AAAE: Trump Administration Releases FY 2019 Budget Proposal

12-Feb-2018 The Trump Administration today unveiled its FY 2019 budget proposal that seeks to cut discretionary funding across most of the federal government. Of concern to airports, the proposal seeks to eliminate the TSA law enforcement officer reimbursement program, undo the federal mandate that TSA staff airport exit lanes and reduce funding for the Essential Air Service program. And, despite continued efforts by the airport community to press for infrastructure investment self-help by eliminating the federal PFC cap, the budget misses an opportunity to make any PFC-related adjustment.

The release of today's budget proposal marks the beginning of the FY 2019 appropriations process. Congress - which must first complete the FY 2018 process before a March 23 deadline - will ultimately write the annual 2019 funding bills in the months ahead. Lawmakers are likely to quickly ignore the budget request, although we must remain vigilant in communicating concerns and priorities to Capitol Hill.

For the second year in a row, the Trump budget request also calls for corporatization of the air traffic control system, a controversial proposal pushed by House Transportation Committee Chairman Bill Shuster (R-PA) that has drawn strong opposition from Democrats and key Republicans on Capitol Hill.

Overall, the budget outline proposes to cut a total of $3 trillion in spending over the next ten years and reflects increased FY 2019 spending caps that were approved by Congress last week as part of a stopgap spending bill. The budget request includes a number of cuts to entitlements like Medicare, Medicaid, food stamps, and other social programs that are likely to face resistance on Capitol Hill.

Separately, the White House today provided some additional details on the administration's push to streamline the projects permitting process and a request for $200 billion in direct federal infrastructure funding designed to leverage at least $1.5 trillion in spending through public-private partnerships and other incentives. Our Airport Alert includes more information on the administration's infrastructure proposal.

The following is a summary of key proposals included in the FY 2019 budget request from the Trump Administration.

Department of Transportation/Federal Aviation Administration

Federal Aviation Administration: The budget includes just over $16.1 billion for the FAA in FY 2019. That funding level is down from the approximately $16.4 billion that Congress approved for the agency in FY 2017 and $16.9 billion that the Senate approved for the agency in its version of FY 2018 DOT spending bill.

Airport Improvement Program: The administration is proposing $3.35 billion for AIP in FY 2019 - the same as the current funding level but $250 million less than the $3.6 billion included in the Senate version of the FY 2018 DOT spending bill. Of the $3.35 billion included in the administration's FY 2019 request, approximately $112.6 million would be dedicated toward administrative expenses.

The White House plan would also provide approximately $33.2 million Airport Technology Research, maintain $15 million for the Airport Cooperative Research Program, and eliminate funding for the Small Community Air Service Development Program. Funding for the first two programs would continue to come from the AIP account.

Passenger Facility Charges: The administration's budget request does not endorse airport calls to eliminate the federal cap on local Passenger Facility Charges. AAAE, ACI-NA, the U.S. Travel Association, and airports around the country are continuing to urge Congress to eliminate the PFC cap as part of the FAA reauthorization bill. The Senate version of the FY 2018 DOT appropriations bill proposes to raise the PFC cap from $4.50 to $8.50 for originating passengers.

Operations: The White House budget plan includes $9.931 billion for FAA operations. This is approximately $255 million less than the $10.186 billion that the Senate included it its version the FY 2018 DOT appropriations bill, but $94 million below the FY 2017 enacted level.

Facilities and Equipment: The administration's FY 2018 budget request includes approximately $2.767 billion for FAA's Facilities and Equipment Account - $238 million less than the $3.005 billion that the Senate included in its version of the FY 2018 DOT appropriations bill.

Research, Engineering, and Development: The President is requesting $74.4 million for the FAA's Research, Engineering, and Development account in FY 2019 - $102 million below the FY 2017 enacted level. The Senate version of the FY 2018 DOT spending bill includes $179 million for R,E,&D.

Essential Air Service: The administration is proposing to "reform" the Essential Air Service program, in part, by reducing appropriated funds for the program to $93 million in FY 2019. That amount is $62 million less than the $155 million in appropriations that the Senate proposed for EAS in its FY 2018 DOT spending bill and $57 million less than the $150 million that Congress appropriated for the program in in FY 2017.

Last year, the White House proposed to eliminate discretionary spending for EAS but retain mandatory funding derived from overflight fees, which is expected to generate $140 million next year. Combined, the total funding for EAS could total approximately $233 million in FY 2019.

