Budget Ideas Don’t Fly
President Reagan has submitted his 1989 budget proposal to Congress, and it includes a package of tourism- and travel-related recommendations, very few of which are expected to meet with unanimous support.
Example No. 1: The Reagan Administration would like to allocate $1.2 billion in federal grants for airport expansion and safety improvement projects.
Who’s going to argue with the concept of upgrading safety features and air-terminal facilities?
But that $1.2 billion represents a cut from the previous year’s $1.3 billion. And even that higher figure wasn’t enough, some experts claim.
The Airport Operators Assn. said that a minimum of $1.8 billion is needed in fiscal 1988. Operators grumbled when they received only $1.3 billion. You can bet they’ll scream at the prospect of being reduced again.
Money Already Banked
One argument is that travelers have already “banked” the money that is supposed to be used in the federal grants program. It comes primarily from the 8% tax we pay on domestic tickets and the $3 on international departures.
The so-called Aviation Trust Fund stands at more than $5 billion, with another $3 billion-plus to go in during this fiscal year.
The administration has persisted in treating that money as part of the general fund, where it helps mask the depth of our budget deficit.
Congress already has put the President on notice that he’s wrong. It passed a law last year that would cut the air ticket/departure taxes we pay in half in 1990, if spending on airport improvements falls below “acceptable limits” before then.
Reagan has indicated that he intends to ask Congress to repeal that law. Congress is unlikely to grant his wish. Nor is it likely to approve his proposal to cut airport capacity and safety spending this year.
Example No. 2: The Reagan Administration proposes in fiscal 1989 to authorize the Federal Aviation Administration to hire an additional 900 air-traffic controllers.
Safety experts and some airlines have estimated that the need for new controllers to be as high as three times the number the President is suggesting.
Nobody argues that it’s not a step in the right direction. But a lot of people don’t think it’s a big enough step.
Example No. 3: Reagan has eliminated from his budget package all subsidies for Amtrak, the nation’s passenger rail service. Ideally, he’d like to see the train company made private, but whatever happens, he doesn’t want tax money spent to keep it on track.
Congress, however, has consistently overruled presidential and Department of Transportation plans to withdraw subsidies from Amtrak. And chances are it will do so again.
Handful of Departures
Amtrak isn’t as popular in this part of the country as it is elsewhere. We have only a handful of train departures a day. But in the East, and especially the Northeast, train travel is much more important to business and commerce.
That proposal is another one that the President will likely lose.
Example No. 4: Reagan wants to end government subsidies for airline service to smaller communities, although such subsidies are permitted, even required, under terms of the airline deregulation act of 1978.
Expect Congressional reaction to Reagan’s plan to be similar to the Amtrak issue.
Example No. 5: The President’s ’89 budget would cut funding for the U.S. Travel and Tourism Administration, which promotes travel into this country, from $11.7 million to $11 million.
And it goes beyond that. To pay for the tourism agency’s operations overseas from 1990 and beyond, the President suggests imposing another tax on travelers.
This one would be $1 on every international air and cruise ticket bought here, which would raise an estimated $25 million a year to promote our country abroad.
The principal objections to another tax are: (a) there are too many taxes on travelers already, and (b) why should travelers be asked to finance an operation whose efforts, ultimately, benefit everybody in the United States, including those who stay home?
Travel, of course, is only a small part of the President’s budget proposal for 1989.
Nevertheless, the travel portion promises to produce some lively exchanges in Washington in the next few months. What it also promises is plenty of compromises.
