Airports

Progressives and Libertarians Team Up to Deregulate Airports

Reps. Earl Blumenauer and Thomas Massie have introduced a bill that would cut federal airport spending while giving airports more freedom to raise their money.

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This week, libertarian-leaning Rep. Thomas Massie (R–Ky.) and progressive Rep. Earl Blumenauer (D–Oregon) introduced a bill that would cut federal spending on airports in exchange for letting those airports raise the fees they charge passengers.

These fees, known as Passenger Facility Charges (PFCs), can be used to finance the expansion of passenger terminals, something the federal government's main airport grant program doesn't pay for. Allowing airports to raise more money for terminal expansion, the thinking goes, will let more airlines offer more flights, raising service levels and lowering ticket prices.

Since 2000, the maximum PFC an airport can charge has been capped at $4.50 per boarding, the purchasing power of which has been whittled away by inflation. The Airports Council International–North America, a trade group, estimated in 2017 that the country's airports will need $100 billion in infrastructure improvements over a five-year period.

Massie and Blumenauer's bill would help airports fund those improvements by lifting the PFC cap.

Large airports that raise their fees above $4.50 would have to return all funding they get from the feds' Airport Improvement Program (AIP). The bill would also cut funding for AIP grants, currently a $3.3 billion program, by $400 million a year.

"Simply put, we want to deregulate the airports," says Massie, telling Reason that getting rid of the PFC cap is a way to fund infrastructure "without raising taxes and not having the federal government make local decisions."

The bill's biggest opponent is the airline industry, which argues that airports have plenty of money and that higher PFCs will mean higher ticket prices.

In a May blog post, Airlines for America argued that removing the cap on PFCs would raise prices for travelers, causing a depressing ripple effect throughout the economy. Airports, the industry association argues, have some $14.5 billion in cash reserves that they can spend on infrastructure without raising PFCs.

That latter point is misleading, replies Bob Poole, director of transportation policy at the Reason Foundation (which publishes this website).

"Prudent management says [airports] have to have reserves," Poole says. That ensures "they can pay their debt service in a recession when there's less air service and they're not making as much on parking charges and rental car fees."

Far from raising ticket costs, uncapping PFCs would likely be a net win for passengers' budgets. The revenue from PFCs have "opened up a number of airports to be able to do large-scale expansion of terminals," Poole notes. "The ultra-low-cost carriers like Allegiant and Spirit and Frontier have been able to get increasing amounts of gate space."

Big airlines oppose removing caps on PFCs, Poole argues, precisely because it would bring in more revenue that airports could then spend on adding gate space for their competitors.

Massie had introduced an identical PFC cap bill in 2017 with Rep. Peter DeFazio (D–Oregon), but that effort proved unsuccessful. With DeFazio now chairman of the House Transportation Committee, Massie thinks his bill stands a much better chance of success.

A handful of conservative groups have opposed lifting the cap on PFCs, including Grover Norquist's Americans for Tax Reform and the National Taxpayers Union, claiming that it is effectively an tax increase.

Massie argues that PFCs are basically the platonic ideal of a user fee, saying "the money does not go to the government. It goes directly to the airports."

"Airports are in need of investment. The president has talked about trying to get $1 trillion for infrastructure investment," says Massie. "This is the single easiest way to get that money."

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35 responses to “Progressives and Libertarians Team Up to Deregulate Airports

  1. Can’t we have free airports in the same way we have free colleges? Isn’t that what freedom is? Where everything in free and paid for by taxes and the icky rich?

    1. I’d like to donate to your political campaign, sir. Well, not me personally, but rich folks should donate to your political campaign. I’ll do my part by using Facebook and Twitter to blast any opposition to your campaign as being heartless Nazis.

    2. You want freedom? Instant election for you just by promising free parking at airports.

  2. Get the government out of the way, let industry set the prices, and keep the federal government out of the business of building/expanding airports.

    If a municipality or private concern wants to build an airport, let them. The federal government has no business being involved without good reason (“there’s a rule” is not a good reason).

    1. Municipal governments have no business in that space either. Just saying.

      1. Rephrase – if a municipality wants to build a muni airport, the feds shouldn’t be involved. I’m not weighing in or whether/not a municipality should be involved is such a thing.

    2. I agree. The article doesn’t bother to explain how a free market airport might operate, I suppose because the market would figure out the best way and it would be speculation. But I would expect such an airport would charge airlines and private plans a fixed fee for takeoffs and landings (maybe with congestion pricing) plus a charge for each passenger going through it, charged to the plane’s owner, with the ratio of the fees proportional to the cost of providing takeoff/landings, vs. the cost of the facilities to handle passengers.

  3. And since we’re discussing airports, Cory Booker shifts in the breeze so much that he should be painted orange and stuck at the end of a runway.

    1. Worth adding to the analogy: He’s definitely a sock full of wind. (Yes, I realize I’m being merciful)

  4. Progressives and Libertarians Team Up

    Somehow, I have a feeling this won’t be the last time I see that phrase.

    1. Libertarians team up with progressives to cut taxes and spending? I knew those Reasonoids were all filthy libruhls! How can we make Mexico pay for a wall without taxes on airports?!? Damned traitors, send them back!

      1. You couldnt even read 2 paragraphs huh? What do you think a PFC is?

        1. Private, 1st Class?

      2. If Progressives support something, Libertarians must therefore oppose it. It is what Free Thinking demands.

        1. So you think taxes/fees magically stop being taxes if not at the federal level?

          Airplanes generally fly across state boundaries. It is actual interstate commerce. It is one of the actual areas it makes sense to have uniform regulations.

