State Continues to Dine on Aviation Fund

Guest Editorial by Barclay Dick

Aphorist and poet Stanislaw Lec said, “Cannibals prefer those who have no spines.”  Regarding aviation, the State of Arizona proves the point.

The State’s feasting began in the late 1990s when Governor Symington recognized a need for monies to resolve the State’s Y2K issues.  He looked to the State Aviation Fund for assistance.  Subsequently, the Legislature redirected 50% of the flight property tax revenue from the Aviation Fund to the General Fund.

Because every manager of Arizona’s airports was facing the same Y2K dilemma, there was an understanding of the State’s need to supplement the General Fund and little objection was raised.  It was assumed the Governor and the Legislature, upon resolution of the Y2K issue, would return 100% of the flight property tax revenue to the Aviation Fund.

But, the Legislature, having heard little complaint about the diversion, continued to flow 50% of the flight property tax into the General Fund until the State’s fiscal year 2004.  Had it not been for the Arizona Airport Association’s continued efforts to return the flight property tax revenues to the State Aviation Fund, the Legislature, undoubtedly, would have continued to spend those monies on everything but aviation.

When faced with the current fiscal dilemma, the Governor and the Legislature again turned to the Aviation Fund, as well as other funds.  However, it is unlikely many other funds were as dramatically impacted, at least on a percentage basis, as the Aviation Fund.  According to the Arizona Airports Association, during the last 10 years, the Legislature has used 43% of the Aviation Fund revenue for purposes other than aviation.  Yet, it’s only the Arizona Airports Association that has questioned the action.  Aircraft owners, who pay their aircraft registration fees into the Aviation Fund, appear to have no objection to the use of those monies for non-aviation purposes.  Cities, towns and airport authorities appear to have no concern about the loss of grant monies for their airports.

The State of Arizona has more recently demonstrated a greater disregard for aviation and the aviation community in a number of ways.

The Grand Canyon National Park Airport

This is the only airport the State of Arizona owns and operates.  The State’s annual appropriation for the operation of the airport during the last 10 years or longer has been woefully inadequate.  An informal survey conducted by the Arizona Department of

Transportation’s Aeronautics Division a few years ago indicated that among 50 airports across the nation with between 200,000 less and 200,000 more annual enplaned passengers than GCN, GCN had the smallest operating budget.  The airport with the next lowest budget, a budget that was 250% larger than GCN’s budget, had 200,000 fewer enplaned passengers.  Despite ADOT’s awareness of that fact, and an ample balance in the State Aviation Fund at the time, ADOT would not increase the airport’s operating budget by even as much as 10%.

Toward the end of the State’s fiscal year 2007, the Legislature had not yet approved a budget for fiscal year 2008.  Every department of the State was directed to prepare plans to curtail all but the “essential services” of the State should a budget not be approved before the beginning of fiscal year 2008.  Operation of the Grand Canyon National Park Airport was recognized as an “essential service” of the State of Arizona and no plans were made to shut it down.

The State faced the same dilemma at the end of fiscal year 2008.  Under a new Governor and a new Director of ADOT, operation of the Grand Canyon National Park Airport was not viewed as an “essential service” of the State.  Despite protests from the Aeronautics Division, ADOT directed that preparations be made to curtail the operation of the airport until a fiscal year 2009 budget was approved.  Only at the eleventh hour, with the FAA suggesting it would pursue an injunction to keep the airport open, did the State relent to keeping the airport in service without interruption.  However, responsibility for the operation of the airport was removed from the Aeronautics Division, with a staff including three Accredited Airport Executives and over 100 years of airport management experience.  It was given to ADOT’s Facilities section, which had no experience managing or operating a civil airport.

With the State’s continuing budget debacle in fiscal year 2009, the Governor directed each department of the State to prepare a plan to reduce its budget by as much as 15%.  As part of its plan, ADOT proposed to “downgrade” GCN from a commercial service airport to a general aviation airport and “limit the hours of operations and size of allowable aircraft” at the airport.  In a memo, the Aeronautics Director suggested such arbitrary and unilateral action by ADOT was inadvisable.  Those actions would have reduced the airport’s operating budget by less than $150,000 while exposing the State to liabilities in the tens to even hundreds of millions of dollars.  Additionally, they would have deprived the airport of practically all revenue.  ADOT’s response to that note of caution was the dismissal of the Aeronautics Director and the Deputy Director.

Aviation Safety

The State’s diversion of Aviation Fund monies away from aviation interests has prevented many improvements for the capacities, safety and security of Arizona’s airports.  But, equally or more egregious is ADOT’s apparent disregard for aviation safety.

With its dismissal of the Deputy Director of the Aeronautics Group, ADOT had no representation on the Aviation Safety Advisory Group, (ASAG). When asked to provide another representative to ASAG, ADOT declined, saying, "We're no longer in that business."

