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THE FEDERAL AVIATION ADMINISTRATION'S BUDGET REQUEST AND FUNDING NEEDS
Tuesday, February 29, 2000
House of Representatives, Committee on Transportation and Infrastructure, Subcommittee on Aviation, Washington, D.C.
The committee met, pursuant to call, at 9:30 a.m. in room 2167, Rayburn House Office Building, Hon. John J. Duncan, Jr. [chairman of the subcommittee] presiding.
Mr. DUNCAN. I would like to welcome you all to the hearing today. We would like to go first for an opening statement to the outstanding Chairman of the full Committee, who we are always pleased to have with us, Chairman Bud Shuster.
Mr. SHUSTER. Thank you very much, Mr. Chairman. I am really interested in hearing what all our distinguished witnesses have to say. I thank you for holding this hearing and I yield back.
Mr. DUNCAN. Thank you very much.
We are also pleased to have the former Chairman of the Aviation Subcommittee and the Ranking Member of the Subcommittee, Mr. Oberstar.
Mr. OBERSTAR. Thank you very much, Mr. Chairman.
I was stunned by our Chairman's shyness——
[Laughter.]
Mr. OBERSTAR. You, Mr. Chairman, again will lead us into a very important discussion of the FAA budget. We are discussing not just some passing matter of transportation or some fanciful mode, but a $600 billion sector of the national economy. Aviation is responsible in large part for the $535 billion in travel and tourism that we generate throughout this country, and a $20 billion balance of payment surplus in travel and tourism and visitors coming to the United States, spending $20 million more than their fellow citizens spend overseas. It is aviation that brings them here and moves it about this country.
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We are talking also about modernization of the air traffic control system. In an era of increasing delays, despite the FAA having invested billions of dollars in modernization of the air traffic control system, installing nearly 47,000 pieces of technology at our 8,035 commercial airports throughout the United States, modernizing every aspect of air traffic control, and a big job yet to be done with standard automation and replacement system, and completion of the en route system and moving on to the host and oceanic computer control system.
Those investments are billions of dollars and years of research and lead time, planning and installation of the technology. But it has worked, because our aviation system is the safest in the world.
But delays are growing and we need, as we have done since the dawn of jet travel in 1958, needed investment in airports. A commission was appointed by President Eisenhower headed by General Clay, reported back to him in 1958, I don't recall the quote exactly, there was a need to double airport capacity in the United States, to meet the growing demand of air travel which itself would double in the next 10 years. A modest prediction, because within 10 years, aviation had more than doubled. Airport capacity lagged behind the Nation's demand and thirst for air travel.
The situation is the same today, with over $10 billion in needs, identified by the General Accounting Office, airport runways, taxiways, parking expansion is required. If we don't make those investments we are going to continue to see delays at our Nation's airports, which were up almost 23 percent last year.
Chairman Shuster led us successfully in a grandiose effort that resulted in taking the highway trust fund off budget and is now engaged in the same combat to take the Aviation Trust Fund off budget, now at the a $12 million surplus. If we don't move in the right direction, and as taxes continue to be collected, we have a $60 billion surplus in the next five or six years. It is unwise, no country in the world would do that. China is engaged in a $100 billion modernization of its aviation system, building six new airports and modernizing 35 existing airports to U.S. FAA standards. The biggest project in Europe, our committee visited last year, the biggest infrastructure project was an airport in Greece of over $2 billion.
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We in this country have more than 60 percent of all the air travel in the world. We need to make investments in our aviation system to keep pace, to keep our economy strong, to keep American number one in aviation. Mr. Chairman, these hearings will move us in the right direction and lead us in the direction of moving the Aviation Trust Fund off budget by building a groundswell of support and of understanding across this country.
Thank you very much for launching this hearing. Mr. Lipinski is unable to be here this morning and he asked me to request unanimous consent his statement be included in the record.
Mr. DUNCAN. Thank you very much, Mr. Oberstar. This is the first of two days of hearings on FAA's budget request and funding needs. We were originally going to hold only one day of hearings on this subject, however, we added an additional day to accommodate our distinguished witnesses here today.
We are very honored and pleased to have the Governors of North Dakota and Kentucky, as well as the mayors of Tulsa and Atlanta. We are also pleased Phil Boyer, a superb advocate for the general aviation community, is also able to join us today.
I apologize for there not being as many members of the Subcommittee here as usual. After starting on Monday afternoon, there are votes almost every week this year, we are coming off of a recess and do not have votes scheduled until tonight. Most members are coming in later this morning or this afternoon.
However, I can assure witnesses that with Chairman Shuster and Mr. Oberstar here, the two key people on transportation policy are here for this hearing. We did know that the Governors were in town this week and we did want to hear from you. That's why we scheduled this additional day. We do appreciate the fact that you're here with us.
The purpose of these two days of hearings is to focus on the FAA's budget request and its funding needs. This could not be more timely, as it comes right in the middle of a conference on the FAA reauthorization known as AIR–21. That bill, as everyone knows who follows this issue, would unlock the Aviation Trust Fund and ensure that there is adequate investment in our aviation infrastructure.
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I think it is well known that I am a very fiscal conservative, but I strongly support AIR–21. I could give many statistics, but just a few examples would be that the number of commercial air travelers has doubled since 1980, and is expected to top 1 billion in less than 10 years. Air freight tonnage has increased over 60 percent in the past 5 years, and is going up even faster than that.
Delays were up over 20 percent last year, at the cost of at least $3 billion to $4 billion, and one estimate says $4.5 billion to the airline industry, and $1.6 billion to the flying public. There were 318 air traffic control outages last year. The GAO estimates that $10 billion per year needs to be invested in airport infrastructure, but the Federal Government is spending almost 50 percent less in terms of real dollars on airport development for passengers than it did in 1991.
I could go on. The point is that there is money in the Aviation Trust Fund to deal with these problems, if only we could fully utilize it. The past two Congresses have already paid for improvements, and we should get the benefit of those improvements.
I want to say that I am very pleased, that I understand later today the Governors will adopt a resolution that includes asking Congress to increase funding levels for these programs by applying airport and airways trust fund receipts for their intended purpose. Furthermore, the Governors recognize the safety and security and other broad benefits presented by FAA in support of the guarantee of continued general funding for FAA operations.
I can tell you that we are pleased, if my information is correct, that that resolution will be adopted later. We are very pleased about that, and we are also pleased that you're here and will now recognize our first two witnesses, Governor Edward Schafer of North Dakota, and the Honorable Governor Paul Patton from the Commonwealth of Kentucky to receive your statements. We also receive them in the order that the witnesses are listed on the call of the hearing. That means, Governor Schafer, you will proceed first.
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TESTIMONY OF HON. EDWARD T. SCHAFER, GOVERNOR, NORTH DAKOTA, AND HON. PAUL E. PATTON, GOVERNOR, KENTUCKY
Governor SCHAFER. Thank you, Mr. Chairman, members of the Committee. We appreciate the opportunity to be here today and your allowing us to testify on this very important issue. I would also like to thank you for your hard work in getting the FAA reauthorization bill passed by the House that invests the airport and airways trust funds for their intended purpose and provides the general fund contribution to the FAA as well.
Governors are very concerned about the funding lapse of the airport improvement program. As you know, the ASE is a grant program through which Federal funding is provided to States and airports by the FAA for capital improvements. These include infrastructure improvements around airports, capacity expansion, noise abatement, runway construction, statewide planning and other issues.
Many safety related activities are also eligible for the grants, such as runway rehabilitation, purchase and installation of navigation equipment, fencing, obstruction removal and emergency response vehicles. Last year Congress appropriated almost $2 billion for the airport improvement program for fiscal year 2000. Without a reauthorization, however, these funds would not be spent on aviation infrastructure improvements.
The AIP lapse has significantly impacted and hurt North Dakota. According to the AASHTO and NASAO survey, I believe you have that in your package, it is an orange covered book, North Dakota, according to that survey, lost $12.7 million in funding due to the current lapse. If the lapse continues through fiscal year 2000, we are going to lose another $7.3 million. Our State transportation department estimates that we will require $62 million over the next three years to address our airport improvement needs.
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State responses to the AASHTO and NASAO survey indicate the following. Over $1.2 billion in projects in 33 States are currently on hold, pending release of this Federal funding. A majority of these projects relate to seeking improvements, either directly or indirectly. The stop and start nature of the release of the funding over the past two years has had many adverse impacts on State construction programs.
Many States report that their construction projects have been significantly reduced or are at risk of being canceled for the year. You can imagine some of the northern States, like North Dakota, with a very short construction season, if we don't get moving in the spring or get stopped in the middle of the program, often we miss that whole season and further delays of projects move on down the line.
Critical planning and design activities by States and airports have been reduced and many projects not ready to begin when the Federal funding does become available. If the lapse continues into spring, hundreds of projects will be canceled for the year. States identified an additional $425 million in projects that will be canceled if no Federal AIP funding is made available in fiscal year 2000 in addition to the $1.2 billion that's currently on hold.
Airport facilities will continue to deteriorate and projects remain on hold and/or are canceled, which will significantly boost the cost of future maintenance and improvement work and further deterioration of runways will also raise safety concerns in many States. A further delay of the AIP reauthorization will have significant economic impacts in our States, and critical airport improvement expansion projects will be canceled, along with construction of new airports. Consulting and construction companies will be affected, resulting in loss of income and loss of jobs.
