While the tourism industry has spent much of the past seven months hotly debating the pros and cons of a proposed increase to the Passenger Facility Charge (PFC,) a passenger fee levied by America's airports, it looks like a new federal budget proposal is opting to skip raising that fee altogether.
Although the proposed 2019 budget, which was released on February 12, could be a blow to domestic airports under pressure to modernize and upgrade infrastructure, it is not good news for passengers either.
Instead of upping the PFC, the new budget is eyeing increases for Transportation Security Administration (TSA) and Customs and Border Protection (CBP) fees, which could potentially cost consumers up to an additional $3 billion per year.
Specifically, the budget calls for a TSA passenger security fee increase of $1 per one-way trip next year. In 2020, that same fee would increase by an additional $1.65, potentially costing passengers a total of $8.25 per one-way trip by 2020. Estimates suggest the fee will cumulatively cost passengers an extra $2 billion annually.
Also proposed is a hike on fees for international travelers, including upping a CBP customs user fee from $5.65 to $8.40 and an immigration user fee from $7 to $9. Analysts estimate these new fees will ding passengers to the tune of $900 million annually.
Airlines for America (A4A), an industry trade organization representing the leading carriers in the United States is publicly urging Congress to reject all TSA and CBP security fees increases. Instead, says the association, Congress should endeavor to return the billions of dollars that are presently being collected by the TSA and CBP and re-directed to pay for non-aviation related purposes,
"Increasing taxes in any form will add to the cost of flying for millions of Americans, curtail job growth and limit the options small and medium communities currently enjoy," said A4A President and CEO Nicholas E. Calio. "Billions of dollars have already been diverted from aviation security to go towards deficit reduction or other sectors of government. Congress should return this revenue to its intended purpose instead of raising TSA and CBP fees. Passengers already pay 21 percent in taxes on a typical domestic ticket and increasing them can't be justified."
A4A notes that approximately $1.3 billion in TSA fees are already being routed away from their intended purpose-paying for aviation security screening--annually. Additionally, it says that CBP fees were allocated to pay for highway spending in 2015.
Last year, the Senate Appropriations Committee approved a spending bill that included an increase of the Passenger Facility Charge-which helps pay for federally approved infrastructure upgrades. The new fee, which the A4A called "unwarranted," would allow airports to charge passengers up to $34 per trip, up from the current $18. The PFC fee increase, however, did not appear in the proposed budget released on February 12, "a move A4A strongly applauds."
Not everyone opposed the PFC hike, however. The American Association of Airport Executives calls the current $16 fee cap "outdated" and said airports need additional funding to keep up with much-needed infrastructure upgrades.
"For airports, the answer to building infrastructure is as easy as PFCs," said American Association of Airport Executives president Todd Hauptli. "Lifting the outdated federal cap on airport user fees would allow airports to utilize local dollars for investment immediately and to leverage those resources through bonds to further multiply their benefit into the future. If Washington is serious about airport infrastructure investment, it will move quickly to approve the bipartisan proposal on PFCs that is under consideration as part of the FY 2018 budget package."
In 2017, U.S. commercial aviation taxes and fees on airlines and their customers exceeded $24 billion-more than $66 million per day, according to A4A.
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