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April 24, 2014

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McCarran, Ely airports left hanging when Congress adjourns

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An artist’s illustration shows the new $99 million Federal Aviation Administration air traffic control facility that will be built at McCarran International Airport. The facility is expected to be operational in early 2015.

The government is likely to lose more than $1 billion in airline ticket taxes because lawmakers have left town for a month without resolving a partisan standoff over a bill to end the partial shutdown of the Federal Aviation Administration.

The lack of action means work will continue to be stalled on the new control tower at McCarran International Airport.

And left unresolved is the fate of air service subsidy funding that the airport in Ely receives.

The government has lost more than $200 million since airlines are unable to collect taxes on ticket sales because the FAA's operating authority has expired.

The Senate recessed on Tuesday until September, erasing any possibility for quickly resolving the issue. The House left Monday night.

Caught up in the partisan acrimony are nearly 4,000 FAA employees who have been furloughed. The FAA also has issued stop work orders on more than 200 construction projects, threatening the jobs of thousands of other workers. Air traffic controllers, however, remain on the job.

The debacle could have had an upside for airline passengers because ticket taxes, which typically average about $30 on a $300 round-trip fare, are suspended during the shutdown. But airlines decided to pocket the windfall. Within hours of the shutdown on July 23, most airlines raised their fares by amounts equivalent to the taxes that disappeared.

Transportation Secretary Ray LaHood called airline CEOs to complain and lawmakers have sent letters demanding the fare hikes be reversed and the profits be placed in escrow. But their howls have largely been ignored. Airlines collectively lost about $440 million in the first six months of this year, according to the Air Transport Association.

Some passengers will be due tax refunds if they bought their tickets and paid taxes before the shutdown, but their travel took place during the time airlines no longer had authority to collect the money. Airlines and the Internal Revenue Service are quarreling over who will handle the complicated and expensive process of getting those refunds to passengers.

President Barack Obama implored Congress on Tuesday to settle the dispute before leaving town, calling the stalemate "another Washington-inflicted wound on America."

LaHood, a former GOP congressman, conveyed the same message in a series of private meetings on Capitol Hill and in phone calls to lawmakers, but was unable to clinch a deal.

Sen. Jay Rockefeller, D-W.Va., chairman of the Senate committee that oversees the FAA, held out the possibility that if the Senate were able to pass a bill acceptable to Democrats, it could still be approved by the House using obscure parliamentary procedures, and sent to the White House.

But his House counterpart, Rep. John Mica, R-Fla., ruled out that possibility. The only way left to end the shutdown is for the Senate to agree to a previously passed House bill containing $16.5 million cuts in air service subsidies to 13 rural communities that some Democrats -- particularly Rockefeller -- find objectionable.

"The only one holding this up now is Mr. Rockefeller," Mica said. One of the 13 communities that would lose subsidies is Morgantown, W.Va.

The entire air service subsidy program costs about $200 million a year, roughly the amount the government lost in uncollected ticket taxes in the first week of the shutdown. The program was created after airlines were deregulated in 1978 to ensure continued service on less profitable routes to remote communities. But critics say some communities receiving subsidies are within a reasonable driving distance of a hub airport.

Subsidies per airline passenger range 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.

Senate Majority Leader Harry Reid, D-Nev., said Republicans were trying to force Democrats to accept policy concessions they would be unable to enact through normal legislative procedures. Democrats tried repeatedly over the past two weeks to pass a bill extending the FAA's operating authority without the subsidy cuts, but were blocked by Republican senators each time.

"Republicans are playing reckless games with airline safety," Reid said in a statement. "We should not let ideology interfere with making sure that Americans' air travel runs as smoothly and safely as possible."

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  1. For more detail, check here:

    http://www.aviationweek.com/aw/generic/s...

    The National Mediation Board passed a rule helping airline unions to organize. In order to have a bargaining chip to get rid of this, the Republicans stuck into the FAA reauthorization bill a provision which would harm rural airports generally and close at least three rural ones, one in Reid's home state and one in Jay Rockefeller's home state in particular.

    The GOP chair is explicit about the maneuver: The House added the EAS policy riders as a way to extract concessions on the NMB provisions, according to Rep. John Mica (R-Fla.), the chairman of the House Transportation and Infrastructure Committee, who also spoke at the conference.

    In a nutshell, the Republicans are being directed by Delta to do whatever they have to do to get rid of the provision which "could" (not will) allow airline workers to unionize, so the Republicans put a gun to the heads of a lot of rural airports, most of which are actually in Republican represented districts, one of which is in Ely, and they are threatening to pull the trigger.

    "We had to blow up the village in order to save it, sir."

  2. This just shows us all that Congress isn't interested in the citizens of this country one bit. This is disgraceful!

    TERM LIMITS NOW!

  3. "But airlines decided to pocket the windfall."

    Oh the humanity!

    "Transportation Secretary Ray LaHood called airline CEOs to complain and lawmakers have sent letters demanding the fare hikes be reversed and the profits be placed in escrow. But their howls have largely been ignored."

    That is my favorite paragraph of the week.

  4. I do not think we are getting the straight scoop on this....

    The airline industry should subsidize the airports that they use.

    The taxpayer who does not fly should not have to pay taxes to subsidize this. End of story.

    Why do liberal pigs also try to spend someone else's money.

    The country is broke - we should not be building anything new unless it is for a safety reason.
    Reid lied - and Reid fled Washington to fly home.
    sounds like good service in Nevada.

    End of story.

    Liberals lie.
    Obama has no plan.
    Obama is without clothes.
    Obama happy birthday to you
    and then please us with your resignation.
    You are a failure.

  5. And if anyone says - only airline passengers pay for these services. They lie.

    People paid into social security and Harry Reid is using the money for cowboy poetry.

    Nothing wrong with cowboy poetry - but really.

    Obama spends 4X more than any living or dead president.
    Tell him to stop - the money is ours and not his to spend.

  6. Hey lovestohike,
    If I don't drive why should I subsidize Your highways. If I don't have Children why should I subsidize Your rugrats school. If I dont go to the Library why should I subsidize it. If I have less Gargage than You why should I pay the same. And ON and On it goes for Tea Party Clowns.

    The real problem is JOBS, however Republicans used it only as a Campaign Slogan in 2010 to control the house. Yet they never had a single proposal that would create jobs and returned directly to the failed Bush policies that brought us this economic mess and TARP bailouts.

  7. So some of you folks posting on here actually support "Subsidies per airline passenger range as high as $5,223 in Ely, Nev"?

    Here is a quick economic lesson. If we didn't subsidize stupid programs like this, we (those of us who actually pay taxes) would have a little bit more money that we could freely spend elsewhere and how we like. Our favorite restaurant or movie theater could do a little better maybe.

    It all adds up. Somebody needs to put a foot down and stop this wasteful spending.