To fiscal year 2002, 50 States have identified a minimum of $13 billion in Federal funding requirements to address airport improvement needs. It was assumed when the airport and runways trust fund was created that all aviation taxes and users fees deposited into the trust fund would be used for improvements in the Nation's airport and aviation construction, such as airport projects and air traffic control modernization.
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Despite significant increases in air traffic and a growing need for aviation construction improvements, however, this has not occurred. Last year, for instance, over $10 billion was collected, but only $8 billion was distributed. This leads to a buildup in the airport and airways trust fund and it is clearly unacceptable and violates the trust of aviation users who pay the taxes into this trust fund.
Maintaining also an allocation, a general fund allocation, for the FAA operations, is also crucial. This line item represents payment of amounts for Government aircraft that do not pay any aviation taxes. Also general safety and security oversight functions that benefit society as a whole.
It also recognizes the benefits derived by the general public from a safe and efficient operation of the national air space system, including benefits related to national security, economic growth, and the general health and safety of our communities.
Thank you again for the opportunity to be with you today. We appreciate your time and your willingness to accept our testimony. We have printed a copy of this for the record.
Mr. DUNCAN. Thank you very much, Governor Schafer.
Governor Patton?
Governor PATTON. Thank you, Mr. Chairman and members of the Committee, for allowing us to appear before you on behalf of the Governors of the Commonwealth.
I think I can just say an amen to your remarks and Mr. Oberstar's remarks. And we may be a little bit redundant, but certainly I think we are in complete agreement on this subject. I serve, along with Governor Schafer, as co-chair of the Coalition for TRUST, which stands for transportation revenues used solely for transportation. The Coalition for TRUST represents Governors, State and local leaders, over 1,000 individual businesses and farm, labor and many other organizations with a major stake in a healthy transportation system.
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We represent a broad cross-section of America. We have been urging the Congress for over two years now to fulfill the promise to American taxpayers to improve transportation infrastructure by spending funds generated from users of transportation infrastructure on the improvement of that infrastructure, as was the intent of the law when the laws imposing these fees were passed.
One of the topics of this hearing specifically, and a topic that you referred to, I want to briefly begin by discussing the Transportation Equity Act for the 21st century, TEA–21. In 1998, the Governors were focused on highway and transit spending. It appeared the Congress and the Administration were playing the whole transportation investment down in future years as dedicated revenues being collected from motorists were increasing dramatically. And as you are well aware and have already mentioned, the unspent balance in the Highway Trust Fund was projected to quadruple from $20 billion at that time to about $80 billion in four or five years.
The Governors supported a guarantee that all motor fuel tax revenues be invested for their intended purpose: repairing and improving our Nation's highways and transit systems. Because of the hard work of this Committee, along with the Senate Environment and Public Works Committees, this goal was reached. With the passage of TEA–21 legislation, Federal investment in highways and transit was increased 20 percent.
A little personal note, obviously as a Democrat I am very close to the White House. I went to the White House before I appeared on behalf of that legislation, and I said, I want to, you know, this is my position, I don't want to get cross-eyed with my friends here in the White House. They said, don't worry about it, that bill's not going to pass, so we are not going to get mad at you.
I am reminded more than once that sometimes things happen that they don't plan on happening. And I hope that that is the case with this piece of legislation.
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The Governors commend the Congress for restoring the integrity of the reliability of the dedicated highway trust fund by guaranteeing that all Federal highway trust revenues be distributed each year for their intended purpose. TEA–21 is providing the capital needed to ensure that our transportation system meets the demands of the 21st century economy. The Governors believe that TEA–21 was a significant milestone in State and Federal relations. This guarantee of funding in TEA–21 will provide States with the ability they need to better plan and manage long-term capital investments.
Governors are concerned, however, about increasing attempts by the Administration and some in Congress to break the promises made to the States in TEA–21. There have been attempts to redirect trust fund revenues away from TEA–21 designated programs to other priorities. And Governors again oppose that redirection of any revenues in any abrogation of guarantees in TEA–21.
With the success of TEA–21 and highway and transit infrastructure investment, Governors now want similar action on aviation infrastructure. Exactly a year ago, Governors, along with our partners in the Coalition for TRUST, called on Congress and the Administration to invest in aviation. The unspent balance in the airport and airways trust fund is already $12 billion, as previously mentioned and is expected to grow very rapidly in the future.
It is just not right that billions of dollars in critical safety, security and airport infrastructure needs go unmet when the trust fund exists for this sole purpose. We again call on Congress to invest all user fees that we dedicated to the airport and airways trust fund for its intended purposes, aircraft control modernization, and airport infrastructure development.
Certain funding for aviation infrastructure issues is inadequate. Since the airport improvement program expired in October, airports in every State have lost critical funding for airport construction and air traffic control modernization. Without a multi-year reauthorization, States will continue to lose funds and valuable time, as Governor Schafer mentioned. Construction season begins soon, and airports need a stable, consistent funding stream, in order to be able to begin new projects.
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We have attached to our testimony the survey that Governor Schafer mentioned by the American Association of State Highway and Transportation Officials, AASHTO, and the National Association of State Aviation Officials, NASAO. The survey is entitled The Impact of the Lapse in Renewing the Airport Improvement Program, a Survey of the States. AASHTO and NASAO conducted this survey to determine the impacts from a delay in the reauthorization of the AIP on State aviation systems. The expected impacts from the lapse in the AIP continues and the Federal funding needs required to maintain and improve the national airport system.
According to the survey, my State, Kentucky, currently has $5.5 million of airport funds on hold due to the lapse in AIP funding. If the lapse continues through fiscal 2000, Kentucky will lose another $8.5 million in projects. We will need the minimum of $80 million in Federal AIP funds over the next three years to adequately fund our airport improvement needs.
We need the conferees on aviation legislation reauthorization to quickly agree to a multi-year reauthorization that invests the airport trust fund revenues for their intended purpose along with the continued general fund contribution. In my State, aviation contributes over $7 billion a year to our economy. Over 96,000 Kentuckians are employed in aviation related industries, which results in an annual payroll of $2.2 billion.
Without the reauthorization of the Federal airport program, aviation's contribution to our economy, as well as the economy of the Nation, will be jeopardized.
And let me be personal for just a minute. I live in the heart of Appalachia, 150 miles from any airport with an instrument landing system. With the help of Congressman Rogers, last year we got Congressional authorization for a very modest ILS system at the airport where I land. For some reason, I asked why, to and from my home, we can't depend on it, because our air transport can never assure—be sure that they land.
The same situation faces every individual and every company who does business in the entire region. This project is on hold because the legislation we are talking about has not yet been passed by the Congress.
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Again, thank you for the opportunity to be with you today, and we would be glad to try and answer any questions that you may have.
Mr. DUNCAN. Governor Patton, thank you very much.
Because of the time schedule of the Governors, I did not go to other members for opening statements. Let me just very quickly introduce Mr. Mica of Florida. Mr. Quinn of New York just stepped out. Mr. Bass of New Hampshire is here and Mr. Pease of Indiana, Mr. LoBiondo of New Jersey, Mr. Barry of Arkansas, Mr. Boswell of Iowa and Mr. Oberstar of Minnesota, and Chairman Shuster from Pennsylvania.
We ended up with more members than I thought we would. We'll now go for comments and questions to Chairman Shuster.
Mr. SHUSTER. First of all, I want to thank you so very much for your tremendous support, both on TEA–21 and now on AIR–21. Having the Governors behind this is absolutely crucial. You've been there, and I can't thank you enough.
Governor, I was thrilled with your story about going to the White House and being told not to worry about it because it wasn't going to pass. I must tell you a sequel to that. The day the President did in fact sign it into law, I was standing at his shoulder. He looked up at me with a wonderful, wide grin on his face, and I had this overwhelming, compulsive thought that he really thinks this was his idea.
[Laughter.]
Governor PATTON. I have been guilty of that myself.
Mr. SHUSTER. We'll be very happy to have that experience again, stand at his shoulder when he signs AIR–21.
I have no questions, I just want to thank you so much.
Mr. DUNCAN. Thank you very much, Chairman Shuster.
Mr. Oberstar.
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Mr. OBERSTAR. Thank you, Mr. Chairman. I share the Chairman's views on this matter. I want to thank both of you, my neighbor Governor, Governor Schafer, is a very distinguished Governor of that State, and Governor Patton. You remind me so much of the great Wendell Ford, whom you resemble in tone, voice and inflection. I can close my eyes and picture Wendell Ford sitting at that table, though he never did.
Governor PATTON. That is a compliment.
Mr. OBERSTAR. But he was a partner with us in shaping aviation. When I was chair of the Aviation Subcommittee, Wendell Ford and I worked together, closely, arm in arm, except on one subject, smoking on-board aircraft.
[Laughter.]
Mr. OBERSTAR. He just said, that's a non-starter, we won't even talk about that, Jim. And we got along well.
But when we started the aviation reauthorization bill in 1990, there was a $7.5 billion surplus in the Aviation Trust Fund. We resolved to do all we could to unlock the fund, short of taking it off budget, because we knew at that time, the timing just wasn't right to do it, with all the budget deficits and so on that we had to deal with.
We reached an accommodation with the Appropriations Committee and the Office of Management and Budget and the House and Senate Budget Committees. It worked. We began drawing down that surplus, down to about $4 billion.
