FY18 Airport Grant Outlays: Mystery Solved

November 2, 2018

Two weeks ago, ETW wrote that the initial year-end fiscal 2018 reporting from the Treasury Department (the Monthly Treasury Statement for September 2018) showed something odd about the Airport Improvement Program. According to the MTS (on page 14), outlays from the Airport and Airway Trust Fund for the airport grant program decreased by over $1 billion in 2018, from 2017’s $3.282 billion down to $2.189 billion in 2018. At the same time, a new line called “Other” from non-AATF sources went from negative $96 million (net) in 2017 to $1.048 billion in 2018.

Under the bipartisan budget deal enacted in February 2018, the House and Senate Appropriations Committees were given so much extra money to spend that the omnibus 2018 appropriations bill added $4.4 billion in supplementary money from the general fund for transportation grant programs that are normally funded out of trust fund contract authority. $1.0 billion of that was for the airport grant program ($2.5 billion was for highways and $834 million for mass transit).  But the law treated the airport money differently than the highway or transit money, at least in a subtle way.

Background: When an authorizing committee of Congress wants to create a new budget account, they have to draft a law that says something to the effect of “There is hereby created, on the books of the Treasury, an account to be known as ______.” But when the Appropriations Committees want to create a new budget account, all they have to do is make an appropriation, and a new account is automatically created bearing the name of whatever header the appropriators chose to put above the paragraph that made the appropriation.

In the FY 2018 omnibus appropriations law, the account names for the highway, transit and airport grants were as follows:

Underlying Trust Fund Account Name General Fund Supplement Account Name
Federal-aid Highways Highway Infrastructure Programs
Transit Formula Grants Transit Infrastructure Grants
Grants-in-aid for Airports Grants-in-aid for Airports

You see the problem. Because the Appropriations Committees gave the new general fund airport grant funding the exact same name as the existing trust fund contract authority airport grant program, the executive branch interpreted this as meaning that Congress intended for the two appropriations to be merged into the existing airport grant account and the account split-funded between the trust fund and the general fund (like mass transit used to be from FY 1999-2005 and like Corps of Engineers harbor maintenance programs are today).

Effectively, the $1 billion general fund appropriation for FY18 airport grants was deposited in the Airport and Airway Trust Fund, making the net spending from the Trust Fund look $1 billion lower.

The result is fungibility, which makes it impossible to tell in the future which airport grants came from the $1 billion in general fund appropriations versus from the underlying $3.35 billion per year in trust fund contract authority.

If depositing the money in the Trust Fund was what the appropriators really intended, then in the final FY 2019 appropriations act, they will keep the general fund supplement with the same account title as the underlying airport grant program (which it is in both the House and Senate versions of the Transportation-HUD bill). If this was not what the appropriators really intended, expect them to change the name of the general fund money slightly in the final bill.

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