Consequences and public funding

While reading “Inclined to Liberty” by Louis E. Carabini, it struck me that chapter 29, The Hazard of Equalizing Consequences, describes what one often sees at publicly-funded general aviation airports in my home state of North Carolina.

Taj Mahal-like, LEED-certififed terminals bristling with solar panels at rural airstrips where more coyotes walk the ramp than pilots. Board rooms in those terminals with polished oak tables and deep leather seats that would be considered opulent for most private businesses. Gleaming aircraft refuelers manned by a full staff of line personnel in starched logo shirts who spend more time drinking coffee than servicing the handful of aircraft that happen by on a day with good weather. Whether the funding for all these things comes from the federal Airport Improvement Program (AIP), state or local sources, they all have two things in common — they are paid by the sole provider of public funding, taxpayers, and the consequences for their approval are not born by the people who approved them.

As Carabini points out: “When people are responsible for their own actions, they have a vested interest in making ‘right’ decisions, since they bear the primary cost of their mistakes.”

The problem with public funding is that multiple layers of ‘insulation’ are placed between the people spending tax dollars and the people paying those dollars. Here’s how the process generally works: Pilot/taxpayers make requests to the airport management for new facilities or services. The airport’s owner, typically a town or county, has its own set of priorities, which may or may not correspond to those of pilots, for instance when they are related to economic development. Enter the airport consultant — the firm that specializes in converting wish lists into concrete proposals and carrying out the work when funding is approved. Like any good middle-man, the airport consultant makes his money on the fees assessed for his services, which naturally leads to gilded projects requiring large numbers of billable hours.

Next comes the Kabuki dance — posturing between the airport consultants and the government’s gate-keepers, the people in a state’s division of aviation who dole out the funding. That consultants are very good at this dance can be seen at any given annual conference for a state airport association. The largest sponsors and exhibitors are invariably the consultants. It also comes as no surprise that there exists a revolving door between the bureaucrats who control who-gets-what and the management of leading consulting firms.

As a supplier of turnkey fuel systems to GA airports, I see countless examples of misguided funding that comes as a result of Carabini’s ‘Hazard of Equalizing Consequences’. Here are a few recent cases:

  • Hyde County Airport (7W6) – Installed a small avgas system in a very remote region of eastern North Carolina at the cost of $175,000 (funded by the federal AIP program), more than double the usual cost for a system of this size.
  • Columbus Municipal Airport (KBAK) – Paid an airport consultant $30,000 to study the cost-effectiveness of self-service fueling at this airport, despite the fact that nearly all airports within a 25 mile radius already offered self-service. When the study concluded that it made sense at KBAK, the consultant was awarded another $5,000 to plan a fuel system that is budgeted to cost a half million dollars, five times the amount that would suffice for a very nice combined avgas/Jet-A system.
  • Van Zandt County Regional Airport (76F) – The airport consultant hired by the county created a specification for a fuel system that far exceeds state code and the needs of this small rural airport but also includes some features that are not consistent with best practices in the aviation fueling industry. The result will be a far more expensive system than needed.
  • Halifax-Northampton Regional Airport (KIXA) – Halifax County, NC closed a perfectly good airport (KRZZ) in favor of a completely new, federally-funded airport with an opulent terminal to serve a handful of aircraft based there. The entire project was related to a well-publicized attempt by local economic developers to establish — with massive taxpayer subsidies — a mini-Branson centered around the since-failed Randy Parton Theatre.

Had any of these projects been privately-funded by an individual or group expecting a return on their investment, there would be severe consequences for the vast sums of money that have been wasted. On the contrary, in nearly all cases, taxpayer-funded airports are proud of their accomplishments spending someone else’s money. The airport consultants and construction companies involved are equally pleased.

And who could blame them really, since there are no consequences for irresponsible spending of taxpayer dollars? As Carabini explains, “When the State diminishes the effect of feedback of our mistakes, it also weakens the lessons we will learn from those mistakes.”