But then times changed, and Administration changed, and my great regret is a Democratic Administration came in and reversed the trend of investing in aviation, hold the money back in surplus. Now we have a $12 million surplus.
So I know very well the impact of aviation on both your States, and the need for continued investments. I particularly appreciate the reference to stop and go financing. Those projects wind up being more costly when you have to slow them down and start all over again. You can't get the design and engineering underway, and when the money does arrive, you can't take advantage of it.
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Governor Schafer, there is one thing you didn't touch on, which is essential air service, very important to your State. I don't recall if there are any essential air service communities left in Kentucky. But it is a problem across this country.
Governor SCHAFER. We find that a rural State like North Dakota, with broad expanses and many small communities and regional airports, the difficulties we have of course is the traffic mode. The difficulty we have is dealing with a business community that wants to bring suppliers in, expansion projects, say we have air service, we just don't quite have enough capacity here to allow an airline to profitably operate those routes.
This has been a very important supplemental program to allow those airports or the airlines to operate into these small communities. We appreciate the support that's been there. We have several communities in North Dakota that are totally reliant on this legislation, because simply, if the subsidy wasn't there for essential air service, those connections would not exist. Western North Dakota, especially, we have several airports where in oil activity, for instance, oil and gas recovery, an important subject these days with the price of oil out there, a lot of flights and a lot of people in and out, very difficult to maintain on a seasonal basis, small traffic situations.
So we really appreciate your support for that essential air service. It is critical for rural, remote areas in North Dakota and in other western States, especially.
Mr. OBERSTAR. I know in 1978, the Committee was voting on deregulation of aviation, which I wasn't convinced was a really good idea for America. But I had an amendment to include essential air service. It became known as essential air service in that package. And offering my amendment, I said, if this doesn't pass, there are towns in my district where, without aviation, the only way to get there is to be born there.
And regrettably, Congress has not fully, nor have successive Administrations, kept faith with EAS. Indeed, in current appropriations, or current fiscal year, the appropriations committees violated the law by taking funding for EAS out of AIP funds, rather than the operations account for the FAA. We sure appreciate the support from the Governors for trust and trust only to assure that the operations account continues to be funded at least 30 percent out of general revenues, and that the ticket tax go for the modernization of air traffic control and investment in airport, air side capacity and runways and traffic control.
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Governor SCHAFER. I can give you a good example of EAS, when the funding lapsed last year. We lost some service in Jamestown, North Dakota, it is 100 miles between Bismarck, the capital, and Fargo, on the other side, 100 miles each way, Fargo being our largest community. People started driving back and forth to Bismarck and Fargo to get air service. When the funding became available, and the place was restored at Jamestown, the traffic was way down. We lost ground because people were used to driving either way, for family reasons or whatever.
So the habits of travel became different. The very effect of the essential air service to keep building service enough to get it up, so that it become a profitable route, the very negative effect of not having the funding did exactly the opposite. And now we are starting from a lower base to try to build it back up again.
Mr. OBERSTAR. Governor Patton?
Governor PATTON. Well, let me say, we don't have, to my knowledge, essential air service funds. But we need some. I certainly hope, I will bore you that subject, too.
Let me say that we are the home of UPS's major hub in the United States. If you got a package from Florida or Chicago or St. Louis or probably California this morning, it was in Louisville, Kentucky at 2:00 o'clock this morning. That facility is absolutely vital to the Nation's commerce. DHL has a major hub at the northern Kentucky airport, some people call it the Cincinnati airport, but it is in northern Kentucky, another major hub.
So these things are very, very important to the Commonwealth, and we certainly appreciate the Committee's consideration of this legislation.
Mr. OBERSTAR. Thank you very much for your support on behalf of the Governors, and for your individual support. When you see my good friend Wendell, please give him my best wishes.
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Thank you, Mr. Chairman.
Mr. DUNCAN. Thank you, Mr. Oberstar.
The General Accounting Office is doing a study on the essential air service program right now. We will be holding a hearing on that.
Governor Patton, when Mr. Oberstar was mentioning your tone and dialect and inflection, I think he was talking about your accent. I have to tell you from the Committee, you have no accent whatsoever.
[Laughter.]
Governor PATTON. Thank you, sir.
We'll go for the next comments or questions to Mr. Bass.
Mr. BASS. Thank you very much, Mr. Chairman.
I don't have any questions. I think the two witnesses have clearly enunciated the fact that the suspension in funding is going to have a dramatic short-term as well as long-term impact. I think it is clear that if we fail to pass an AIR–21 bill similar to the one that this Committee has reported to Congress in the past by an overwhelming majority, that there is going to be significant problems in the aviation infrastructure in this country. And as one who, along with everybody else in this room, probably travels quite a bit, we are right on the edge of having a collapse in aviation if we don't spend the necessary resources that are already collected, already collected for the purpose of improving aviation infrastructure, if we don't spend those funds and do it now.
So I hope that you stand together with the Governors to pass an AIR–21 bill as quickly as possible. Thank you, Mr. Chairman.
Mr. DUNCAN. Thank you, Mr. Bass. One other thing, Governor Patton, you mentioned the UPS hub in Louisville. Several members of the Subcommittee went there about a year and a half ago, and were very, very impressed. Mr. Boswell tells me he has no questions at this time, so Mr. Pease, we'll come to you for comments and questions.
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Mr. PEASE. Thank you, Mr. Chairman. Just one question, gentlemen, and thank you both for your presentations today.
My question is somewhat related to an issue that was raised by Mr. Oberstar. That is, simply stated, this. In the recent past, we have extended for short periods of time authorization under AIP and related funds without doing any long-term extension that gives a number of years for planning purposes. And I guess I am biasing my question by the way I am putting it.
But my question to you is, even though you eventually get the money under the continued short-term extensions, does the fact that they are simply short-term, rather than long-term multiple year planning vehicles, have an impact on your ability to utilize the funds once you get them?
Governor PATTON. Absolutely. As you well know, these projects take many years, and you don't just fund one project totally and then go on to another project. You will have several different projects in process, trying to utilize the funds on an annual basis as they become available. So you may have three or four or five different projects in process, and not knowing when that next amount of money is available for sure, you just can't award a contract. Actually, you can't even obligate the design money until you know that the money is going to be out there.
So for the reason that Congress has multi-year authorizations for many different programs, this again is a place where we have to approach this on a long-term basis. This is not a one-time application of funds and is not a one-year planning process.
Mr. PEASE. Thank you. Governor?
Governor SCHAFER. Yes, sir, as you can imagine, North Dakota has a lot of really small airports all over and a few big ones. That has resulted in having the highest number of bridge-to-aircraft per capita of any State in the Nation. Because you have to slide around. The interesting thing that happens with the smaller projects, when the funds start and stop, you will tend to, when you get a pot of money, put it into the smaller projects because you can get them done.
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As an example, a result of that is major expansion of a cross-wind runway in the Bismarck airport, because of the fact that we diverted other funds into smaller airports, it became, that project, I believe went from an estimated $2 million to a completed project of over $6 million, because of the nature of it.
Mr. DUNCAN. Thank you very much, Mr. Pease.
Mr. Hutchinson.
Mr. HUTCHINSON. Thank you, Mr. Chairman. I just wanted to express my appreciation to the Governors here, but also the many Governors across the country that have supported in a bipartisan way AIR–21 and the prospect of its passing. I don't believe there is anything more important that we can do in Congress this year. One of the most important things we can do is complete the work on this bill.
I come from rural areas, where aviation is critically important. So I just want to express my appreciation to the Chairman for this hearing and the Governors for their presentations.
Mr. DUNCAN. Thank you very much.
One other thing I will mention is that in AIR–21, we put more money in there and did more than ever before in the history of the Congress for small and medium sized airports and also general aviation airports, and also under-served airports.
I am sure that both of you have heard some of the horror stories that we have about the cost of airfares to certain places. I remember early last year we held a field hearing in Wichita. It cost this Committee $1,000 to fly round trip from Knoxville to Wichita. That same weekend, according to the Washington Post, there was an ad for airfare, three days and two nights in Madrid, Spain, for $339. And there is all kinds of examples like that, I am sure probably some in your States.
But we are attempting to do more, because not everyone wants to live in the biggest cities in this country. Without good air service, though, it is awfully hard to recruit industry into certain areas. Have you all found some of these horror stories, and have you found difficulty in recruiting industry into areas where they don't have good air service?
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Governor SCHAFER. I just leaned over to the Governor and said, my ticket round trip from Bismarck to come out here is $1,500. So when we have the distances and the lack of competition, that is an issue for us.
When we go out to make an economic development presentation, to maybe someone who wants to relocate into North Dakota, or a company that's thinking of expanding in North Dakota, or simply going to a multi-national company that has some kind of a shared services arrangement or some kind of service management company in North Dakota or a division in North Dakota, we talk to them about expanding. One of the first issues that comes up is, can you get there.
Unfortunately, in North Dakota, you can't get there. We have to stop in Minneapolis no matter where you're going. So you have to either fly to Minneapolis or Denver to get to North Dakota. There is no direct flights.
Now, if we block out the opportunities to make other hops into smaller markets, it is a definite restriction, when people look at making investments in North Dakota. They want to have good air service. They're willing to look at a smaller local and regional airport for that air service. But of course, then they want it safe and available and in good repair, so their employees and their mail and their investment is a better deal in North Dakota as well.
It is one of the first things that comes up when we make economic development presentations to companies either to expand in our State or to bring in from another State.
