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"Trump Budget Ends Subsidies for Rural Airports, Promising $175Million in Savings"


 
Friday, March 17, 2017

Trump Budget Ends Subsidies for Rural Airports, Promising $175 Million in 
Savings
Cutting those subsidies makes a lot of sense, and could be done without cutting 
rural communities out of the nation's transportation networks.
By Eric Boehm
The Reason Foundation


Every year, taxpayers buy hundreds of tickets on otherwise empty flights from 
places like Ely, Nevada; Lewistown, Montana; and Paducah, Kentucky.

Those vacant seats are bought, at a cost of about $200 million annually, by the 
federal government as a way to subsidize twice-daily service to 175 rural 
airports that airlines may not otherwise choose to serve. President Donald 
Trump's first budget plan, released Thursday, would do away with those 
subsidies by shutting down the federal government's Essential Air Service 
program.

"EAS flights are not full and have high subsidy costs per passenger," the White 
House budget proposal states. "Several EAS-eligible communities are relatively 
close to major airports, and communities that have EAS could be served by other 
existing modes of transportation."

Eliminating the EAS is one part of an overall $2.4 billion budget reduction for 
the Department of Transportation proposed Thursday by the White House. Other 
budget savings would come from reducing subsidies for Amtrak, eliminating some 
local government grant programs, and privatizing the nation's 14,000 air 
traffic controllers.

It's hard to find any proposal in the budget that makes more sense than cutting 
the Essential Air Service program, which is anything but essential.

The EAS program has its roots in the deregulation of the airline industry in 
the late 1970s. Before deregulation, carriers were required to serve smaller, 
rural airports in order to obtain government permission to operate. After 
deregulation, the federal government created the Essential Air Service program 
to subsidize those rural routes so airlines would continue to serve them even 
without being required to do so. It was supposed to be a 10-year program to 
help those regional airports transition into the new deregulated air market.

More than 35 years later, it's still with us, another testament to the 
permanence of temporary government programs.

The Department of Transportation says there are 115 airports in the lower 48 
states (and another 60 in Alaska) receiving subsidies through the program. Any 
airport more than 70 miles from another commercial airport is eligible for 
subsidies, which are capped at $200 per passenger. Airports in the EAS program 
get at least two round trips a day with 30- to 50-seat aircraft-although 
sometimes those planes have as few as nine seats, as Reason has previously 
reported-to nearby hub airports. Without the EAS subsides, the department says, 
those communities "would not receive any scheduled air service."

But those supposedly far-flung places won't be cut off from the rest of the 
world if the EAS program were shuttered. In fact, many of them aren't so 
far-flung at all, and some might find better, more cost effective ways to get 
people where they need to go if the subsidies were killed.

For example, the airport in Hagerstown, Maryland, gets subsidies through the 
EAS program, even though it's less than a 90 minute drive from there to Dulles 
International Airport. Taxpayers pay more than $800 to subsidize each and every 
departure from Jonesboro Regional Airport in northern Arkansas, despite the 
airport being less than 70 miles from Memphis, Tennessee. It would be more cost 
effective to reimburse travelers leaving from Jonesboro or Hagerstown for the 
cost of fuel and mileage to drive to the larger airport.

Those two aren't unique. In all, 38 of the 153 airports subsidized through the 
EAS program are within 150 miles of another, larger airport. A 2011 report 
published by the Reason Foundation (which publishes this blog), the Natural 
Resources Defense Council, the American Bus Association, and Taxpayers for 
Common Sense found that 79,000 one-way flights leave those 38 airports each 
year, carrying 615,000 passengers who pay $70 million in fares. The federal 
government's subsidies for those flights totals nearly $60 million.

Replacing those flights with a bus service to shuttle passengers to larger, 
nearby airports could save $89 million annually, the report found. Yes, buses 
don't travel as fast as planes, but the average trip would be only 45 minutes 
longer on the ground than through the air, the study found.

That's fine for the EAS airports near bigger cities, but what about the rest? A 
2009 report by the Congressional Budget Office suggested that states and local 
governments could pick up the tab for airport subsidies if they were truly 
essential to the local economy. In many places, such service might not be 
needed at all-or the number of flights could be reduced from two per day to 
perhaps a few flights each week, depending on demand. Indeed, some EAS-eligible 
airports operate with fewer than five passengers per day, the Government 
Accountability Office found in 2011.

Trump's budget, like all presidential spending proposals, is more of a 
political document than a fiscal roadmap. Congress gets the final say on 
federal spending, and, if history is any guide, we haven't heard the last from 
the EAS program. President George W. Bush tried three times to reduce or 
eliminate funding for it during the mid-2000s, only to be rebuked each time by 
Congress. Funding for the program actually increased during the Obama 
administration, from about $136 million annually to the current level of $200 
million.

Cutting back on those subsidies-or eliminating them entirely, as Trump 
proposes-makes a lot of sense, and could be done without cutting rural 
communities out of the nation's transportation networks.
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