Until layers of government and middle-men are removed from the process and those who spend our money are held responsible, public funding of our airports will result in the highest possible costs.  Do you see such waste at your state’s public airports?

To see examples how two private G.A. airports are able to satisfy the needs of their customers without taxpayer funding, look at Gilliam-McConnell (5NC3) in Carthage, NC or Austin Executive (KEDC) in Austin, Texas.

Comments

  1. ManyDecadeGA says

    This kind of waste is rampant in both the current and evolving NAS, and in ADAP. From unneeded towers and FSSs, to sustaining entirely obsolete WAAS, and addition of airspace wasteful LPV procedures (that unnecessarily ruin interaction between critical adjacent airport instrument procedures), when better lower cost and more efficient options like RNP are already available. This gross FAA induced waste doesn’t stop at the fuel pump. It also isn’t going to change until AOPA and NBAA wake up, and change their misguided policies supporting FAA in these kinds of wasteful misguided endeavors, and also stop supporting seriously flawed aspects of NextGen .

  2. larry maynard says

    Yeah, I didn’t realize these folks were dumb enough to hire a consultant to put in a fuel station. Duh! Just visited an opulent new airport FBO in Southern Tenn. which just about has to top them all. Has inlaid oak all over the place. Very large with several conference rooms. Fanciest I’ve ever seen. Small surrounding area. Wow.

  3. John Townsley says

    Kent Misegades is misguided. What he discusses is the EFFECT of excessive, one size fits all regulation. He doesn’t look at the underlying causes or reasons for the bizarre spending. Why was the fuel system at 7W6 $175K to install? Why was the KBAK system $500K? Largely because regulatory requirements set by States and the Federal Government impose very high, standards. Why does the consultant cost $30K? Because procurement regulations imposed by State and Federal laws to ‘prevent’ graft impose other costs to intalling a system… like assurances that the fuel system Misegades can install for pennies on the dollar won’t contaminate ground water… and impose really huge costs on local residents who then have contaminated wells. Then there’s the cost of labor (Private investors can pretty much hire whomever and pay whatever – public contracts are required by law to pay “prevailing wage” – a euphemism for the highest union wage in the largest urban area in the State – often located hundreds of miles away). I’ve been to KBAK. It is not the sleepy airport next to the poor cow town your article asserts.

  4. Raman Gupta says

    It seems things are working exactly as the politicians (and most who elect them) want them to work. With a bevy of useful idiot economists to prod them on, Republicrats are *proud* to sell this waste as “shovel-ready” stimulus with a “multiplier effect” on the economy.

  5. Katie Church says

    Very good article and so relevant. This statement really stands out to me and rings so true: “Had any of these projects been privately-funded by an individual or group expecting a return on their investment, there would be severe consequences for the vast sums of money that have been wasted.”
    Thank you Kent Misegades!

  6. says

    Very good story. It has been interesting watching the hand-wringing over the upcoming sequester. Everybody is worried about how critical services will be at risk. It seems obvious that if critical services are put at risk, they will be put at risk by the decision-makers themselves. It won’t be because the government doesn’t have enough money to spend.

  7. Amlan Gupta says

    Finally, someone who is not caught up in the “taxpayer pays for everything” merry-go-round. So refreshing to see this article – thank you Mr. Misegades.

    • Holt Malcolm says

      The Federal AIP program currently pays 90% of eligible projects. The funds do NOT come from the general fund. They all come from aviation taxes and user fees. Simply put, it you don’t fly or use the aviation system, you don’t pay a dime in federal taxes into the aviation system. Even the FAA employees who administer the funds are funded from aviation taxes and user fees, not any other tax. I can’t speak for all State, but most states fund their portions of projects the same way. Aviation fuel is taxed just like automobile fuel. That tax is only used on an aviation projects. The local source of funds and percentage depend on each airport. In some states, the locality pays 0% of the federally funded project. Please, before you scream about what the taxpayer is paying for, understand where the taxes come from.

Leave a Reply

Your email address will not be published. Required fields are marked *