Governor PATTON. Obviously, aviation service is extremely valuable. But in many parts of Kentucky, it is just not there, so we have to depend upon private aviation. And again, let me talk about my personal situation in the small community of Pineville, Kentucky, which is right in the center of Appalachia. And it is 150 miles any way you go, to Charleston, Huntington, Knoxville, Kingsport, Lexington, wherever you want to go, it is 100 miles before you can land an airplane in inclement weather.
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Obviously that's a detriment to economic development. Many companies want to know that they can get in to see their facilities. We are working very hard on developing that area, it is a coal-mining region that's deteriorating, it is my home. I became county executive in that county in 1982. They had just begun to build a mountaintop airport. We finally got it graded off, we finally got it paved, we got a 5,500 foot runway, we are building a road to it, and we are down to it. We struggled to get runway lights and we struggled to get a terminal and we are right down to one thing, and that's an instrument landing system.
I think it is only $400,000 or $500,000, it is not a sophisticated instrument landing system. But it makes all the difference in the world in being able to depend on that airport. Of course, that is the project that I referred to. But that one little airport gives us something that we haven't had to be able to market, and it is been a detriment. When we get the road finished, and we get this instrument landing system, then we can tell people, yes, you can get in here and out in inclement weather. So it is just absolutely vital to our entire effort, to try to develop economic opportunity in central Appalachia.
Mr. DUNCAN. Well, I will tell you, I spent a lot of my growing up time in Scott County, Tennessee, my grandparents had a 25 acre farm just below Amana, which is just below Somerset. And of the 10 children in my dad's family, three have since died and two went to Macon because they all had jobs, and three of them went to Knoxville. Only one of the 10 stayed in Scott County.
Yet I remember three or four years ago reading in the Washington Post that over half the people who live in big cities in this country said they would like to live in small towns or rural areas if they possibly could find jobs there. I think with the internet and WATTS lines and fax machines and so forth, a lot of these companies can locate in some of these areas they couldn't consider before, if there was a way to get good air service in and out of some of these places. So we are trying to do some of that, or at least help on that.
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I want to thank you. I know you need to get back to your conference, and I want to thank both of you for coming. You've been outstanding witnesses, and we certainly appreciate all you do for your States and for this country.
Governor PATTON. Thank you, Mr. Chairman. And thank you all for having the meeting today.
Governor SCHAFER. Thank you.
Mr. DUNCAN. We have a very distinguished second panel, which consists of the Honorable Bill Campbell, the Mayor of the City of Atlanta; the Honorable Susan Savage, the Mayor of the City of Tulsa; Mr. Mitch Surrett, Special Counsel to the Secretary of Transportation of the State of Oklahoma; and Mr. Tom O'Neill, an Aerospace Industry Deputy for the Department of Commerce, from the State of Oklahoma; and Mr. Phil Boyer, who is President of the Aircraft Owners and Pilots Association.
We thank all of you for being here with us. As I stated earlier, we will proceed in the order in which the witnesses are listed on the call of the hearing. That means that Mayor Campbell, we will start with you. You may begin your testimony.
TESTIMONY OF HON. BILL CAMPBELL, MAYOR, CITY OF ATLANTA, GEORGIA; HON. M. SUSAN SAVAGE, MAYOR, CITY OF TULSA, OKLAHOMA; MITCH SURRETT, SPECIAL COUNSEL TO THE SECRETARY OF TRANSPORTATION, STATE OF OKLAHOMA; TOM O'NEILL, AEROSPACE INDUSTRY DEPUTY, OKLAHOMA DEPARTMENT OF COMMERCE, AND PHIL BOYER, PRESIDENT, AIRCRAFT OWNERS AND PILOTS ASSOCIATION
Mayor CAMPBELL. Thank you very much, Mr. Chairman and members of the Subcommittee.
As indicated, I am Mayor of Atlanta. This is an important issue for all of us in this country, but perhaps nowhere more important than Atlanta. I testify on behalf of our city also as the chair of the U.S. Conference of mayors Transportation and Communications Committee. I am pleased to join my colleague, Susan Savage of Tulsa.
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We believe this is one of the most important issues facing this country today. Of course, I am here to tell you the Mayors strongly support this Committee's effort to secure final aviation agreement on AIR–21. I know this Committee has led this effort. We really want to add our voices to that.
I come to tell you that I oversee the busiest airport in the entire world, Hartsfield International Airport. It has been said if you're going to heaven or hell, you going to stop in there. Well, it may have changed a bit but last year we had 78 million passengers going through our airport. One in ten passengers in the United States goes through our airport. So issues for AIR–21 are critical for our economic growth.
I think all of us understand how much the Nation's economy is tied to air travel, and certainly no place more than Atlanta. Let me talk about our airport. We are the busiest, and we believe that's not just because of an accident, it is because of the vision of a number of leaders who provided the building of this airport many years ago. Now AIR–21 is a contemporary example of that same kind of vision.
We believe it is critical for the future of aviation in Atlanta, but also the Nation's infrastructure as well.
Performance of this airport is critical for the entire southeast, as you know, Chairman Duncan, even Knoxville, where Victor Ash is a good friend of yours and ours in this conference. We worked very hard to secure passage of a resolution to support AIR–21, just as we did for the course of the Nation's infrastructure bill, which this panel was so helpful in.
We calculate Hartsfield has a $15 billion annual economic impact on the region. And our region has grown by twice the national average. That gives you some idea about the importance of this airport. Simply put, the region's growth depends on Hartsfield and Hartsfield's growth depends on the passage of AIR–21.
Now, we mayors are increasingly concerned about delays, not just delays at airports, but delays in making certain that we move this legislation forward. In Atlanta, our entitlement funds under the AIP program and the payments under our letter of intent for our new runway are being held up by the stalled negotiations on AIR–21. As I discussed, our airport has a $15 billion annual impact in our region. That means that we have got an awful lot at stake here.
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I heard Congressman Oberstar reference a $2 billion airport project, and we are doing an $8 billion expansion at our airport. A lot of that is tied, of course, to this AIR–21.
The resources and authorities provided under AIR–21 are as critical to our airport as they are to the Nation's aviation infrastructure. We want to thank you, Mr. Chairman and members of this Committee, certainly Chairman Shuster and the Ranking Member Mr. Oberstar for their vision in moving this bill forward. It provides the framework for us in helping to close the shortfall in capital needs and respond to the rising demands of the traveling public.
If I can speak specifically to the features of AIR–21 which will insure our ability to finance our needs at Hartsfield and for other airport needs throughout the Nation's aviation system, AIR–21, of course, will insure that funds collected are expended on aviation needs. It seems almost common sense, but we believe that's a critical part of it. It provides certainty over time on what funds will be available.
It will triple annual entitlement grants on the airport improvement program that flow to the primary airports of which Hartsfield is one. It will increase the availability of AIP discretionary funds to support significant investment in the airports, which of course, also creates jobs in the construction industry as well. It allows airports to increase the passenger facility charges, or PFCs. It will double AIP entitlement grants for cargo airports.
While we are number one in passengers in the world, we are only number 17 in cargo. And much of the expansion, which will of course continue to spur our economy, is in the cargo expansion area. It will increase funding commitments to noise mitigation, a course of critical issue. It will make changes to the AIP program to ensure funding for small airports and strengthen the national system.
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These provisions explain why the Nation's mayors are so strongly in support of this legislation. I was pleased to offer a strong policy resolution, which I referenced earlier, which conveys the mayor's strong support for AIR–21. We would also point out that we include our support for continuing fair share allocation of general fund revenues in support of AIR–21 investments in FAA and other airports.
Let me make a few additional points about the legislation which are important. Like the debate on TEA–21, we are strongly committed to the principle that the Aviation Trust Fund revenues be expended for the purposes for which the revenues were collected. This would ensure sizeable economic benefits be used only for aviation needs.
Now, we are also familiar with the continuing debate about PFC. These are not taxes, these are fees from users of these assets. Local governments could not function in the standard that some are suggesting in the debate on these fees, that they are taxes. Well, how could cities operate the many user based systems and other enterprise functions like water, storm water, wastewater, electricity, under this fairly difficult view of the world.
In calling for an increase to $6 from the present levy of $3 in order to help meet our local capital needs, I find some irony in the fact that the air carriers are allowed to levy $15 or $20 surcharges on tickets to cover the recent spike in fuel costs, while an airport is not allowed to raise their fees to meet needed expansion goals.
So Mr. Chairman, let me again reiterate how important the AIR–21 legislation is to the efforts to secure our economic future. I was pleased that the Administration in its recent budget request is proposing additional funding commitments to elements of the AIR–21 legislation. Mayors will continue to press the case for why action on AIR–21 legislation is so critical at this time.
I note that in a recent State by State survey, it reveals that $1.2 billion in projects could be lost with this construction if AIR–21 is not passed very soon.
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Again, let me thank you, Mr. Chairman and members of this Subcommittee, Chairman Shuster and Ranking Minority Member Oberstar. Mr. Shuster and Mr. Oberstar came to Atlanta last year, I think it was last year or the year before. We enjoyed their presence. They flew in and out of our airport without any delay. We want to make certain that continues.
Thank you very much, Mr. Chairman.
Mr. DUNCAN. Mayor Campbell, thank you very much. It is an honor to have you here with us.
