A new Competitive Enterprise Institute report argues that airport authorities nationwide should be empowered to make their own decisions about how best to finance infrastructure improvements. In order to make that happen, Congress must eliminate the cap on a user fee known as the passenger facility charge.
“Airports across America face growing infrastructure needs as passenger volumes continue to rise, threatening their ability to meet travelers’ service expectations in the years ahead,” said Marc Scribner, CEI senior fellow and author of Modernizing the Passenger Facility Charge to Increase Airport Investment, Reduce Federal Spending, and Save Travelers Money.
“The biggest barrier to airport infrastructure funding is Congress. It’s time for Congress to eliminate the cap on the airport passenger facility charge in order to increase airport investment, promote greater airport productive efficiency and local self-help, and reduce federal spending by hundreds of millions of dollars per year. Fortunately, legislation has been recently introduced to make these reforms.”
The report explains why the passenger facility charge (PFC) has some significant advantages over alternative revenue sources:
Autonomy – Local airports should be empowered to determine what user fees they need to improve and maintain their facilities and best serve their customers.
Fairness – Unlike general taxes, user fees are paid by the travelers who actually use the airports that receive those fees.
Competition – Consumers deserve a competitive airline market. The passenger facility charge is one effective way airports can expand gate capacity and bring in new, lower cost airlines. In this way, the PFC can promote airport efficiency and airline competition, leading to lower fares—a win for consumers.
Revenue – Airports need a more reliable source of funding for the future, as parking and rental car fee revenue face increasing risks due to the growing popularity of ride-hailing services like Uber and Lyft.
Flexibility – PFC funds are set up to be a more versatile alternative to taxpayer-supported federal airport grants.
Currently, Reps. Thomas Massie (R-Ky.) and Earl Blumenauer (D-Ore.) have proposed a bill to eliminate the user fee cap, the Investing in America: Rebuilding America’s Airport Infrastructure Act (H.R. 3791).