City Ordered to Roll Back Airport Landing Fee : Travel: Federal ruling says recent hike for police, fire service must be reduced. Both airlines and L.A. officials claim victory.

A federal official Wednesday ordered the city of Los Angeles to chop its recent hike in airport landing fees by about 30%, or $7 million a year, slicing into Mayor Richard Riordan’s high-profile campaign to increase revenue produced at LAX.

“It is breathtaking in its audacity, and it is breathtaking in the straight-faced manner with which it is propounded and defended,” Administrative Law Judge Burton S. Kolko wrote of the city’s attempt to charge airlines for police and fire services at the airport.

Federal law “prohibits this attempted hijacking of air travelers’ moneys through the tempting target of the air carriers carrying those travelers,” Kolko continued. “While cities with impunity can stick transient travelers with hotel occupancy taxes, they cannot employ that cowardly political device at their airports.”

Issued on the busiest travel day of the year, the harshly worded federal Department of Transportation ruling is the latest salvo in a two-year struggle between the city and the airlines that threatened to shutter the nation’s third-largest airport in 1993 and has challenged Riordan’s reputation as a business-friendly mayor.

On Wednesday, both sides in the highly politicized battle immediately claimed victory, with the airline industry hailing the rollback and city officials celebrating the parts of the fee hike that were upheld.

Kolko set the landing fee at $1.92 per 1,000 pounds, down from the $2.06 the city charged after a 50-cent increase in July. The reduced fee still is nearly four times the 51-cent fee Riordan inherited in 1993 when he took office and launched his campaign to hike the levy.

The fee was upped to $1.56 in 1993. But in a previous ruling, federal officials ordered the city to lower that by 30 cents, a matter that is currently on appeal in federal court.

“In the overall scheme of things, we’ve won. We’ve ensured that the citizens don’t subsidize the airlines,” Airport Commission President Ted Stein said. “We feel gratified and vindicated again.”

But Carol Hallett, president of the Air Transport Assn., said DOT’s ruling “clearly validates the industry’s charges about the financial shenanigans and irregularities taking place at LAX.

“The simple truth is that the policies and practices being carried out at LAX are against the law and are raising the costs for everyone using the airport,” Hallett declared in a statement. “What is going on in Los Angeles is not good for the airlines, the airport or the Southern California economy.”

The controversy is hardly over.

A previous DOT decision that 30 cents of the landing fee is inappropriate is currently on appeal in federal court, and city officials said Wednesday they would appeal parts of the new ruling to Transportation Secretary Federico Pena, who has 30 days to accept or reject Kolko’s findings.

In his 34-page ruling, the judge said the city can charge airlines for soundproofing near the airport and for legal fees associated with the ongoing battle, but cannot make them reimburse the city’s public safety agencies for services only indirectly connected to the airport. He also ruled that the airlines do not have to help the city pay for debt service on its bonds.

The city admitted making arithmetic errors that overcharged the airlines about $1.7 million a year, and Kolko ordered them to further reduce the fees by about $5.5 million. The city had tried to increase the revenue from the landing fees by about $27 million this year, but will now receive about $20 million more than it did last year.

“In dollar terms, this is not a big loss,” said Steve Rosenthal, a private attorney contracted by the city.

Airline industry officials said, however, that the public policy blow is significant. Air Transport Assn. spokesman Chris Chiames noted that Kolko upheld the charges for one-time costs such as soundproofing and attorneys fees, but rejected the attempt to pick up ongoing funds for police and fire departments.

“Los Angeles, the city, and LAX, the airport, are linked symbiotically,” Kolko wrote. “The airport is both a necessary and useful fact of life, and to wish it away is to engage in a reducto ad absurdum that takes us back to Adam and Eve, the serpent and the apple.”

The judge noted that while the influx of travelers at the airport may in fact increase crime, thus leading to extra city expenditures, it also boosts commerce, sending tax dollars to city coffers. The judge said police and fire services are the responsibility of municipal government and noted that other institutions are not billed for public safety services they use.

“The airport may be a handy cash cow,” Kolko said, “but the cow cannot even enter the milking barn until the day the Los Angeles Chamber of Commerce gets a bill for the protection of its members.”

Stein said the ruling sends a bad message to airports nationwide.

“What it says to every airport is, ‘Don’t have enough police and fire services,’ ” Stein argued. “That’s just fundamentally wrong. We don’t understand why the airlines don’t want to pay for it because it’s the public safety of their passengers.”

Chiames retorted that the city is trying to balance its budget and enhance its public safety services on the backs of the airlines and, by extension, travelers.

“Everything [in this dispute] flows from using the airport as an open spigot to get money for the city,” he said. “All these fees and charges that have been heaped on our industry ultimately get borne by our passengers and shippers.”