In fact, some of our Aviation Subcommittee was down in Atlanta at a meeting with Delta and visiting their operation a year ago this month. I was in the Atlanta airport last Thursday. I brought my eighth grandson down there for one of the world series games, but I hate to tell you that, I was going to bring my older son down to the Superbowl, but then when they told me they wanted $650 for two tickets, I thought that was too steep. If I would known what a great game it was going to be, I would have paid it. I am sorry I didn't.
[Laughter.]
Mayor CAMPBELL. Well, the great game was only a couple of yards short. It was a sensational time, even though the weather was a bit of a problem, people were able to get in and out of that airport effectively.
Mr. DUNCAN. Thank you very much.
Mayor Savage?
Mayor SAVAGE. Good morning, Mr. Chairman and members of the Subcommittee. I am Susan Savage, mayor of Tulsa, here today in my capacity as mayor but also as a member of the Tulsa Airport Authority, on which I serve, and a member of the executive board of the U.S. Conference of Mayors.
I am pleased to join with Mayor Campbell as the Nation's mayors believe that AIR–21 is a very important piece of legislation addressing issues of infrastructure, job development, public safety, equity and economic impact. Two of those areas I wish to address specifically today.
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Mr. Chairman, two years ago, the Conference of Mayors joined with the National Association of Counties to secure new information on the output of the Nation's city, county and metropolitan areas. We undertook an analysis to provide other policy makers with a more complete understanding of how city-county-metro economies drive the Nation's economies and develop what we call a gross metropolitan product in GNP numbers for the Nation's more than 300 urbanized areas.
The findings are compelling. For example, if city-county-metro economies were ranked with nations, 47 of the world's top 100 economies would be U.S. metropolitan areas.
The economy of the Dallas metro area, exclusive of Fort Worth, surpasses Thailand. The Atlanta metro area surpasses the economy of South Africa. And the Tulsa area is now nearly the size of the economy of Vietnam or Kuwait.
In 1998, metropolitan areas generated 84 percent of the Nation's employment, 84 percent of the production of goods and services, and 88 percent of the income. For the period from 1992 to 1998, U.S. metro economies accounted for 89 percent or over $2 trillion of the Nation's economic growth. These areas, I should note, represent about 80 percent of the Nation's populations. The figures underscore the aviation investment required to maintain these healthy economies.
Tulsa's situation is that it has a very rich and vibrant history in the aviation world, dating back to the 1920's, when W.G. ''Bill'' Skelly and Wake Phillips, two well-known oil men, solicited from their friends the initial investment to purchase 390 acres of a wheat field and turn it into what is now known as Tulsa International Airport. Classified as medium hub airport, we annually serve more than 3 million commercial passengers, drawing customers from four States, and have the most active airport in the State of Oklahoma.
Tulsa International is also Oklahoma's economic hub of prosperity as one of the largest aerospace and aviation centers in our region. There are more than 13,000 people employed at our airport, nearly 10,000 of those American Airlines and Boeing. The aviation industry, with more than 300 businesses in Tulsa, is a key reason why Tulsa is ranked eighth nationally by Site Selection magazine for new and expanding industries.
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Tulsa is also at the center of our global trade. In addition to serving commercial passengers and handling more than 60,000 tons of air cargo, Tulsa International is bordered by three interstates, the main line of the Burlington Northern and an inland port just five miles away.
Tulsa International generates more than 40 million annually in airport fees and taxes for the Federal Government. Yet in 1999, Tulsa received only 11 cents back for every dollar we sent to the Federal Government. Please do for the airports what you did for surface transportation in TEA–21. Join with local governments to rebuild an aging system through a partnership based on equity in funding and re-investment in airport infrastructure.
Further, Tulsa International must use its passenger facility charges to underwrite entire capital projects. Let me give you a quick example. Over the next five years, Tulsa International will undertake $10 million in basic housekeeping projects on our 22 gate airport terminal. Our roof, which needs to be replaced, has to be deferred, deferred maintenance, because with our PFCs, we can only stretch those dollars so far.
However, if there were sufficient aviation funds, I would be quick to request a $15 million Federal grant and provide more than the local match through the projects already planned, turning a $10 million patching job into a $25 million major reinvestment.
In conclusion, I would like to remark on the effort by the Chairman to spur competition and support the carriers. AIR–21 includes a loan guaranty program to help airlines to buy regional jets, if they use them to serve non major hub cities. And it creates new programs to help underserved airports and promote their air service. These are important elements of AIR–21 and I would encourage you to strengthen them by including new entrant carriers in those loan guaranties, and by removing unused or under-utilized slots at major airports, assigning those slots to carriers willing to provide non-stop service to unserved or under-served communities.
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I would like to thank you, Mr. Chairman and members of the Subcommittee, for your leadership in crafting a substantial aviation bill. I invite you to Tulsa, I have spoken to Mr. Shuster about this, to see first-hand the depth of support the aviation industry has among airline passengers, the business community, the government sector and the commercial interests there.
Thank you very much.
Mr. DUNCAN. Thank you very much, Mayor Savage. It is a pleasure to have you with us, and I appreciate your entire testimony, but especially the last part. It is unusual that we have even one witness from Oklahoma, but we have three here today. I might just mention that Senator Inhofe used to sit next to me on this Subcommittee, and if he hadn't gone to the Senate, he would have been Chairman of this Subcommittee. But he is over there now.
We are pleased to have two representatives of the Governor of Oklahoma here with us today, one is Mr. Mitch Surrett, the Special Counsel to the Secretary of Transportation, who will be our next witness.
Mr. SURRETT. Thank you, Mr. Chairman and members of the Committee.
I want to thank you for this opportunity to be here today and to give our support to AIR–21. Oklahoma enjoys a strong historical tie to aviation and the aerospace industry. One of every 13 workers in Oklahoma owe their jobs, either directly or indirectly, to aviation and aerospace. The industry provides more than 163,000 jobs and $4.7 billion in payroll.
Oklahoma ranks fourth in the Nation with 125 public airports and first per capita. We are blessed with a considerable aviation infrastructure, but with this blessing comes a significant fiscal responsibility. Unfortunately, Oklahoma is a donor State, with less than 20 cents being returned for every dollar that we contribute to the Aviation Trust Fund. Recently, Governor Keating's guidance and support enabled Oklahoma to enact bipartisan legislation which will triple the State funds designated to aviation infrastructure development in the next three years.
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The passage of AIR–21 will complete commitment by allowing communities, States and the Federal Government to join in cooperative partnership to reverse the rapidly deteriorating condition of our airports and duplicate the historic advances made by TEA–21. Mr. Chairman, as you know, Governor Keating supports the passage of AIR–21 and has worked for successful passage of this by the legislation. Secretary McGill echoes this support as well.
At this time, I would like to allow Tom O'Neill to make some comments.
Mr. DUNCAN. This will be Mr. Tom O'Neill, who is Aerospace Industry Deputy for the Oklahoma Department of Commerce.
Mr. O'Neill?
Mr. O'NEILL. Good morning, Mr. Chairman and members of the Committee. Thank you for this opportunity to address the Committee.
Very briefly, I would like to talk a little bit about how AIR–21 is critical to the economic development of Oklahoma. Oklahoma has not kept up with the national economy. The average wage of a trained worker in Oklahoma is 20 percent lower than the national average. Closing this gap is a high priority for us. AIR–21 is critical in helping us achieve three important objectives of our plan to close this gap.
First, improvement in business access to rural communities. Second, expansion of the industrial capability of our major airports, and third, modernization of our major metropolitan airports, so that they safely meet the needs of the traveling public.
Rural communities are characterized by both high unemployment and low paying jobs. The energy and agriculture sectors that provided the economic growth engines for these communities in the past just aren't enough to drive the growth in our new economy. We must create more and better jobs in these communities.
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Passage of AIR–21 will help improve metropolitan and rural areas by providing the necessary Federal funding to grow and expand our aviation industry. For business to succeed in rural communities, we need modern education, communication and transportation. Oklahoma has substantially increased investment in all three of these elements. We are counting on AIR–21 to help us in the aviation area by providing infrastructure necessary to support jet access to these rural areas just as TEA–21 helped meet our highway system needs.
Oklahoma is 70,000 square miles and has over 100 airports serving rural areas. It is impractical to upgrade every airport in every town. So we have developed a plan that will upgrade selected airports and still provide 90 percent of the State's population with a 25 minute commute to a jet service airport. We are counting on AIR–21 to help us make this plan a reality. This will have a major influence on our ability to expand existing business and attract new business to these rural areas.
We know the expansion of commercial and corporate aviation will continue for many years to come. This, coupled with the fact that we have an older fleet still flying and flying longer, will require higher and better quality maintenance repair and overhaul to keep the fleet safe and efficient. In addition to expanding our supplier base through aircraft engine and avionics and manufacturers, we will concentrate on this requirement of quality maintenance for the commercial and corporate fleet.
The most immediate and ambitious element of our plan is to develop the Will Rogers Airport in Oklahoma City to a modern, high-tech center for maintenance, repair and overhaul for commercial aircraft engines and avionics. The State of Oklahoma, Oklahoma County and Oklahoma City will invest millions to develop a world class industrial park at the airport. Our vision is a complex that employs 10,000 workers with over $500 million invested. Each 100 of those aerospace jobs will create another 126 jobs by the multiplier effect.
Developing the industrial capability of Will Rogers will impact the entire central Oklahoma region, creating over 22,000 jobs, $400 million in payroll, and $20 million in taxes. The aerospace industry needs passage of AIR–21 now. The Oklahoma economy needs it.