Budget documents suggest that the White House plan would focus on "remote airports that are most in need of subsidized commercial air service." They also suggest that the proposal would "include a mix of reforms, including limits on per-passenger subsidies and higher average daily enplanements."

Specifically, the administration is proposing to "limit EAS eligibility to communities located more than 50 driving miles from a small hub, 75 miles from a medium hub, and 100 miles from a large hub." It would also "place limits on the waiver authority for the 10-enplanement requirement." But the administration's plan would also "increase the subsidy cap from $200 to $250 per passenger for communities located within 210 miles from the nearest large or medium hub airport."

Contract Tower Program: The administration's budget does not include a specific dollar amount for the popular and cost-effective Contract Tower Program. Airports point out that contract towers handle approximately 28 percent of all U.S. tower operations, but they account for just 14 percent of FAA's overall budget allotted to air traffic control tower operations. Additionally, the Contract Tower Program saves FAA and taxpayers approximately $200 million annually.

Small Community Air Service Development Program: The administration is not requesting any funding for the Small Community Air Service Development Program. The Senate version of the FY 2019 DOT spending bill includes $10 million for the program with funding coming from the AIP account. This is the same amount that Congress approved for the program in FY 2018.

ATC Reform: The administration again reiterated its support for a controversial proposal to corporatize the Air Traffic Control system. Budget documents indicate the FY 2019 request "includes a multi-year reauthorization proposal to shift the air traffic control function of the Federal Aviation Administration to a non-gov¬ernmental, independent air traffic services cooperative, making the system more efficient and innovative while maintaining safety."

Department of Homeland Security

DHS Funding Level: The FY 2019 president's budget requests a total of $47.5 billion in funding for the Department of Homeland Security and focuses largely on border security, immigration enforcement and cybersecurity.

Transportation Security Administration

The budget request for FY 2019 proposes $7.7 billion for the TSA, an increase over the FY 2018 president's budget but slightly below the enacted FY 2017 budget. Within this total funding, the administration proposes to:

• Increase Transportation Security Officer FTEs to a total of 43,877, the highest level in the agency's history. TSA will increase its TSA officer workforce by 382 FTE to annualize the FY2018 passenger growth and 335 FTE for the expected FY2019 passenger growth.

• Include a $70.6 million increase over FY 2018 to begin the purchase and deployment of Computed Tomography (CT) technology to airports. The funding provides for the purchase of 145 CT units for deployment at 14 of the nation's highest-risk airports and an increase of $2.4 million for an additional 19 FTE Transportation Security Specialists-Explosives to help respond to increased alarm rates expected with the new technology. The budget documents refer to CT as the most impactful technology available today that will allow TSA to automate much of the threat detection function in carry-on baggage to meet current threats and overall checkpoint security effectiveness. It also references plans to deploy additional CT units per checkpoint across an additional 25 high-risk domestic airports after TSA deploys CT technology to the initial 14 high-risk airports.

• Provide $15.6 million for the TSA's Innovation Task Force to support equipment testing and demonstration, algorithm testing and demonstration, hardware and software testing, and program management.

• Eliminate the Visible Intermodal Prevention and Response (VIPR) Team program, saving $12.6 million for the agency. The administration states that state and local law enforcement agencies will continue the primary activities where VIPR teams were previously deployed.

• Reduce the Federal Air Marshal Service (FAMS) payroll by 3 percent ($26.1 million) which will be absorbed through managed attrition and a hiring freeze. FAMS will continue to schedule missions using a risk-based security approach designed to mitigate the maximum risk to the aviation system.

• Eliminate the TSA's Airport Infrastructure Protection Program, which provided funds for airports to enter into Other Transactional Agreements (OTAs) for Closed Circuit Televisions (CCTVs). The FY 2018 president's budget included a reduction of $4 million to this program. The FY 2019 request eliminates the remaining funds provided to enter into OTAs for CCTVs at airports. Airports currently have CCTVs in place separate from the CCTVs TSA funded.

Law Enforcement Officer Reimbursement Program: The FY 2019 budget continues the reductions taken in the FY 2018 president's budget request, including the elimination of the law enforcement officer reimbursement program. In addition, for FY 2019, the administration proposes to eliminate the remaining personnel and support cost in the program management office. According to the administration's budget justification documents, the elimination of this program does not exempt airports from providing law enforcement services as agreed to in the Airport Security Program. It further states that the elimination will have no impact on performance as airports will continue to provide the required law enforcement services.