What an odd response from an agency with its own airplane used for business, including the transportation of State Transportation Board members, staff, consultants and federal officials.  What an odd response from a state with a Department of Public Safety operating a fleet of aircraft for law enforcement and emergency services and for the transportation of the Governor and her staff.  What an odd response from a state with several members of its Legislature owning aircraft and/or being pilots.

It’s inconceivable that a Highway Safety Advisory Group could exist in Arizona without having an ADOT representative.  Why would ADOT decline to be included on an Aviation Safety Advisory Group?  Has it determined the lives and property of aviators, airplane passengers, airport operators and airport staff are inconsequential compared to those persons and vehicles using surface transportation?

ADOT purports itself to be the State’s “multi-modal transportation” agency.  Is it not including aviation as a transportation mode?  Has it no concern for the safety of that mode of transportation?

Will no one insist that ADOT have a representative on ASAG?

State Aviation Fund

As alluded to above, the State of Arizona continues to use the Aviation Fund as its slush fund, taking from it whatever and whenever it wants for various other uses.

For years, different ADOT Directors, Deputy Directors, Budget Directors, finance staff and other top level officials have asserted that only monies from the State Aviation Fund could be used for the operation of the Aeronautics Division and for grants to the state’s airports.  But, likewise, ADOT could not use Aviation Fund monies for any other ADOT purposes.  Yet, recently, ADOT determined a need for $6.5 million from the State Aviation Fund to fill a department budget shortfall.

Title 28, Chapter 25, Article 1 of the Arizona Revised Statutes discusses the State Aviation Fund.  It says, “The department shall administer monies that are appropriated by the legislature from the state aviation fund.”  Additionally, it defines the State Transportation Board’s responsibilities relative to the fund; “The board shall distribute monies appropriated to the department from the state aviation fund for planning, design, development, acquisition of interests in land, construction and improvement of publicly owned and operated airport facilities in counties and incorporated cities and towns. The board shall distribute these monies according to the needs for these facilities as determined by the board.”

Will no one, other than the Arizona Airports Association, question ADOT’s authority to take monies from the Aviation Fund for the department’s budget shortfall?  If ADOT insists it has the authority to use the Aviation Fund monies as it needs and desires, will no one ask for an opinion about that determination?  Is no one going to query whether or not the Legislature appropriated those funds to ADOT for its internal use?  Is no one going to ask if the matter has appeared on a State Transportation Board agenda for action?

Aeronautics Division/Group

Aeronautics was a legally mandated division within the Arizona Department of Transportation.  Specifically, Title 28, Chapter 2, Article 2, Section 28-332, subsection 3 of the Arizona Revised Statutes states:  “C. In order to carry out the responsibilities enumerated in subsection B, the department is organized into the following divisions:

1. Motor vehicle.

2. Transportation planning.

3. Highways.

4. Aeronautics.

5. Public transit.

6. Administrative services.”

Despite that mandate, in June, 2009, the ADOT Director eliminated the Aeronautics Division and made it a “group” of the Multi-Modal Planning Division.  He further dissected the Division by sending the aircraft registration function to the Motor Vehicle Division, the Grand Canyon Airport to the Facilities section (as previously discussed) and the outreach program to the Communications and Community Partnership section.

It’s too bad that, other than the Arizona Airports Association, no one questioned the Director’s legal authority to make such a change, a marginalization of the former Aeronautics Division and, arguably, a marginalization of aviation in Arizona.

It’s too late now.  During the 2010 legislative session, ADOT had the legislature amend Title 28, Chapter 2, Article 2, Section 28-332, subsection 3 with the following:

“D.  The director may do any of the following:

1.      Establish divisions in addition to those prescribed in subsection C.

2.      Reorganize the department.

3.      Consolidate the department.”

The continued taking of Aviation Fund monies by the State, either for deposit to the General Fund or for ADOT’s internal use; the considered closure and/or downgrading of the Grand Canyon National Park Airport due to budget issues; the choice to ignore the Aviation Safety Advisory Group; and, the elimination of the Aeronautics Division in favor of an Aeronautics Group indicate little regard for the interests of aviation, aircraft owners, pilots and airport operators by the Governor, the Legislature and ADOT.

Only the Arizona Airports Association has inquired about those actions.  Alone, its effectiveness is minimized.  Unless individual airports, airport authorities, cities, towns and counties, other aviation organizations within the state and those businesses that have a concern for aviation join AzAA in its effort to protect aviation interests in Arizona, the State of Arizona’s gluttony will continue until all that remains of the Aeronautics Division/Group, the Grand Canyon National Park Airport and the State Aviation Fund is an impolite burp.  That and aircraft registration fees and flight property taxes, which will flow into the General Fund for use as appropriated by the Legislature.

Mr. Dick has over thirty years of experience in the airport industry and is a former director of the Aeronautics Division of the Arizona Department of Transportation.