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Finally, our metropolitan airports are the 60th in the Nation. Current passenger demand has already exceed capacity, and these older facilities must be upgraded to handle the increasing passenger and cargo demands of the future. We need adequate funding to make necessary improvements.
In summary, Oklahoma has a plan to participate fully in the new economy. But we need AIR–21. We thank you for your time and attention, and commend you and the Committee's work on this vital legislation.
Mr. DUNCAN. Thank you very much, Mr. O'Neill. Those are some good goals, and we are trying to help you and Mr. Surrett. Thank you both for being here with us.
We go now to one of our favorite and most frequent witnesses, Mr. Phil Boyer.
Mr. BOYER. Thank you, Mr. Chairman. I appreciate being here. As you know, I represent the Aircraft Owners and Pilots Association. There are 360,000 members almost, now, a record for us this month, that own and fly general aviation airplanes, in many cases, for personal and business reasons. And in many cases, very small airplanes, airplanes that do frequent some of the airports talked about earlier by the Governors and also use small and large airports for economy, for business and for personal reasons.
I would like to turn to a plane, though, that's not quite like the airplane that most of my members fly. I think you'll recognize this one. We have unpressurized airplanes in the main for general aviation. This one I think is pressurized, but before we talk a little bit about why we need AIR–21, let me look at this year's Administration budget for aviation.
I would maintain when maybe they were up there at the high altitude, the oxygen system wasn't working very well, because up came the idea that user fees will fix all of our problems, we'll start charging the users of the system for each part of the system. What's interesting is that you, this Committee, all of Congress, has five times over seven years said absolutely no to user fees. So once again, was it hypoxia or what? But that's the budget that's delivered for next year from the Administration, $1 billion dollars in user fees for fiscal year 2001, $9 billion in user fees by fiscal year 2005.
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Now, there is language in the five volumes here that talks about, we'll transition from the present excise taxes. But you know, in poring over this, our staff could find absolutely no reduction of the passenger ticket tax, the head tax, the cargo tax, or the avgas or jet fuel taxes. And more devastatingly than ever, it eliminates one thing that AIR–21 is fighting for, and you heard it earlier today, the general fund contribution total.
Just to reiterate, the general fund contribution is historic. It has gone on for more than two decades. And there is public use of the system, whether or not you ever fly an airplane. You've heard talk about the UPS base and how people receive packages. Those people may never get on an airliner, and yet their general fund contribution keeps going a very vibrant package delivery service.
The military uses about 15 to 20 percent of our FAA budget. That's contained in general fund contribution, along with safety and security.
The Administration budget next year, has eliminated this fund contribution. Now, let's look at the trust fund balance. Apparently, the Administration didn't look at it. This year, $9.4 billion, in five years, $17 billion, in less than ten years, $32 billion. And if you read Aviation Daily, the news is just in that actually those numbers are low because they calculated at the end of this last fiscal year the trust fund was at $12.7 billion.
Now, what happens when our members who have paid into the fuel taxes all these years look at this trust fund? They say, why new taxes? Why user fees when we have this fund at our disposal.
Mr. Chairman, I wasn't sure you'd be here, because this picture doesn't do much justice of you in person, but obviously, you have said, let's make this the year of aviation. First of all, you wisely said, let's continue the general fund contribution. And also, let's spend the trust fund on our needs. Let's take the fund off budget. And with great success, it passed the House by a three to one margin last spring.
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Now, here's what it is all about. People on the other side of the Hill don't see it quite this way. The red line, without getting into the exact numbers, the red line is historic FAA funding over time. There was a period that AIR–21 would produce the income levels and revenues for the FAA that are needed to spend on these projects that all our good previous witnesses have testified on.
Now, the delta is between the red line and AIR–21. The Senate has come back, as you well know, as a matter of fact, I did not, like the Governor stated, go to the White House. I am not that welcome there. But I did visit Senator Domenici and Senator Stevens over the last week. I am not sure my reception was any better there.
But what we really pointed out was, if you look at historic funding, and you look at the current set of offerings, the Senate is really giving us what we already have. We need that delta between historic funding or where we are with the blue line, and AIR–21.
As Chairman Shuster knows, we rallied for only the third time in the ten years that I have been president of AOPA, our entire 360,000 AOPA membership. These are voters in each and every one of the States represented by some of the Senators who are not so supportive of this bill. We didn't ask them to write to you, three to one you passed this in the House, but we asked them to direct their letters to their two Senators in a national pilot alert which was mailed just about three weeks ago. Every member weighed in, we hope, on this issue.
And we are getting at this time some copies of wonderful letters. Here's one from Georgia. Put trust, for instance, back in the trust fund. Spend the money on what it was collected for, says a member in Connecticut. And a doctor indicates that releasing the funds makes flying safer for many individuals like myself.
How would we use some of this money? Well, Congressman Oberstar, you well know that in the 1970's and 1980's, you fought hard with us on a big project which was the flight service stations where we got our weather information and still continue to get it. There were over 300 stations during those years, and they were consolidated into 61 automated stations. Perhaps it is progress, perhaps it was technology taking over.
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But remember in this consolidation new equipment was promised. We weren't going to stay with the old, I call them 1970's Radio Shack equipment, to provide weather for our members, airline pilots and the military. Well, the project was first abandoned in 1984, and now during the 1990's, we have got a project called OASIS. I won't bother you with the acronym here in Washington, but it is a project to upgrade the computers in the flight service station.
Look at this. This is the kind of console that would be in these stations. Once again, after next year's Administration budget, this funding has been cut by 36 percent. This is what the controllers in our flight service stations are currently working with, a hodgepodge of outdated equipment that have been eclipsed several times over with today's technology. This is OASIS, what's planned for the future, but may be as much as five years off. Windows-based, state of the art graphics. This is a look at the kind of picture that a flight service station briefer today has to look at to get the weather. This is a picture of, when if OASIS were installed, they would begin to be able to interpret.
As a matter of fact, I would maintain that today, many of my members, many people who fly, find this kind of service almost better in terms of weather graphics than what our specialists in the flight service stations are looking at right now.
How about the system of automated weather gathering? Chairman Duncan, we had talked about this, remember, on the California airport, Arcadia, California, where we were concerned about the loss of the human observer. Well, we now have these automated centers. But you know what? You can only receive them from about 20 miles away. You can't be planning a flight to a city that has one of these and be able to call it up as part of the National Weather Service.
The cost for this is low, but no money has been allocated yet. Let's not forget that when it comes to aviation safety, we have talked about it in this hearing room before, weather is one of the prime factors in both fatal and total accidents.
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The wide area augmentation system, the Governors and these airport people have talked about it already, this is the preference of GA. It would provide many airports with a precision approach, just as we talked about earlier in the State of Kentucky. It would provide us tremendous resources in oceanic. And we are in total support.
This is the use of our satellite system with augmentation. As a matter of fact, we looked up, in Tennessee, the need right now for an ILS at Athens, $1.5 million and the WAAS program will give category one approach to that airport with no further expenditure. It has been validated by Johns Hopkins that this system works. The airlines, the ATA, the FAA and AOPA all sponsored a study. And back came Johns Hopkins with, GPS will work in this environment.
Once again, AIR–21 provides the kind of funding needed for the WAAS program. We want to move forward with this as fast as feasible and then get these approaches to the airports that you heard earlier today so sadly needed.
Airports, well, I say we are the little guys, we don't fly the big planes, we are being run over by some of the funding that's being taken away from us out of the AIP program. As a matter of fact, funded at least year's level, and already raided, as you heard, for administrative costs of about $88 million. Funding for these airports is critical.
We have talked in this hearing room also about diversion of funds. Certainly we don't need the Administration's budget for 2001. Certainly we need a way to be able to get our hands on the money that we have been putting into the trust fund over the past two decades. And certainly I know our general aviation members are supportive of this.
I would also like to turn and say that, while I have talked with a couple of Senators that weren't in the State of Oklahoma, I just was chastised by Senator Inhofe about a week ago in his office. Because, he said, you sent my members this letter, and I am for that bill, for heaven's sake. So congratulations on having at least half of that State's Senatorial contingent support.
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Thank you.
Mr. DUNCAN. Thank you, Mr. Boyer.
Mayor CAMPBELL. Mr. Chairman, there is a disclaimer that Mr. Boyer's testimony does not represent the views of all the members of this panel. I want to be clear that he speaks for himself and his association, not as a part of a panel that was combined here, Mayor Savage and myself.
Mr. DUNCAN. We understand that.
Mr. Chairman.
Mr. SHUSTER. I just want to thank all of you very much. You've said it all, and thank you for your tremendous support. Without your support, we wouldn't be moving along.
I can report with cautious optimism that I had a very productive meeting yesterday with the majority leader in the Senate. Hopefully, knock on wood, we're moving in the right direction.
Mr. DUNCAN. Thank you very much, Chairman Shuster.
Mr. Oberstar.
Mr. OBERSTAR. Thank you, Mr. Chairman. That's encouraging news from our Chairman.
Mayor Campbell, 42 years ago, your predecessor came to the United States Congress to appeal for funding for construction, from the Federal Government, for construction of airports. Prior to 1958, only cities and a handful of States, at the most, seven, provided funds for airport construction. The Federal Government did nothing.
