in an airport in a particular state for a plane that has been delayed on its previous leg due to congestion at an airport in another state. A delay resulting from congestion at one node in the air transportation system often results in further delays for connecting passengers throughout the entire system. Thus, spending increases at airports that are proverbially riddled with time delays confer spillover benefits on individuals in other states who travel through the airport in question. These benefits are in the form of travel time savings. This could make it socially optimal for an individual state to increase its airport spending when other states spend more on airports. Moreover, these benefits are reciprocal in nature as described by Oates (1972). It will be important to incorporate this potential interdependency into an empirical framework that examines asymmetric state and local airport expenditure responses to changes in AIP grants. Federal funding key – states fail, oversight Bennett 99 (Grant D., “ Funding Airport Infrastructure: Federal Options for Solvency”, Journal of Engineering and Public Policy, August 5 th , 1999, - intern.org/journal/1999/index.html)//IIN The FAA, through the Airport Improvement Program (AIP), addresses infrastructure needs. The AIP was established to promote and enhance safety, security, capacity, noise mitigation and environmental concerns, and to promote the use of existing infrastructure (i.e., using former military airports for civilian use).22 In general, the AIP receives money from the Aviation Trust Fund to address infrastructure and development needs and concerns at airports. Although the AIP is tasked to support airport infrastructure, the demand for further funding is not met by these federal dollars and the burden is falling on state and regional authorities. The overall capital development by airports in 1998 is shown in the chart below.23 Funding Sources for Capital Development Airport Revenue 2% Tax Exempt Bonds 58% Regional Gov't 4% Passenger Facility Charges 16% AIP Grants 20% The tax-exempt bonds are issued at the regional level, leaving AIP grants as the sole source for federal funding. Even for AIP projects, the nonfederal share of funding is 10% for smaller airports and 25% for large and medium hub airports. 24 Passenger Facility Charges Although the federal government does not fund a majority of infrastructure, the AIP grants and Passenger Facility Charges (PFC’s) combined cover over one-third of the development money, and could be increased to cover a larger share.
- Fall '13
- Sula, United States., Airport Improvement Program