        2. Seeing as progressivism is the antithesis of libertarianism, yeah.

      3. When your “core value” is Open Borders, it’s all about partnering with all the other Globalists, like Progressives, Marxists, and Neocons.
        Nick:
        In the 21st century, libertarians are going to have make common cause with the globalists of all parties, with the people whose core value is the right of individuals to move freely around the planet.
        https://reason.com/2019/04/12/steve-bannons-economic-nationalism-is-th/

        Shikha is a self-proclaimed “progressive libertarian”. When will the rest of Reason’s staff come out as Progressitarians?

    2. I thought the very same thing when I saw the title. Couple that with the slew of anti conservative articles this week and I think we see the new direction for Reason.

  5. This week, libertarian-leaning Rep. Thomas Massie (R–Ky.) and progressive Rep. Earl Blumenauer (D–Oregon)
    I don’t think Massie leans far enough to justify the headline.

    1. Can’t very well call him a Republican or a Conservative, now, can we? That craps all over The Narrative

    2. Frankly, I thought Blumenauer doesn’t qualify as a progressive since he’s essentially supporting a reduction in government’s role in the businesses involved. Massie on the other hand IS “libertarian-leaning” far more than 85% of the GOP in Congress or any of the Democrats.

  6. The Rev’s and OBL’s Left-Libertarian Alliance has come to fruition and borne fruit. One of the greatest pairings of sophisticate thinkers since ancient Greece.

  7. “The bill would also cut funding for AIP grants, currently a $3.3 billion program, by $400 million a year.”

    Just tweaking regulations by a measly 400 million does not count a deregulation.
    Eliminate the entire AIP program, and you have a tiny start . . .

  8. “A handful of conservative groups have opposed lifting the cap on PFCs, including Grover Norquist’s Americans for Tax Reform and the National Taxpayers Union, claiming that it is effectively an tax increase.”

    While I sometimes appreciate the work of both the above-named organizations, how do they manage to confuse “taxes” with user-fees?

  9. A Government mandated fee is a tax of another kind. It was pretty clear when Bush cut taxes along with moving federal costs into state hands to provide for the cuts only was transferred to state costs. Fees and taxes rose from the states and cost of living rose across the US. The fact that average American saw no change in his income or pocket proved to the libs tax cuts did not work.

    The PFC’s raise 4,275,000,000 or close to 4.3 billion is raised for expansion of airports. That’s a lot of money well maybe not to a government worker, but what is this providing and how much is taken by the service fee itself. This is government charged. Why that is important is that is outside the competitor scale and everyone has to pay it. So it’s a fee. This is above the rent already charged to airlines for the spaces they use. This is a government program We pay airlines, Airlines pay airports and above this is a fee to the airport for expansion. What happened to the rent for expansion that any other rental or service business would be profit out of.

    So somehow we have to be clapping seals for a proposal that frees the cap on the cost for a mere 400 million which probably should not be spent by the Federal government anyway.

  10. “If Bob Poole is fer’ it I’m agin’ it” is always the most pro-liberty stance. Social conservative Rep Thomas Massie is pretty much the most libertarian congressman but he’s wrong here.

  11. If we want to curb global heating and keep civilization alive,
    encouraging more flights is a step backward.

    1. “If we want to curb global heating and keep civilization alive,
      encouraging more flights is a step backward.”

      If we want to keep civilization alive, we’d get rid of fools like you.

  12. “A handful of conservative groups have opposed lifting the cap on PFCs, including Grover Norquist’s Americans for Tax Reform and the National Taxpayers Union, claiming that it is effectively an tax increase.”
    If it is a tax it is easy enough to avoid. Just don’t fly. Same with the gas tax to fix road. If you don’t like it just walk places. The rest of us living in the 21 century can get on with living and we won’t have these people sitting next to us in the middle seat or ahead of us in heavy traffic.

  13. Reason must have a reason for referring to antichoice republicans as “libertarian-leaning” whenever mimesis in action shows its spots. One could as easily cherrypick the George Wallace ‘Murrican Independent platform for a few libertarian-sounding phrases, but what’s the point? Since the LP wrote Roe v Wade, God’s Own Populists have used prohibition to jail blacks and hippies mainly by absorbing the George Wallace “message” and repackaging it into the Nixon campaign, with George conveniently installed in a wheelchair.

  14. “Big airlines oppose removing caps on PFCs, Poole argues, precisely because it would bring in more revenue that airports could then spend on adding gate space for their competitors.”

    If legacy airlines didn’t have control over the number of gates they do, it’s doubtful they’d still be in business.

  15. I am getting a sense that there is a new editorial “push” at Reason for a rapprochement with the progressive left. First the story about Soros and Koch working for peace together. Then two articles critical of the Nationalist Conservatism movement, and now this article headline that implies Progressives and Libertarians can work togther, when the more accurate headline is “bipartisan bill to deregulate airports proposed ” .

    1. Nothing matters but Invasion USA and the rule of the international Deep State. If that’s what you’re for, Reason is for you.

      Nick:
      In the 21st century, libertarians are going to have make common cause with the globalists of all parties, with the people whose core value is the right of individuals to move freely around the planet.
      https://reason.com/2019/04/12/steve-bannons-economic-nationalism-is-th/

  16. ah ! very funny !
    can you look up the statistic of Airports closed the last few years?
    NOT IN MY BACKYARD crew ?
    without the Feds = no airports.

  17. Awesome article.
    Why do not you write more.
    https://azproquotes.com

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