And as Mayor Hartsfield appealed to the aviation, it wasn't even an aviation committee, because aviation was one of the general categories of jurisdiction of the Commerce, well, then called Interstate and Foreign Commerce Committee. And Mayor Hartsfield said, there is a need to double airport capacity in the United States. At the dawn of the jet age, we do not know what it's going to take to have quality of runways, whether we're going to board aircraft from the ground or from some platform.
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He went on to say, we have to do a better job in maintaining our airports. Because we can't afford to have one of those jets roll down the runway and ingest a horseshoe or some other debris on runways we have now. He was a visionary.
And when he testified, there were 58 million passengers in the Nation's airways. Now the regional airlines carry half again that many. And of course, general or commercial scheduled carriers are up to 656 million as of last year in the United States.
So when you talk about stop and go financing, when you say that funding process, the levels for aviation are inadequate—look at when they began this process at Lockheed. The surplus in the trust fund had nearly 100,000 hours of delay. Chicago led the world and led the Nation with 100,000 hours of delay. Atlanta was just behind.
Where do you stand now? What are the needs in Hartsfield Airport?
Mayor CAMPBELL. Well, Mr. Oberstar, first, one of the things that comes along with being the busiest airport in the world is probably the worst delays as well. We had 75 million passengers last year, it's estimated that by the year 2015 we'll have 121 million passengers at our airport. That's assuming that we're able to proceed with our $8 million expansion.
Mayor Hartsfield was a visionary. When most mayors were looking at expanding the interstate system or passenger rail as the primary means of transportation, he saw air traffic. It's made a tremendous difference for our economy, $15 billion a year, almost 56,000 people employed in and around our airport. It's the largest economic generator in the south.
With all that being said, we must have the ability to expand in order to address some of these delays. The improvement in the aviation system, the improvement in our runways, we are currently slated to do both a new fifth runway, new terminals, new rental facilities, new support facilities, and as I indicated, the expansion of our cargo opportunities. All this will spur our economy. It's not just an issue of getting passengers in and out, as you know, Mr. Oberstar. It's also about the vital role that the airport plays in the Nation's economy.
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If you talk about $8 billion worth of expansion, think about the tens of thousands of jobs that go along with that expansion, as well, of course, addressing the issue of delays. Mayor Hartsfield saw air traffic, a visionary, Mayor Young, who served with you in this Congress, saw international expansion. We now have almost 20 different international carriers.
We just inaugurated the first direct flight from Atlanta to an African city, that's Johannesburg, with South African Air, through Delta Airlines. We're expanding throughout the entire world. But that requires that we have the necessary funds as are included in AIR–21, to finance that expansion. Each time we expand around the world, we not only, of course, bring people here, but we allow the opportunity for international economic growth. That's of course another opportunity for spurring this Nation's, and of course, our region's economy.
We need the funds. I know you, of course, and the Chairman, Chairman Shuster, have been a part of the effort to push this issue forward. We only urge that you push forward as quickly as possible, because of the delays that will be occasioned not only in our airport expansion, but throughout this Nation, if we miss this critical season for moving forward. There are many airports, many areas that will be affected by the rainy season, the weather, if we don't take advantage of this window of moving forward with these financial plans.
Mr. DUNCAN. Thank you very much, Mayor Campbell. I join Chairman Shuster in expressing our gratitude for the warm welcome you extended us during our tour over two years ago now in Atlanta.
And all the mayors, Mayor Savage, all the mayors that express their support for our efforts in the trust fund. I've been to your great city, Tulsa, as well, to view American Airlines' computer reservation center, the SABRE system. You are indeed blessed to have some people who saw beyond the oil patch, the dawn of civil aviation, provided that space to launch what was then a new-fangled idea. It certainly has benefitted your community.
Mayor SAVAGE. Thank you, Mr. Oberstar. I would comment that SABRE systems just announced a half a billion dollar expansion in Tulsa shortly before Christmas that they will undertake over the next several years. I think the importance of the discussion we are having here today, they are going to expand at their airport location as well as in an industrial park in Tulsa.
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So we are looking at not only just the airline passengers who are served directly by the activity of the airport, but also the reservation system and the accompanying telecommunications network that has been established as a result of having an airport present. So we see first-hand the economic impact. Mayor Campbell and I are in the situation, we are actually operating airports, we serve and function in that capacity to oversee how on a day to day basis they will serve the traveling public.
Mr. OBERSTAR. Thank you very much. Atlanta is one of the great airports of the world, and we need to make possible its continued growth and expansion and the same with Tulsa.
Phil, you've been, as Chairman Duncan said, a frequent witness before our Committee. We appreciate your strong support and the active role your members play and the responsiveness that they have to your call, and frequent and wisely so that those calls are for a massive assault on Washington. This is a campaign for the Holy Grail once again.
I just want to say that on the fees, I was interested in your slide presentation, that's a little budget gimmick. The Reagan Administration used it, the Bush Administration used it, this crowd is using it. And they know darned well it's not going to pass, but they throw it in. They all knew it, and have done it for years. And I sat in Mr. Duncan's seat there and said, that's not going anywhere. He's sitting in there saying, that's not going anywhere. And we all know that.
But they had to put a budget together at the last minute, they couldn't make the numbers come out right. I don't agree with the way they have approached it. But they have also been realizing that we're going to do something different. And Secretary Slater is working very, very cooperatively with us.
If I read rightly, your assessment of the needs of general aviation, OASIS is right now the number one piece of technology that benefits general aviation, that and WAAS.
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Mr. BOYER. I would say globally WAAS benefits all aviation. General aviation, certainly on the macro level it's WAAS.
Mr. OBERSTAR. The Appropriations Committee last year for the current fiscal year cut, it wasn't the Administration, the Appropriations Committee cut WAAS 50 percent, I mean, OASIS 50 percent. This year the Administration has come back with a reduction figure, and they aren't going to get that money, so they cut it further.
Mr. BOYER. And yet the equipment is completely ready to go. I've sat in your office about a year ago and said, we have looked at this, there are some problems with it, we're going to try to get it on track so that it serves our members well, they're the primary users. And it is on track. The union is for it. Now it's just getting the money to put this design that has all been proven into the field and get it working.
Mr. OBERSTAR. I also appreciate your reference to our efforts to save the flight service stations now that they have been consolidated. I remember going to Princeton in my district, where the eight flight service stations were consolidated statewide, consolidated into this one. I walked into this building, it was like this, a room about this size, a little bit smaller, actually, with all these stations. There was no technology, very few people.
I went back a year later, having badgered the FAA to put the equipment in, now the equipment was there, there were no people. It was like the neutron bomb had gone off. The equipment was there, but the people were gone.
Now they have the people and the equipment is old, and they can't keep up. I've stood and plugged in with controllers and listen to them telling a DC–10 passing overhead, sorry, I can't give you that information, you'll have to ask the next station, we're too busy here. And they were, all of them, too busy. And they don't have the high speed equipment that they need, the capacity they need to serve both general aviation and commercial aviation. We have got to make those available.
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Last comment, last remark here, is to give you an opportunity to respond to the criticism we hear again and again that general aviation is responsible for all these flights, 26 percent of the system, yet you contribute only 1 percent of the revenues with the fuel tax, and why shouldn't we have a system of fees that hits general aviation. I will let you, you're the most eloquent proponent of that issue, I would like you to put that on the record.
Mr. BOYER. Well, first of all, when we talk about using a system in the main with those numbers that I produced, general aviation has really very little impact on the system. We're not flying the flight levels, we're not flying instrument flight plans, in the main, which is mandated, of course, for all airline services. We're not using the larger airports in the main, we're using smaller airports and providing service to many of those airports that the Governors talked about in their States.
Matter of fact, I'm going to be in Fargo, North Dakota this next Saturday night and Sunday, and general aviation is the primary way to get to some of the places I will be on this upcoming trip.
But in the main, general aviation does not have an impact on the system. I think you realize that if we eliminate all general aviation flying, what part of the system would you dismantle? You might dismantle the flight service stations. You might, although they're used heavily by the military and as you said, they're used some by the airlines, but they have their own private weather.
If you take our fuel tax that we pay into the system, it just about covers the cost of the flight service station. So we're a marginal user. We use control towers, but usually those towers are there because there is commuter or large airline service to that airport. Most general aviation airports are non-tower, most of the flying is VFR. And in addition, of course, we provide services that we don't talk about, the businessman who flies to airports that are not served, even with essential air service dollars.
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I might make my apologies, by the way, looks like I relocated Athens, when I said Athens, Kentucky, I meant Athens, Tennessee, which is a good example of an airport that could be certified for general aviation.
Mr. OBERSTAR. Thank you very much.
Thank you, Mr. Chairman.
Mr. DUNCAN. I wondered about that, Mr. Boyer. Athens, Tennessee is in my district. Let me go first to Mr. Pease.
Mr. PEASE. Thank you, Mr. Chairman.
I want to thank the panel for sharing with us, but I have no questions.
Mr. DUNCAN. All right, thank you very much.
Let me start by asking Mr. Surrett and Mr. O'Neill, we heard Governor Schafer say that there's one estimate that there are $1.2 billion worth of projects on hold in 33 States that they surveyed. Are any projects on hold in your State and have you made any estimate on the amount of capital improvements that need to be made in aviation in Oklahoma at this time? Can you prioritize those capital improvement needs?