For FY 2018, the Senate Appropriations Committee included $45 million in funding for the program and directed TSA to maintain the program. Unfortunately, the House-passed DHS appropriations bill for FY 2018 adopted the administration's request and did not include funding for the LEO program. Members of Congress are deciding the fate of the program now as they finalize details of the FY 2018 spending bills. We urge you to once again contact your elected contact your elected officials to let them know what the elimination of this program will do to security and law enforcement officer activity at your airport.

Exit Lane Staffing: Again, the FY 2019 budget continues the reductions proposed in the FY 2018 president's budget to cease TSA staffing of airport exit lanes. Given the statutory language contained in the Bipartisan Budget Agreement of 2013 that requires TSA to be responsible for monitoring passenger exit points from sterile areas of airports which TSA was monitoring as of December 1, 2013, neither the House nor the Senate included a reduction of exit lane funding in their FY 2018 funding bills.

Passenger Security Fees: To move toward a higher share of cost recovery for aviation security, the Budget proposes to increase the Passenger Security Fee by one dollar in FY 2019 from $5.60 to $6.60 per one-way trip and an additional $1.65 starting in FY 2020, from $6.60 to $8.25 per one-way trip.

U.S. Customs and Border Protection

The budget request for FY 2019 proposes $14.4 billion in discretionary funding for CBP, which includes $1.6 billion for the construction of approximately 65 miles of a border wall system.

User Fees: The FY 2019 budget proposal includes an increase to COBRA fees created under the Trade Act of 2002. COBRA created a series of user fees for air and sea passengers, commercial trucks, railroad cars, private aircraft and vessels, commercial vessels, dutiable mail packages, broker permits, barges and bulk carriers from Canada and Mexico, cruise vessel passengers, and ferry vessel passengers. This proposal would increase the customs inspection fee by $2.10 for certain air and sea passengers and increase other COBRA fees by proportional amounts. The additional revenue raised from increasing the user fees will allow CBP to recover more costs associated with customs related inspections, and reduce waiting times by helping to support the hiring of 840 new CBP Officers. This fee was last adjusted in April 2007, yet international travel volumes have grown since that time and CBP costs for customs inspections continue to increase.

The budget also proposes to increase the Immigration Inspection User Fee (IUF) by $2 and eliminate a partial fee exemption for sea passengers arriving from the United States, Canada, Mexico, or adjacent islands. These two adjustments will result in a total fee of $9 for all passengers, regardless of mode of transportation or point of departure. This fee is paid by passengers and is used to recover some of the costs related to determining the admissibility of passengers entering the U.S. Specifically, the fees collected support immigration inspections, the maintenance and updating of systems to track criminal and illegal aliens in areas with high apprehensions, asylum hearings, and the repair and maintenance of equipment. CBP estimates raising the fee and lifting the exemption could offset the cost of an estimated 1,230 CBP Officers.

The administration has proposed similar fee increases before and congressional authorizers have been unwilling to raise these fees in the past.

Brand USA Elimination: The administration proposes to eliminate funding for the Corporation for Travel Promotion (also known as Brand USA) as part of the administration's plans to move towards greater fiscal responsibility and to redefine the proper role of the federal government. The budget redirects the Electronic System for Travel Authorization (ESTA) surcharge currently deposited in the Travel Promotion Fund to the ESTA account at Customs and Border Protection with a portion to be transferred to the International Trade Administration.

CBP Staffing: The FY 2019 budget request includes $164.3 million for 750 additional border patrol agents and necessary support personnel. The budget also includes increased funding for frontline hiring improvements to improve CBP's ability to recruit, hire, train and develop a highly qualified and effective workforce. The budget also includes an increase in funding and personnel for the National Targeting Center. Without the user fee increases, proposed budget funding for CBP officers covers only what is needed to fill current 1,250 vacancies.

Overtime: The administration requests a cap of $45,000 on overtime, which was the amount enacted in the FY 2017 omnibus.

Biometric Exit: There is no discretionary funding for the implementation of a biometric exit program at airports contained in the FY 2019 budget request.

This press release was sourced from AAAE on 12-Feb-2018.