Congress jets; aviation funds left up in the air
Delta Airlines plans to faze out Saab 340s like this one at Pellston Regional Aiport, July 25, to make its fleet more cost effectient. Replacing the prop-model airplanes would allow Delt to seek federal subsidies to cover future costs for lost profits.
A partial Federal Aviation Administration shutdown in effect since July 22, has placed thousands of workers and hundreds of federally-funded airport projects on hold, while the House and Senate debate subsidies to keep commercial airlines flying into rural airports.
While Republicans fight to reform the subsidies for future cost savings, the FAA shutdown is costing the nation an estimated $30 million per day in suspended airline ticket taxes that could amount to up to a $1 billion by September when the two chambers reconvene.
In addition to tax revenue, some 4,000 construction laborers working on 200 improvement projects have been furloughed across the nation since July -- including 50 employees building a new FAA control tower at Cherry Capital Airport. Another 70,000 workers, according to the FAA, are awaiting work on future projects.
FAA Administrator Randy Babbitt told reporters, in a conference call Tuesday, additional projects could see their funding suspended during the shutdown, because the workers who monitor automatic electronic payments for grants and other funds will be also be furloughed. Babbitt said if the shutdown continues the dollar amount of suspended airport projects could potentially be "in the billions."
Pellston Regional Airport has an ongoing $8 million building project, funded 95 percent by FAA grants. Kelley Atkins, Pellston Regional Airport manager, said Tuesday the aircraft building to house snow removal, fire fighting and airport rescue equipment is going forward. Large portions of the funding grants have already be routed to the state of Michigan, putting the construction ahead of the FAA debate in Congress.
Ray LaHood, U.S. Department of Transportation secretary, called for lawmakers to utilize their "jobs" rhetoric by putting construction workers back on the job during the prime building season.
"Projects are ready to go. Some 70,000 people are ready to work," LaHood said, asking for a temporary extension to the FAA budget.
Such an extension would have been the 21st time the FAA budget of 2007 was pushed forward temporarily, without a long-term budget passed out of both the House and Senate.
However, at the time of the press call, Congress had already left Washington, D.C., for their districts and the Senate remained gridlocked over Essential Air Service subsidies. House Republicans have targeted subsidies cuts in 13 cities in their version of the House legislation, while Democrats have attempted to keep the funding in place. According to the Associated Press, subsidies would be cut in Athens, Ga.; Morgantown, W.Va.; Glendive, Mont.; Alamogordo, N.M.; Ely, Nev.; Jamestown, N.Y.; Bradford, Pa.; Hagerstown, Md.; Jonesboro, Ark.; Johnstown, Pa.; Franklin/Oil City, Pa.; Lancaster, Pa., and Jackson, Tenn.
The EAS program pays subsidies to commercial airlines in rural areas to pay for lost profits in order to ensure service, but many have called for reforms to the program based on large payouts. Subsidies per airline passenger as of June 1, 2010, ranged as high as $5,223 in Ely, Nev., to as low as $9.21 in Thief River Falls, Minn., according to Transportation Department data for the lower 48 states.
"Republicans are playing reckless games with airline safety," Sen. Harry Reid, D-Nev., said in a typed statement. "We should not let ideology interfere with making sure that Americans' air travel runs as smoothly and safely as possible."
Congressman Dan Benishek, R-Crystal Falls, speaking from an airport in Detroit, said to his knowledge there had been no movement by the leadership on the FAA bills in the House. Benishek voted for a version of the FAA bill to end the Essential Air Service program after two years, but has since said he supports the program, which facilitates several airports including several in the Upper Peninsula.
Delta to refund ticket tax
Delta Airlines announced Monday it would be repaying customers the amount of the suspended ticket taxes, after failing to lower its prices initially during the partial FAA shutdown. Several airlines, including Delta, continued to charge the same rate for airfare, despite the taxes being suspended.
Travelers who paid for tickets on or before July 22 for travel on or after July 23 and prior to the reinstatement of FAA funding, may be entitled to a refund of those taxes, according to a statement on Delta Airlines' website.
Among the ticket taxes Delta stopped collecting was a 7.5 percent tax on the base ticket price, a $3.70 segment tax and facilities taxes on international travel and travel to and from Alaska and Hawaii.
Delta voluntarily announced the refund after prodding from the Internal Revenue Service that the amount collected in absence of the suspended taxes, should be repaid, an IRS spokesperson confirmed.
Delta, the first airline to announce the refunds, is currently awaiting the IRS to inform them of the process of how to accurately provide refunds.
Passengers are encouraged to call the airline or visit their website for future details about the refunds.