Will F&E budget cuts affect ATC upgrades?

 - March 16, 2007, 12:35 PM

The Bush Administration alarmed a number of people early last month when it proposed cutting the FAA’s facilities and equipment (F&E) funding by nearly $400 million in its budget request for fiscal year 2005.

Many in the aviation industry thought it a bit odd, considering that just days before the FY 2005 budget was released Transportation Secretary Norman Mineta announced plans for a “next-generation air-transportation system” that would follow the FAA’s current Operational Evolution Plan (OEP) to modernize the ATC system.

Except for F&E, the funding levels for FY 2005 (Oct. 1, 2004, to Sept. 30, 2005) generally mirror those approved in last year’s Vision 100–Century of Aviation and Revitalization Act. The overall budget request as laid out by Mineta calls for total FAA spending of $13.966 billion, up from the $13.873 enacted for FY 2004.

The White House is asking Congress to appropriate $7.849 billion for FAA operations, up from the $7.479 authorized for FY 2004; $117 million for research, engineering and development RE&D, which is down just $2 million from last year; and $3.5 billion for the Airport Improvement Program, an increase from the FY 2004 figure of $3.382 billion.

But it was the F&E account that caused the most consternation. Although $2.893 billion was appropriated for FY 2004, the Bush Administration proposed cutting the figure to $2.5 billion for FY 2005. That is expected to encounter stiff opposition in Congress, as well as in other quarters.

Mineta claimed that the cutback in F&E will not negatively affect the next-generation air-transportation system initiative. “Those are programs that we still envision being completed or started under this budget,” he said. But FAA Administrator Marion Blakey admitted that some previous ATC modernization programs-such as the local-area augmentation system (LAAS), next-generation communications system (nexcom) and controller/pilot data-link communications (CPDLC)–would be deferred.
Blakey said her agency will look at the F&E budget “with an eye to priority, both on broad issues of safety and capacity and, at the same time, putting a priority on those programs that are already under way.”

Opposition to budget cuts materialized almost immediately. Congress began taking issue with the great reduction in F&E spending, along with plans to slash funds for the Essential Air Service (EAS) program. EAS subsidizes regional airline service to small communities that are not served or are underserved by the airlines.

Sen. John Rockefeller (D-W.Va.), the ranking Democrat on the Senate aviation subcommittee, has long complained about poor air service in his state. He sent a letter to the White House that said such budget cuts would irreparably harm the safety of the air-transportation system.

“It appears that this proposed reduction in funding is intended only to mask the size of the budget deficit by building up the size of the [aviation] trust fund, thereby reducing the appearance of a deficit,” Rockefeller wrote. “We must not sacrifice critical aviation safety projects by budget gimmickry.” But opposition also came from within Bush’s own Republican party.

The National Air Traffic Controllers Association (NATCA) said the Administration’s proposed budget further exposes a widening credibility gap. On a day that FAA officials were in Milwaukee touting the installation of the new standard terminal automation replacement system (Stars) at General Mitchell International Airport (MKE), union president John Carr asked, “How is it possible to expect the country’s airports, like [Mitchell], to handle a threefold increase in traffic as proposed by [Mineta] while at the same time the Administration is cutting the FAA’s modernization budget by 16 percent?”

NBAA’s senior vice president of government and public affairs, Pete West, said Mineta told him that cost efficiencies from the new performance-based Air Traffic Organization are expected to compensate for some of the budget cuts.

The National Air Transportation Association expressed “lukewarm optimism” about Bush’s FY 2005 budget package. While the AIP will be fully appropriated under the White House request, NATA said it significantly reduces the F&E and the RE&D accounts. The association stated that these reductions are becoming a trend in the Administration’s annual budget process and reflect the need to control poorly managed FAA contracts that regularly go over budget.

AOPA also expressed concern over the $400 million cut in funding for ATC and related facilities and technology. The cut would have no effect on day-to-day operations, but opens a debate over ATC modernization priorities, it said.