Airport Funding Remains Tied Up

May 30, 2008
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GRAND RAPIDS —  The Michigan Senate cleared a capital outlay budget Tuesday that approved the pass along of $162.9 million in federal funds for airport improvement projects but eliminated funding for college and university projects. The bill was sent back to the House for action Wednesday, but the majority of House Democrats continued to push for an expanded capital outlay budget that included higher education projects and sent the legislation back to the Senate once again. The federal funds have to be committed soon in order to meet the federal deadline, or the Fed will distribute the funds to other states. 

Federal dollars for aeronautics are protected by federal law. In Michigan, those federal monies come back to airports through the state. Most other states don’t have a “middle man;” they get their money directly from the Fed, noted Kent County Aeronautics Director James Koslosky.

The Federal Aviation Administration granted the funds for 105 airport improvement projects. Gerald R. Ford International Airport plans to use its $3.6 million share of the funds to pay for a half-million dollar replacement fire truck, land purchase reimbursements and a glycol collection unit.

The Kent County Aeronautics Board accepted the $3.6 million FAA grant Wednesday, a formal step that had to be taken to receive the federal dollars that are currently held in the capital outlay budget. 

The Capital Outlay budget provides for university, community college, museum, zoo and other minor capital projects that the state funds with its general fund dollars. The aeronautics portion of the Capital Outlay budget provides state spending authority only for the Airport Improvement Program, a federal program of capital assistance to eligible state airports. According to Koslosky, some 95 percent of the funds in the state’s Capital Outlay budget are federal funds and the others come from the Michigan Department of Transportation’s aeronautics fund, which is a fund generated through airline ticket taxes, fuel taxes, aircraft registration and licensing fees.

“Legislators have tied up the bill and, as a result, tied up nearly $180 million in mostly federal funds that belong to airports,” Koslosky recently told the Business Journal. “These dollars don’t belong to the state, but because the state has a channeling act requiring that all federal dollars flow through the state process and be accounted for, they can tie up our money like this.”

While the House and Senate continue to go back and forth on the capital outlay budget, time is running short. Since the federal funds are entitlement funds rather than discretionary funds, funding could be delayed until next year, said Airport Spokesman Bruce Schedlbauer said.

“We have purchased the fire vehicle and the glycol unit; they have been ordered and that will proceed regardless of whether we receive this funding this year,” Schedlbauer said. “We would pay for them and be reimbursed at a future point once those funds are released by the state. Of course we would prefer to have the money now rather than later but it will not impact the operation of the airport.”

In related news, Air Canada nonstop service to Toronto is coming to Ford International, with three-times-daily service scheduled to begin July 14. Air Canada will have scheduled daily departures from Ford International at 6:05 a.m., 12:20 a.m. and 6:20 p.m., than they’ll be timed to connect at Toronto Pearson International Airport and to Air Canada’s cross-Canada network, as well as its international flights to major destinations such as London, Frankfurt, Tel Aviv, Hong Kong, Beijing, Shanghai and Tokyo. The new service brings to 16 the number of nonstop destinations available at Ford International.

Schedlbauer said the addition of Air Canada is significant to the airport in that it will allow West Michigan travelers to connect into Air Canada’s international network.

“The greatest benefit is that international feed,” he said.

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