By Tom McClimon and Ron Thaniel
October 13, 2008

Mayors from across the country met in Palm Beach October 2-3 to develop an arts and tourism platform for the next President of the United States. The meeting was the fifth, and last, of five 2008 Mayors’ Action Forums, which Conference President Miami Mayor Manny Diaz has convened over the past few months.

In opening the forum, Diaz stressed the importance that the arts and tourism play in local economies. “The arts generate over $166 billion in economic activity every year and support over 5.7 million jobs. The travel and tourism industry is America’s leading service sector export. We must make sure that the next President has policies that support these areas,” he said.

Honolulu Mayor Mufi Hannemann, Chair of the Conference’s Standing Committee on Tourism, Arts, Parks, Entertainment and Sports offered his perspective. “Mayors understand the importance of the arts and tourism to our communities. As such, we are in a good position to offer recommendations to the next President to strengthen these programs”.

Robert Lynch, President and CEO of Americans for the Arts, which sponsored the forum, provided testimony on key arts issues and offered recommendations for addressing them. “Mayors ‘get it’ when it comes to the arts. Without the mayors and the Conference of Mayors there would be no National Endowment fort the Arts today,” he said. Lynch recommended five areas where the arts could be strengthened, much of which followed adopted Conference of Mayors policies. They included the creation of a cabinet level Secretary for Culture and Tourism; full funding of the National Endowments for the Arts and Humanities; the expansion of arts education programs in schools; and the redirection of federal arts funding directly to local arts agencies and the inclusion of arts as a component of federal economic and community development programs. The mayors also proposed that the next President hold a White House Conference on the Arts to expand the dialogue of the importance of the arts. The next President must also include in his federal budget federal funding for local parks programs.

House Conference on the Arts to expand the dialogue of the importance of the arts. The next President must also include in his federal budget federal funding for local parks programs.

Jonathan Tisch, President and CEO of Lowes Hotels and Chairman of the Travel Business Roundtable, began by thanking the mayors for their support of the Travel Promotion Act, which was passed by the House of Representatives but not the Senate. “Your support enabled us to get this legislation through the House and it lays the groundwork for Senate action in the next Congress.” The Travel Promotion Act creates a public-private partnership to better communicate U.S. travel security policies to overseas travelers and promote the U.S. as a travel destination abroad.

“Mayors need to be at the table when travel and tourism issues are being discussed by the new President,” stated Tisch. He recommended, and the mayors accepted, some specific actions that the next President and Congress can take on travel and tourism. He encouraged the next President and Congress to expand the Visa Waiver Program to qualified countries in Latin and South America and Asia. He also recommended full implementation of programs such as the Transportation Security Administration’s Black Diamond and expansion of the model airports program to allow for easier entry for approved foreigners to enter the United States. The mayors also urged the next President and Congress to increase staffing for Customs and Borders Services and TSA personnel and to implement customer service training for them. TSA was also encouraged to use the most up-to-date passenger friendly technology. The new Administration must also fully support Chicago’s bid for the 2016 Olympic and Paralympics Games.

Jane Garvey, Executive Director with The U.S. Public/Private Partnership at JPMorgan and former Federal Aviation Administration (FAA) Administrator, and Sharon Pinkerton, Vice President for Government Affairs with the Air Transport Association (ATA), joined the mayors to examine the volatility in the U.S. airline industry exacerbated by high jet fuel prices. At about $110.00 a barrel, the airlines break even, anything above eats into their bottom-line,” Garvey said.

“Since the end of 2007, ten U.S. airlines have ceased all operations, and Frontier and Sun Country are operating under bankruptcy protection,” said Pinkerton. According to ATA, each fifty-cent increase in price of jet fuel adds $10 billion to the airline industry’s expenses. The cost of fuel per passenger-mile rose from 2.01 cents in 2000 to an estimated 6.80 cents in the 2nd Quarter of 2008. As a result, U.S. airlines are projected to spend between $50 and $60 billion on fuel this year, versus $41.6 billion in 2007. As a result, “U.S. airlines have announced the reduction of 35k-40k jobs and the retirement of approximately 750 aircraft,” said Pinkerton. “Over 300 markets are receiving less service,” said Garvey. By the end of 2008, dozens of U.S. airports will have lost all of at least one airline’s scheduled service - impacting economic growth in the nation’s metropolitan areas.

While the dependence on oil, and in turn high jet fuel prices, have exacerbated the troubles of the industry, longer term issues such as an aging fleet, a 1950s navigational system, insufficient R&D in alternative fuels and engines that consume less fuel, and the elimination of routes are also factors contributing to an industry in crisis.

Regarding growing discussion in Washington concerning reregulating the U.S. airline industry, Garvey warned that any discussion should be well thought-out and not just a reaction. With mixed results, in 1978, Congress passed the Airline Deregulation Act on the premise that eliminating Federal controls over pricing and routes would increase market competition, leading to lower airfares and improved service.

A numbers of mayors noted that once regarded for their excellent service, U.S. airlines are increasingly associated with poor service, stranded passengers, lost baggage, fewer routes, and long delays/congestion in the air, runways, and in terminals.

Meridian (MS) Mayor John Robert Smith, Vice Chair for Rail Policy for the Conference’s Transportation and Communications Committee, called for a shift in FAA policy, one that moves from a single mode to an intermodal approach – an approach whereby short-range flights are replaced by rail.

Smith urged the mayors to embrace this vision for an integrated air-rail approach “…as a new vision for America’s transportation future.”

A strong complimentary rail service is critical and very important to addressing aviation delays and congestion, said Garvey.

“Increased flexibility and streamlined planning processes to encourage a more systemwide intermodal approach to transportation planning and development is needed to achieve the long-term goal of a more integrated air and rail system,” said Smith.

Following these presentations, there were discussions on the Mayors’ Agenda, focusing on the need for a national vision to modernize America’s aviation system. A recurring theme of the mayoral discussion was the need to include aviation modernization as part of a national infrastructure plan, starting with the pending reauthorization of the FAA and the surface transportation successor legislation to SAFETEA-LU.

Among the discussions, as mentioned previously, was a repeated call for a national integrated air-rail policy. Also, a number of mayors urged the next President and Congress to fully fund a new air traffic control system to convert the nation’s radar-based aviation tracking system to a satellite based one. European and Australian aviation tracking is already satellite based. In the meeting, Sharon Pinkerton described the radar-based system in terms of 1950s technology.

Many mayors also called for an increase in Passenger Facility Charges (PFC) to $7.50 and to index this increase to inflation and to authorize at least $3.8 billion for the Airport Improvement Program (AIP), with an increase of $100 million each year thereafter, which would provide resources for construction of runways, taxiways, terminals, gates, and land acquisition. The FAA forecasts that the number of U.S. air travelers will grow by at least 2.7 percent per year through 2025, from more than 689 million passenger today to more than 1.1 billion in 2025.

Recognizing the industries dependence on oil, many mayors called on the new President, Congress, and airline industry to provide resources to finance research and development of alternative fuels and engines that consume less fuel and reduces the industries carbon emissions per passenger mile.

Of key concern to many mayors, they urged the industry to preserve existing routes and flights and asked the new President and Congress to intervene to inoculate metro areas from financial woes of the airline industry.