Mr. SURRETT. Yes, Mr. Chairman, we do prioritize our needs. I think our fiscal year 2001 budget, which is about $23 million, this is our aviation and aerospace mission, is on hold. All those projects are on hold until we know what the funding levels are going to be.
But we do have a capital improvement program. It's a five year program that is about $240 million. It includes Federal, State and sponsor dollars.
Mr. DUNCAN. Do either of you find in your economic development work that air service has been a factor or a problem?
Mr. O'NEILL. I think I can echo what's been said by previous speakers. Air service is one of the first questions a business will ask when they think about relocating or expanding to a rural or metropolitan community. We address that frequently, and we push for better air service all the time, both in the metropolitan areas and especially the rural areas, where there may be absolutely none.
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Whether you're talking to an international company or a domestic company, one of the primary concerns of these corporate executives is how they are going to move about the country quickly and efficiently. It's an important question and that's one of the reasons we're asking for funding.
Mr. DUNCAN. Mayor Savage?
Mayor SAVAGE. I can certainly add to that. We presently have a start-up airline hoping to begin operation in the State of Oklahoma that will benefit if they can generate the amount of private investment they are seeking from the bill the Governor sponsored and the legislature passed last year to offer tax credits.
Interestingly, they are supposed by primarily, obviously the urban centers, but there's a tremendous amount of support from the rural areas, because people who live 50 to 100 miles from Tulsa or Oklahoma City have to drive into the city, have to then park, have to then catch a flight to Dallas, St. Louis, some hub city. When those hub cities have delays it affects us, too.
So their goal is not to compete with the major airlines, but to really provide a service for a market that does exist. Direct service to the east coast will be where they begin first. We are very excited about that prospect. Certainly Tulsa is the economic generator of the State, deals on a very regular basis with how are we going to fund the capital needs at our airport and how we are going to address both the needs of the traveling public and the business sector of our community.
Mr. DUNCAN. How many passengers do you have at your airport now?
Mayor SAVAGE. I think I gave you that number and it went right out of my head. We have over 3 million commercial passengers on an annual basis.
Mr. DUNCAN. And Mayor Campbell said that the Atlanta airport needed to have an $8 billion capital improvement program. What are your plans there?
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Mayor SAVAGE. I have a laundry list of projects in excess of $100 million to $200 million just over the next five years. One of the largest, obviously runway improvements, terminal improvements, the plant expansion opportunities and noise mitigation. All of those are very important projects to us.
I mentioned a very small one, which showed the relationship of our reliance on passenger facility charges, and if the trust fund were made available on more projects, more dollars for projects, we could expand that to a $25 million major rehabilitation program because of what we're currently doing with our passenger facility charges.
So as a donor airport, 11 cents last year for every dollar, we are heavily subsidizing the aerospace industry across the Nation, which we are pleased to do. But certainly we hope to see through AIR–21 some of those dollars come back into our airport.
Mr. DUNCAN. Thank you.
Mayor Campbell, as many times as I've been in the Atlanta airport, I really don't know the situation on your land there. Do you have the land or do you have enough space to expand, to grow from the 78 million passengers to 121 million passengers?
Mayor CAMPBELL. Mr. Chairman, you have been going in and out a great deal and know that the airport is tightly congested. We got the approval for a 6,000 foot runway, a fifth runway. We are now expanding that from 6,000 to 9,000. So that will allow us for the next seven years for our expansion growth.
Thereafter, any issues with regard to further expansion would simply have to be looked at very carefully because of the issues of noise, of course, and just the configuration of the interstate system around the airport. As you know, it's ringed by 285, by 85 and by 75. So all of that would have to be explored further than what we're doing right now.
But we have the current approval for 6,000 foot runway, a fifth runway, but we are applying and have gotten the approvals from neighboring jurisdictions as well as now applying for the environmental impact for 6,000 to a 9,000 foot expansion for our fifth runway. That would accommodate all the current expansion needs for the next five to seven years.
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Mr. DUNCAN. Have either one of your airport directors, mayors, have they told you what would be the effect if something like AIR–21 isn't passed and basically what someone has said, they just stay with the status quo and we really don't increase aviation spending much at all?
Mayor SAVAGE. We on a monthly basis have a discussion about the impact of that. And the most alarming impact is on deferred maintenance. We have tremendous maintenance needs. Our airport is aging. And improvements to the runways, improvements to the terminal, every aspect of the airport operation is affected by those delays.
So we discuss it on a very regular basis.
Mayor CAMPBELL. Mr. Chairman, as you can imagine, one in ten passengers in America go through our airport. It's already the most delayed airport in the country. If we do get funds that are necessary through AIR–21, it would contribute to, I think, intolerable airport delays, as well as, of course, stopping what really is the most significant economic generator in the southeastern part of the United States. It is critical.
As we thought TEA–21 was certainly the most important infrastructure issue, I don't think there's any doubt given the preferred mode of transportation for most Americans today, that if we do not get a fairly immediate resolution of the AIR–21 issue, it will not only delay passengers throughout the world, because of Atlanta being the number one hub airport as well, but it will also stymie our economic growth, which is fairly substantial.
In 1998, our region grew at twice the national average. In large part, that's because of our airport. Routinely, you ask the question about air service and how important that is for economic growth. As we have expanded our economy, it is the number one issue for all of the companies and business executives that come, our airport. We have more direct flights to 75 percent of the Nation than any other place. It allows for tremendous opportunities for both regional growth and international expansion as well, with 20 international air carriers.
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It's simply inconceivable that this massive economic generator, not only for our region but for the Nation, that we would be stymied by these stalled negotiations in Congress which we hope will be resolved fairly soon.
Mayor SAVAGE. There is from the paying public's perspective, and it's an issue I certainly encounter, the question of, if we are paying dollars to improve our airport, where do those dollars go, why do they not come home, why do we not see some impact from those. All of the economic development impacts that Mayor Campbell stated certainly are apparently in Tulsa as well.
Mr. DUNCAN. Mr. Boyer.
Mr. BOYER. I think one place where Mayor Campbell and I can certainly agree is that he has a vibrant group of airports because Hartsfield. The city is served well by several large reliever airports. The same question that applies to Hartsfield would apply to general aviation. Without a continuing improvement, maintenance, etc. of those airports, which are vital relievers to take the traffic flow out of Hartsfield and put it in Peachtree, DeKalb, Fulton County and others, you would have total congestion right at the moment.
Therefore, AIR–21 is very important not only for the large air carrier airports, but also in the Atlanta area and many metropolitan areas for the reliever system.
Mr. DUNCAN. Well, I will tell you, it certainly highlights the problem we face when we talk about just Atlanta needing $8 billion worth of improvements in the next 15 years. That's over $500 million a year, something like that. That's just one airport.
But Mr. Boyer, you mentioned, and of course we talked about how air passenger traffic has gone way up, air cargo traffic has gone way up. You mentioned general aviation. Your membership is at a record level, and that's 59 percent of civil aircraft and so forth.
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Yet a few months ago, we held a hearing here about the decline in the number of general aviation airports. That was a pretty dramatic decrease. Then you mentioned that last year, $88 million had to be taken from the airport improvement program for administrative costs. By the way, of course, we're talking about an airport improvement program that's been less than $2 billion a year for the whole country.
What were those figures on the number of general aviation airports?
Mr. BOYER. We're losing about one general aviation airport every week in this country on average. Some years it's been up to about one and a half. Generally, those airport losses, as you well know, come from the privately owned public use airports. In other words, airports that are not federally funded but have been owned by a family for many years, let's say, they were out in the suburbs in a very rural area and then urban sprawl kind of got in there and made the land value much higher, and it was no longer economical to keep it as an airport, or just aging owners.
But these are airports that do relieve in many cases the large air carrier airports that we have been talking about.
Mr. DUNCAN. Well, thank you very much. I have to tell the mayors that from, my father was the city bond director in Knoxville for three and a half years and then mayor for six years. In fact, he was the first mayor in the history of Knoxville to be re-elected. They were tough on mayors—still are.
From the time I was 8 until I was 17, I sort of grew up in city hall. I remember that everybody and his brother wanted a job as a fireman or a policeman, and the day after they got those jobs they wanted a promotion or a raise or both. There was no civil service system at that time.
I became convinced that the toughest job in the world is to be the mayor of a large city. So I certainly have great admiration and respect for the jobs that both of you have. I know they're very difficult jobs.
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Mayor SAVAGE. Thank you, Mr. Duncan. I know I speak on behalf of all mayors, the fact that you would invite city government leaders here to speak to you about this issue is very significant to us. We're very appreciative. Because we are there, listening to the traveling public and dealing with the business people. So we appreciate your interest.
Mr. DUNCAN. Thank you. The people from Knoxville spend a lot of money in Atlanta. Also, I went to Vanderbilt, so we're pulling for them.
Mayor CAMPBELL. The Commodores will go a long way in the NCAA tournament. We'll have a great time.
By the way, we're hosting the final four in basketball, final four in the year 2002 and the women's final four in 2003. So we hope you get a better airfare and can bring your son down.
Mayor SAVAGE. Mr. Duncan, the Tulsa Ballet has performed——
[Laughter.]
Mayor SAVAGE. I would like to get a link here.
Mr. DUNCAN. Well, I have to tell you that I like basketball a little better than the ballet.
[Laughter.]
Mr. DUNCAN. Thank you both very much.
[Whereupon, at 11:26 a.m., the subcommittee was adjourned, to reconvene at the call of the Chair.]
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