The U.S. Conference of Mayors


WHEREAS, the Federal Aviation Administration (FAA) has identified at least seven metropolitan areas and 18 hub airports that need additional air capacity improvements to meet anticipated demand by 2015, and 15 metropolitan areas and 27 hub airports by 2025; and

WHEREAS, the U.S. Congress in 1990, in order to meet the growing demand for airport capacity, authorized commercial service airport sponsors to impose a user fee of up to $3 per flight of each paying passenger, called a "Passenger Facility Charge" (PFC); and

WHEREAS, PFC revenue has served as a major source of funding for the construction of runways, taxiways, terminals and gates, as well as for debt service, and the Secretary of Transportation has praised the PFC program as "very successful at providing a stable source of revenue to fund capital development projects"; and

WHEREAS, by using PFCs to fund major airside and landside capacity improvements, airports have kept these costs out of the rates and charges airport impose on airlines; and

WHEREAS, in 2000, the Congress increased the maximum PFC to $4.50, but the rise in construction costs and inflation have eroded the value of PFCs, so that a $4.50 PFC in 2000 is now worth only $2.86; and

WHEREAS, the Congress will consider whether to increase the PFC cap in legislation to reauthorize Federal Aviation Administration programs that are set to expire at the end of this fiscal year, and

WHEREAS, the Administration's FAA reauthorization proposal recognizes the importance of the PFC program to our national air transportation system and the need to increase the PFC to meet the growing airport capacity needs; and

WHEREAS, in proposing an increase in the PFC cap to $6.00, the Administration's proposal did not take into account the rise in construction costs or the effect of inflation; and

WHEREAS, an increase to $7.20 is needed simply to restore the buying power of the PFC increase enacted in 2000; and

WHEREAS, under the Administration's proposal, large and medium hub airports would no longer be eligible for apportionment funding under the Airport Improvement Program (AIP), because the Administration believes these airports can obtain adequate funding through the imposition of PFCs; and

WHEREAS, large and medium hub airports are willing to forego future AIP apportionment funding so long as the PFC cap is increased to $7.50, which would offset the expected impact of inflation and the further increase in construction costs over the next several years; and

WHEREAS, enacting a $7.50 PFC cap while removing large and medium hub airports from AIP apportionment eligibility would benefit all airports in the national air transportation system, because the larger airports would rely even more heavily on PFC funding, while smaller airports would benefit by receiving a greater portion of AIP funds than under current law; and

WHEREAS, the National League of Cities, the National Association of Counties, the National Association of State Aviation Officials, the Airports Council International-North America, the American Association of Airport Executives, the Associated General Contractors, the American Road and Transportation Builders Association, and the American Association of Civil Engineers have endorsed an increase in the PFC cap; and

WHEREAS, it also is important to reauthorize the Airport Improvement Program at a level that will meet the needs of both large and small airports; and

WHEREAS, to account for the rise in construction costs and the impact of inflation, AIP funding should be increased over the current authorized level of $3.7 billion;

NOW THEREFORE BE IT RESOLVED that The U.S. Conference of Mayors calls upon the Congress to enact in FAA reauthorization legislation an increase in the PFC cap and an increase in the authorized level of AIP funding to meet the rise in construction costs, the impact of inflation, and the demand for airport capacity growth; and

BE IT FURTHER RESOLVED that The U.S. Conference of Mayors urges the Congress to raise the maximum PFC cap to $7.50 per flight, to index this increase to inflation, and to authorize at least $3.8 billion in AIP funding, with an increase of $100 million each year thereafter.

2007 The U.S. Conference of Mayors
Tom Cochran, Executive Director
1620 Eye Street, NW, Washington, DC 20006
Tel. 202.293.7330 ~ Fax 202.293.2352