while making progress, albeit slow progress, toward modernizing the infrastructure. Sometimes, that progress was too slow. When your progress is too slow, sometimes the support you need unravels. That happened on several occasions.
Now we are in the era of NextGen, an era requiring accelerated change and investment. The capital budget is still $2.7B per year (and worth a lot less in purchasing power than the $2.4B capital budget that the FAA had 10 years ago). Does the Reauthorization provide enough funding authority to pay for NextGen and the existing infrastructure? Or, is this a case of trying to fit 10 pounds into a 5 pound bag?
Clearly there isn’t enough funding to sustain the existing infrastructure plus produce all of the planned NextGen improvements. If NextGen is to become a reality, plans would be needed to shed significant portions of the existing infrastructure as soon as practical. The FAA recently announced plans to eliminate a large portion of its VOR navigational aids and transition to airspace that is no longer tied to ground navigation facilities. That is a good start. Much more needs to be done to shed costly infrastructure that could be eliminated by doing things more innovatively. A higher standard of benefit-to-cost criteria perhaps ought to be adopted to eliminate facilities that contribute little or no positive economic value.
On the NextGen side of the ledger, there needs to be more focus on delivering benefits sooner. A lot of NextGen funding is going into large, new infrastructure programs. The new infrastructure is important. But, perhaps even more so at this juncture, it’s important to deliver visible improvements that can be taken to the bank, real benefits that can serve as compelling justification and build credibility to maintain political support for longer term investments. How well are we doing at fixing the most costly problems in the system today? Do we even know what the most costly problems are?
When we think about our nation’s air transportation system, I’ve often focused on operational concepts, technologies, and airspace design. But, much to the dismay of one of the readers of my blog, I haven’t talked about airports and, more specifically, runways. Yes, runways are hugely important. When we look at the entire air transportation system, there are numerous bottlenecks. Some of them turn out to be runways. Others are in the airspace or related to limits to controller or pilot workload, or perhaps specific pieces of technology – when we mitigate some of these kinds of bottlenecks, we likely will see more bottlenecks emerge at runways. The inescapable truth is that runways are perhaps the most difficult kind of resource to expand. Yet, at some locations, environmental advocates have made it all but impossible to build or extend runways in a timely way. So, the FAA tries to fund runway construction (ninety cents on the dollar, last time I looked) and partners with local airport authorities to duke it out with the environmentalists. These proceedings take years and cost an immense amount of money to many of the parties, including the FAA.
What’s wrong with this picture? In most cases, people compete for federal dollars. Why is the FAA trying to force airport funding on a community that isn’t sure it wants it? Why not just back off and allow communities to complete for airport funding the way it works for most other federal grants? Let the communities work it out. Some communities understand the importance of air transportation to economic growth and jobs. Others don’t, or they feel that the environmental impacts are not worth the price. Let the communities decide, and then let the communities compete. The FAA could become much more popular with everyone, without exception, competing for airport funding and no one fighting them. Money and time would be saved too.
Why the attention on airport funding? A sizable portion of runway construction is funded through the Airport Improvement Program, which draws funding from the Airport and Airway Trust Fund, which in turn gets its funding from ticket excise taxes and a variety of taxes on things like cargo and aviation fuel. Like the funding for runways, the FAA’s capital funds come from the Airport and Airway Trust Fund too. There is only so much money in the till, so Congress has to tradeoff one for the other, as it did in the Reauthorization discussions. Since the level of capital funding is inadequate, why not appropriate a little less for runways by avoiding those communities who are essentially undecided about wanting runway enhancements. This would allow the capital account to be at least partially augmented.
Trying to support the existing infrastructure while implementing NextGen is indeed like trying to put 10 pounds into a 5 pound bag. We need to lessen the 10 pound load and at the same time find ways of increasing the size of the bag. Until we match the two, we won’t have a real plan, but just a hope and a prayer that everything will work out in the end. We know how those experiences end.